To let your Rental Property Furnished or Unfurnished

Whether you’ve been providing accommodation for tenants for a while or you’re new to the industry, the type of property your tenants choose to let ultimately comes down to personal preference and circumstance. You may want to leave a blank canvas so your tenants can introduce their own belongings while they’re there, or you might want to include everything needed to make it the perfect home for your tenants, right down to matching the toaster with the kettle.

If you’re still trying to decide, here’s an overview of the pros and cons of both options to help you make your decision.

Defining the terms "unfurnished" or "furnished"

Before you can begin looking at what makes furnished and unfurnished properties work well for landlords, it’s worth defining what each term means. There’s no legal description for these types of property, so the definitions can be open to interpretation.

We’d recommend double checking with your letting agent, if you have one, to make sure what you have in mind matches up with their definition and clearly recorded.   However, we’ve listed what’s generally included in a furnished, unfurnished and part-furnished property so that you have an idea of what is expected of each option.

What can be found in an unfurnished property?

The definition of an unfurnished property is one that includes very minimal fixtures and fittings. Tenants can expect to rent a flat or house that includes bathroom and kitchen fixtures; flooring or carpets and perhaps, properties do often include some white goods and major appliances, such as a fridge/ freezer, oven and washing machine - although this differs from Landlord to Landlord and if in any doubt should be clearly defined in the inventory.

Inventory

Where property includes these, plus a freestanding wardrobe or dining table, for example, it is usually no longer classed as unfurnished, and could be considered part-furnished.

What is the definition of a part-furnished property?

This is the mid-way point for tenants who might have started to buy their own furniture, but still need to rent somewhere that has some of the essentials. As a landlord, you can choose how your part-furnished apartment or house looks, but you will only be adding in things that make the property live-able, rather than homely touches such as coffee tables and lamps.

You can opt to include sofas and beds or just have white goods, a wardrobe, dining table and chairs. You might have a bed in just one of the two rooms and one sofa but no accompanying armchair. As long as you’re striking the balance between including furniture that your tenant needs and allowing them to bring their own items, your property is falling into the part-furnished category.

What’s included in a furnished property?

A furnished property provides a home-from-home experience and is somewhere that tenants can move into without having to go to a furniture shop first.

It’s a step up from part-furnished because it includes a bed in each bedroom; enough sofas to accommodate the number of people living there; and appliances, such as a TV, kettle and microwave. It also includes extra necessary additions such as cutlery and crockery, freestanding lamps, coffee tables, and bookcases.

Unfurnished properties: the pros

Unfurnished Home

There are lots of plus points when it comes to choosing to rent out your property unfurnished. These include:

-      Potentially longer tenancies

You could be more likely to attract tenants who will stay for a while. This is because they will have accumulated their own furniture over the years, so the moving process becomes more involved, costly and time consuming for them, than those who can move out without having to worry about this.

-       Lower maintenance occupants

You’re more likely to attract people who already have their own furniture and want a blank space to fill. Plus, as they are bringing their own furniture with them, your tenants will be responsible for making the empty flat or house a furnished space. This means that you’re giving them the freedom to set out the property as they see fit and you’re not going to get requests for replacement furniture from them.  

-       Less worries about wear and tear

With none of your own furniture in the property, you won’t have to keep track of furniture that might need updating or swapping out before the next lot of tenants move in.

-       No responsibility for breakages

The responsibility for replacements and breakages lies with the tenant. Also, although you could still consider landlord insurance and other types of Landlord cover, you won’t be responsible for insuring your tenants’ furniture and belongings.  

-       Shorter inventory

Unfurnished properties still require inventories, but these are much shorter than those for furnished properties.

 

Unfurnished properties: the cons

While there are plenty of reasons to choose to leave your rental unfurnished, there are some points to consider that may make you think twice about going down this path. The main ones are:

-       Lower rent

You are less likely to achieve the levels of rent that you’d get if you were letting a furnished property. This is because you are renting a space that will be furnished by the tenant, whereas with a furnished property you’re renting out the furniture, appliances and other items, too.

