If you are an apartment investor, choosing the furnished or unfurnished apartment route is a very important decision. You must select what will maximize your income and protect your total investment in your building. This is not an easy choice and I have made the booth, so I am going to give you my idea of the pros and cons of furnished and unfurnished rentals.
Of course, the easy and simple thing you can do when you invest in an apartment building is to rent the units unfurnished. For most, this is a good income with no worries about furniture or wear and tear on the items you bought. Some tenants like to settle into rentals for years and all they have to do is perform the occasional maintenance, fix minor plumbing problems, broken windows, and the like. Some tenants prefer shorter rental periods, which means you have to renovate the apartment with paint and other maintenance to keep the units looking fresh for the next tenant.
In general, there are far fewer things to think about when renting unfurnished apartments compared to furnished ones; the lease term and maintenance are the main considerations. The location of the property, the style, and the upkeep of your building will determine the type of tenants you attract, so this is an important consideration in determining whether you should rent furnished or unfurnished apartments.
With a short-term tenant, a month-to-month lease on a furnished apartment is usually very attractive. For example, people in the military are often stationed for short periods and do not like having to transport furniture from one duty station to another. Also consider traveling businessmen and traveling nurses working on short-term assignments. These are the perfect tenants for furnished apartments, and these large tenants cause minimal damage because their companies often rent the apartments to them so they have more inventiveness to be tenant-friendly.
Some municipalities allow you to divide the apartments into separate rooms to create shared units. Apartments with shared common areas have great profit potential. A furnished room is very convenient for tenants who want to travel light or who want to maximize their income by sharing expenses with others. Since many people travel on assignment and have other homes, they are primarily concerned with working and having a safe place to sleep at night. We don’t want to assume that all short-term renters looking for a furnished apartment are the homeless type.
Tenants who rent a furnished apartment are generally willing to pay a little more for apartments, first because they are getting more. Second, most will already have a full set of furniture elsewhere, and you just don’t want to have to move or store your items. Since they are using their furniture, they are accepting responsibility for taking care of it and paying a security deposit to cover the damage. In general, you, as a landlord, have a higher class of tenant.
The decision to rent furnished or unfurnished apartments has a big impact on the type of tenants it can attract. If you prefer to attract higher priced tenants looking for short term leases than furnished rentals, this is the way to go. If you prefer long-term tenants who like to nest for a year or more than an empty, clean and well-maintained apartment, you are the right choice. In the end, the decision should be based on what is the most profitable situation for you, the investor.