New research has indicated that tenants prefer renting furnished properties. Since the majority of properties in the buy to let sector are let unfurnished, landlords could be missing out.
Researchers from a leading property website looked at rental income from similar two-bed properties in nine UK cities. One property was furnished, and the other wasn’t. The data indicated that furnished properties earn up to 21% more each month in rent. It appears that many tenants are willing to pay a premium for a furnished property, especially in cities like London. The downside for landlords is that adding furniture is a costly business.
Essential Furniture for a Rental Property
Researchers estimate that it costs a landlord around £1,800 to furnish a property with essentials, including a sofa, dining table and chairs, bookcase, coffee table, beds, desk, and office chair.
“One way of offsetting this extra outlay and ensuring you can provide furnished homes – which will, in turn, earn you more rent – is to reduce your admin costs by using the best partners or suppliers,” says the CEO of RentalStep, a PropTech platform.
Reducing your admin costs by digitising tenancy agreements and utilising landlord software to streamline essential processes should save you money. You can then spend the money you save on furnishings for your properties.
If you don’t want to splash out on new IKEA furniture, instead look for decent quality second-hand furniture. Most towns and cities have outlets that sell used furniture. You can also pick up used items on eBay and Gumtree, but in the case of sofas and chairs, make sure they are fire rated. The only things you should buy new are the beds. Be prepared to replace mattresses at the end of a tenancy, unless the mattress is spotless.
Attract More Tenants to Your Properties
Furnishing a property need not cost a fortune, yet by doing so you can charge a premium and you will attract more tenants. Many tenants looking for properties at the lower end of the market prefer furnished homes because they can’t afford to buy tables, chairs, and other essentials. The extra rental income you make is the equivalent of another month’s rent. In this challenging climate, every little helps!
Do you let furnished properties? If so, tell us more about your experiences in the comments.