-       Different target audience of potential tenants

By not offering furniture, you’re making your property less attractive to some potential occupants, such as students and young people who may not yet have had the opportunity to buy their own furniture or professional renters who may move regularly for their careers.   However, many tenants don’t want you to furnish the property, they have their own furniture and won’t want to pay extra for a furnished property when it’s not necessary.  If you agree to remove furniture for a tenant who doesn’t want it furnished, you’ve got the hassle and cost of moving and storing furniture each time you are looking for new tenants.

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Furnished property: the pros

If you’re leaning towards furnishing your property, there are lots of reasons to do so:

-       Charge higher rent

As you are providing a property filled with everything your tenants could need, you can ask for more rent than you would if it were unfurnished. This can be especially important if you’re using the rental money to cover the cost of the mortgage.

-       Attract different demographic of tenants

HMO

You are probably targeting your property to a different rental market if it’s furnished. From students and young professionals who may have little or no furniture, to those on placements who may want an easy and quick property to let for a short time such as junior doctors and city professionals, these potential occupants are more likely to snap up your property as you’ve made it easy for them to move straight into.

Furnished properties: the cons

While there could be financial gains and other pros involved in renting out a furnished property, there are some other points to think about:

-       Higher turnover of tenants

While furnished properties are likely to attract tenants, the lack of their own personal possessions makes it easier for them to move on. This could mean it’s more probable that you’ll see a higher turnover of tenants. 

-       The cost of furnishing a property

If you opt for a furnished property, you’ll need to cover the cost of the furniture you add, which can be expensive. Even if you shop for budget or second-hand items, the amount soon adds up.

If you decide to buy low-cost or budget items to begin with, there is a higher possibility that you’ll have to pay out for new items when your tenants move out, too. However, it makes sense to avoid paying out for premium furniture where possible as this could prove costly too.

-       Looking out for wear and tear

You’ll have to keep on top of replacing and updating furniture that’s looking worn or a bit tired. If you’ve had a few tenants in the space of a couple of years, you may find that the sofa is becoming threadbare or the dining table is looking worn, so it’s time to replace these items – and this can be expensive (although likely tax deductible, so don’t forget to save your receipts).

-       Responsibility lies with you for replacing furniture

If items are broken, you will need to fix them or replace them. Your Landlord Insurance may cover the cost, depending on circumstances or you could recommend to your tenants to cover themselves against accidental damage with Tenants Liability Insurance , but you can’t insist upon this.  You may invariably end up footing the bill for damaged furniture or end up becoming involved in a deposit dispute which you may or may not win.  Either way it could cost you more.

 

Other points to consider

As well as the above, there are more things to consider when choosing between renting out a furnished or unfurnished property.

Safety

You’ll need to make sure your property and its contents are fire safe and comply with regulations. If you’re using a letting agent, they’ll usually direct you on how to fulfill these safety standards.

Health & Safety Inspection

Health & Safety inspection

You’ll be advised to carry out a portable appliance test, which is designed to make sure your electrical goods, such as kettles and toasters, are working properly. Your furniture and fittings should also be at the correct levels of fire resistance and have labels that display their fire-safe credentials.

Tax

You may be eligible for council tax exemptions if your property is unoccupied, however the types of exemptions you’re eligible for depend on whether your property is furnished or unfurnished.

If unfurnished, you may receive up to a 100% discount under the Class C exemption, while furnished properties may receive up to a 50% discount on council tax if unoccupied. The stipulations for this and the exemption amount you receive will depend on your council, so it’s worth asking some questions first.

Insurance

Insurance isn’t a legal requirement. However, it helps when things don’t go to plan. Footing the bill for replacing damaged items can become costly, especially if you experience several breakages over a short period of time.   By taking out Landlords Insurance Cover, you can let your property with that added peace of mind if items are accidentally damaged by your tenants,.

Whether you’re leaning towards leaving your property unfurnished or you want to enjoy an increased rental income achieved by letting a furnished property, there is much to consider before you go ahead. Using our guide to weigh up the pros and cons is a great starting point.

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