Expert View: Furnished or Unfurnished?
Furnished or unfurnished? Our Director Neil Shaw gives his professional opinion in our latest Expert View column:
Q: As landlord new to the private rented sector, should I let my property furnished or unfurnished?
A: Opinion is divided about the benefits of furnishing a property or not, but the most important factor is that it has to be right for you as a landlord and the type of tenants you are targeting.
The standard of property you have, its location, your own budget and resources, the local market and target rental income will all come into play.
There are pros and cons to both sides of the argument although buying furniture for a property can be an expensive business, especially for a first-time landlord.
Generally, it is considered that letting a property unfurnished will appeal to older people and families who will either buy new furniture or bring it with them.
These tenants are likely to stay longer as they have made an investment and it could be complicated and costly for them to move; they may also be happier in familiar surroundings.
Furthermore, from the point of view of the landlord or letting agent, you will not have to worry about insuring their belongings or too much ‘wear and tear’. It may also reduce the potential for dispute over deposits.
A furnished property, however, will strongly appeal to certain types of tenant too. As a rule of thumb these tend to be younger people who are more mobile, students and even the corporate market for companies who need good quality lets for employees.
It is important that Portable Appliance Tests (PAT) are carried out to ensure all electrical goods are working properly. Furniture must be fire resistant to legal standards.
From the point of view of the landlord or letting agent, you will still own the furniture for future use and may be able to secure some breaks in your tax liability.
Many landlords and lettings agents believe that there is stronger demand for furnished properties and that they may be able to realise a higher yield although many other elements play a part.
The third way, of course, is to let a property as ‘part-furnished’. The landlord or letting agent can then provide items at their own discretion. For example, providing wardrobes, tables and chairs but not beds. This does give the greatest flexibility for both landlord and tenant.
So, decide what works best for you as a landlord or letting agent. There may be room to negotiate, however it is important to be transparent and ensure everything is logged in any paperwork and agreed to all parties’ satisfaction.
Many of the experienced property professionals in the Portsmouth Property Association (PPA) will be able to help both tenants and landlords.