Should I let my rental property furnished or unfurnished?

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.

Before looking at what makes furnished and unfurnished properties work well for landlords, it's worth defining both terms. There's no legal description for these property types, 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 is clearly recorded. 

However, we've listed what you would generally include in a furnished, unfurnished and part-furnished property, so you know what tenants typically expect for each option.

An unfurnished property includes very minimal fixtures and fittings. It may consist of bathroom and kitchen fixtures, flooring or carpets, white goods and major appliances, such as a fridge/ freezer, oven and washing machine. This differs from landlord to landlord, and you should clearly define what is included in the inventory.

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

This is the mid-way point for tenants who might have started to buy furniture but still need to rent somewhere with some essentials. As a landlord, you can choose how your part-furnished apartment or house looks, but you will only add things that make the property liveable 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, a 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 a balance between including furniture your tenant needs and allowing them to bring their own items, your property falls into the part-furnished category.

A furnished property provides a home-from-home experience and is somewhere tenants can move into without visiting 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.

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

You're more likely to attract tenants who stay longer with an unfurnished property. 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 worrying about this. Having longer tenancies means fewer void periods for your property.

You're also more likely to attract people who already have their own furniture and want a blank space to fill. Plus, as they bring their own furniture, 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 won't get requests for replacement furniture from them

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, and you don't need to worry about wear and tear.

The responsibility for replacements and breakages lies with the tenant rather than the landlord. 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.  

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

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

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

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 regularly move for their careers. However, many tenants don't want you to furnish the property as they have their own furniture and won't want to pay extra for a furnished property when it's unnecessary. 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.

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

As you provide 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 mortgage payments.

You're probably targeting your property to a different rental market if it's furnished. Students, young professionals and those on placements who want a quick and easy property to let for a short time are more likely to snap up your property as you've made it easy for them to move in straight away.

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

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

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

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

Wear and tear is a landlord's responsibility in furnished properties. 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).

If items break, you will need to fix them or replace them. If you have Landlord Insurance, this may cover the cost, depending on circumstances, or you could recommend to your tenants to protect 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 become involved in a deposit dispute that you may or may not win. Either way, it could cost you more.

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

You'll need to ensure 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 fulfil these safety standards.

You must also carry out portable appliance tests (PAT) designed to ensure your electrical goods, such as kettles and toasters, are working correctly. Your furniture and fittings should also be at the correct levels of fire resistance and have labels that display their fire-safe credentials.

You may be eligible for council tax exemptions if your property is unoccupied. However, the types of exemptions you're eligible for will 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 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. By taking out Landlords Insurance Cover, you can let your property with that added peace of mind if your tenants accidentally damage items.

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.