To furnish or not to furnish – what do landlords need to know?
published on 10/03/2020
It’s likely to be one of your biggest choices as a landlord and could make all the difference in attracting tenants, generating good rental income and achieving decent yields.
The dilemma is – should you furnish your rental property, or should you leave it unfurnished, allowing your tenants to provide their own furniture and put their own stamp on the home?
There are advantages and disadvantages to both approaches, but here – using our experience of operating in the South London lettings market - we offer some guidance on this eternal question.
What are the pros and cons of each approach?
As you’d expect, letting an unfurnished property will typically be significantly cheaper and simpler as you don’t need to concern yourself with splashing out money on items such as beds, sofas, wardrobes and coffee/dining tables.
With the rise in long-term renting, in part caused by sky-high house prices and the difficultly in cobbling together a deposit, and in part because of lifestyle choices, it’s not surprising that many tenants would prefer to choose their own furniture rather than relying on their landlord’s idea of a chic wardrobe or a comfortable settee.
Tenants renting empty properties generally stay put for longer as they are able to put their own personal stamp on the house or flat they’re living in. They make their property feel more homely by surrounding themselves with their own possessions. Equally, tenants who bring or buy their own furniture are probably more likely to be long-term renters as moving home with these items in tow can be complex, expensive and time-consuming.
When it comes to unfurnished properties, landlords have the advantage of not having to worry so much about wear and tear, and you also have no obligation to insure the furniture that your tenants bring into the home.
On the other hand, some tenants will require certain basic items – beds, sofas, wardrobes, coffee and bedside tables, bookcases, etc – and you could be limiting your chances of finding someone suitable by not providing these.
Financially speaking, there is typically an economic benefit to letting a home furnished, with these types of properties normally demanding higher rents than those that are unfurnished. As a result, decking your property out could bring great rewards in the long-term via strong yields.
Demand is generally higher for furnished properties, but this can vary depending on your location, while you also have the advantage of being able use the same furniture from tenancy to tenancy (as long as it’s in a decent condition), which will save you money over time.
While the Wear and Tear Allowance is no longer, replaced by the Replacement Relief from April 6 2016, landlords can still claim tax relief for replacing items in their rental properties. The Replacement Relief, which superseded the scrapped 10% Wear and Tear Allowance, applies to all rented properties, regardless of whether they are furnished or not.
The relief means you can claim ‘the cost of the replacement capped at the cost of a modern equivalent if the new item improves the old one’. This also covers replacing old technology with cheaper, new technology. You can also claim the costs of disposing of the old item and transporting and installing the replacement, but you must subtract any amount received in cash or in kind on disposal of the old item.
Whether you choose to furnish or not will depend largely on the type of tenant you are trying to attract, and the area of the rental sector you are operating in. This is not foolproof, but generally speaking families and older tenants will be seeking unfurnished houses and flats.
They are more likely to stay put for longer and are also likely to have more disposable income to spend on furniture and make their rental property feel like a home.
Students and house sharers, on the other hand, are more likely to want a fully furnished rental property. They will have shorter-term renting habits and will generally be less house-proud. They might also not have the means to buy much furniture in the first place, or transport/store it if they ever move tenancy.
If you decide to let your home through a nearby college or university, targeting the rapidly growing and often lucrative student market, it’s important to note that these institutions will insist that you provide desks in every bedroom.
It’s also key to be clear on your safety obligations as a landlord, with any soft furnishings you provide - whether that be mattresses, sofas, rugs or duvet covers – needing to comply with the latest fire regulations. Fire retardant labels should be attached to these items, unless they were manufactured before 1950.
Lastly, you should bear in mind that most tenants would expect their rental accommodation to have some items in place, even if the home is unfurnished. Most would expect the home to include ‘white goods’ – for example fridges, washing machines and ovens – even though there is no legal requirement for landlords to provide these.
You shouldn’t feel obliged to provide ‘luxury’ items such as dishwashers, microwaves and tumble dryers unless the property you are looking to let is at the higher end of the market.
For more information about getting your home let successfully in South London rental hotspots such as Brockley and Hither Green, you can contact Bryan & Keegan at one of our three offices.
To find out the value of your home and how much you could be charging in rent, you can request a free instant online valuation.