Furnished, Unfurnished Or Part Furnished?

Having decided that you are purchasing an investment property to rent out you then need to make a decision whether to let it out either furnished, un-furnished or part furnished. Yes, financial considerations are a consideration but let’s have a look at some of the other things that you need to bear in mind as well.

The fist thing to say is that the decision is solely that of you - the landlord. You can let it out with absolutely nothing in it, full of top quality furnishings or just partly furnished with everything except the beds in it as many people actually prefer to bring their own beds.

Whilst furnishing the property does involve an initial outlay you may be interested to note that there are a number of companies that specialise in providing furniture packages. These furniture packs come in various price ranges so if you were catering to the executive rental market you can purchase a top quality furniture pack that will help you achieve the premium rental you would expect. If you were intending to rent the property out to students there are suitable furniture packs for that sector of the market. 

Let’s look at some of the benefits of renting out your property fully furnished: -  

·         As more people require furnished properties you are more likely to let the property quicker.
·         You can charge more in rent.
·         Should the tenants leave you can use the furniture for the next tenants who take up occupancy.
·         Some of the purchase price of the furniture is tax deductible.

Now let’s look at some of the benefits of letting out your property unfurnished: -

·         You do not need to insure their furnishings
·         A tenant who has bought their own furniture is more likely to stay for a longer period as it is more inconvenient to move every 6 or 12 months.
·         You are not bothered about the wear and tear of the furnishings.
Finally, let’s look at the benefit of letting out your property on a part furnished basis: -
·         The tenant has greater flexibility if you are agreeable to them bringing some of their own furniture so anything of yours that you don’t use can be stored to be used for another tenant who may prefer a fully furnished property.

As a rough rule of thumb you are more likely to let a larger property unfurnished as tenants tend to be families who have built up a supply of furniture over the years. A one bedroom flat is more likely to be let furnished to younger people who don’t have furniture or the funds to buy any and are more mobile.

Whilst you are under no legal obligation to insure your contents in a furnished property it would be a prudent thing to do in the event of any mishaps.

It is worth remembering that if you are to furnish the property the furniture must meet the fire resistant standards. In that respect, you can be assured that by using a reputable company who provide furniture packages that all the items that need to in the furniture pack will comply with the necessary regulations.

Whether your property is furnished or unfurnished, you should speak with your local council about council tax exemptions should your property be unoccupied.

With regard to income tax you should be aware that there is an allowance that can be claimed for “wear and tear” when a property is furnished or, alternatively, a renewals allowance. These are obviously not available when the property is let unfurnished.

Of course, you need to take into account which option is more financially viable taking the above factors into account, the cost of buying a furniture pack, the increased rental you could expect to achieve on a furnished property. In this respect you really should seek the guidance of a professional letting agent.