The Weekend Post - Real Estate
To furnish or not, that is the question
A QUESTION I hear more and more from investors looking to rent their property is “should I rent furnished or unfurnished?”
It’s a simple question, but not always a simple answer, so let’s look at some hypothetical examples.
For some, going down the furnished route might seem a no-brainer – a one-bedroom unit close to the city might cost $5000–$10,000 to furnish to a good standard, right down to the cutlery and linen. In return, you might increase your rent from $350 per week, to $450 per week – or an extra $5000 per year, easily offsetting that outlay within a year, and providing an excellent return on investment.
This kind of property can be ideal as a furnished option as the location and property style is well suited to people looking for an easy move-in-and-unpack option like professionals, FIFO workers, and those new to town. The apartment complexes Cairns One and The Lakes are great examples of this kind of set-up.
Apply the same theory to an area that’s more geared towards longer-term residency and larger families like Gordonvale however, and you might find a less of a demand for a furnished residence as this demographic is more likely to have their own gear and find the option a detriment. There is also of course the significant increase in costs between furnishing a one-bedroom unit, and home with four or more bedrooms.
The northern beaches can straddle the line between the two, with some tenants focused on the lifestyle aspect, particularly at homes closer to the water where premium presentation helps to achieve a premium price.
Resort-style developments can also be a popular choice for a furnished rental.
When furnishing, there are two main things to keep in mind. One – as the property is let with those goods, then it is the landlord’s responsibility to keep them in good order, and replaced if need be. Keep this in mind when budgeting for your inclusions – if that double-door fridge dies on you, then your tenants will be looking for more than a bar fridge to replace it.
Two, if you are going to include personal furniture, try and exclude anything precious. Accidents do happen, and priceless heirlooms that meet toddlers or stray elbows rarely end well.