Furnished Properties

Should you rent your property out furnished or unfurnished?

The below information is related to long-term residential properties. Long-term leases are usually classified as longer than 3 months however the norm for long-term residential tenancies in Australia is 12 months (and then renewed if everyone is happy).

Disadvantages

You may significantly reduce your market when looking for new renters because most renters have their own furniture. This could result in your property sitting vacant for weeks (and maybe even months!).
You will have to replace the furniture if it breaks (or wears out). For example, if the fridge dies you'll need to repair or replace it. You can write a special condition into the lease that you will not be replacing [insert specific furniture] but the renter may still argue that it was "part of the lease" and request you replace or repair it. Either way, it can be annoying to deal with.
It's extra work/cost to manage. All furniture and its condition need to be clearly documented in the condition report at the start of the tenancy. Then when renters move out, the furniture should also be carefully reviewed before finalising the bond refund.
You typically don't get the return on investment once you factor in the risk of extra time on the market (lost rent sitting vacant) and the cost to repair/replace the furniture. Ultimately this is because renters who are willing to pay extra for furnished properties are few and far between.

Advantages

There is a small portion of the renters out there who are willing to pay a premium for furnished properties because it saves them from buying their own furniture and reduces their moving costs. This portion can fluctuate and the location of the property can also have a big effect on the size of the market (renters willing to pay a premium for furnished properties).
If you already have furniture at the property and it's a cost or burden to remove it, it may be a good choice to rent the property out furnished, particularly if you're only intending to rent the property for a shorter period, say 12 months or less.

Who might pay a premium for a furnished property?

A company looking to rent a property for their contractor or employees in a short-term position.
People who are looking to rent for a shorter period of time (under 6 months usually). For example, people who are building their own home, are recently divorced or are new to the area.

Both of these are typically very small markets depending on the area. See point one under disadvantages.

Your options

Rent it furnished: Advertise your property as 'Furnished' with a premium furnished rent amount.
Keep your options open: A less risky approach is to advertise the property as 'Furnished' but list the rent amount based on the property being unfurnished AND add the following content into the first line of the property description or even better, make it the headline: 'OPTION TO LEASE FURNISHED AT $XX EXTRA PER WEEK". Therefore if people filter their search by furnished properties your ad will still appear in the search results but most importantly for the majority of renters that don't search for furnished properties, your rent amount will still be competitive (and show up in their search filters).

If you want to rent the property furnished, we always recommend putting a brief list of the furniture in your property advertisement. E.g. Kitchen utensils, microwave, fridge, 2 couches, 2 queen beds, 1 single bed, linen, cleaning equipment, 2 TV's, cupboards and drawers. With the full list provided upon request or at the inspection. Ultimately you want to make it super clear exactly what is included before they apply for your property so you can wait until the inspection (or their enquiry) to provide full details of the items included in the lease.

Still not sure?

Sometimes it's hard to know if renters are out there who are willing to pay a premium rent price for a furnished property (or if they're out there at all) until you advertise the property and find out. A good approach can be to review the enquiry rate after a week and reassess your options. You can always change the advertisement anytime. Feel free to email your specific scenario to hello@cubbi.com.au and we can personally advise and review your listing.