Furnished or unfurnished . . . that is the question! 1st Jun 2016
One of the most frequent questions The Key Place gets from landlords is whether to let their property furnished or unfurnished. The Key Place gathers statistics on this sort of information every month and it is interesting to note the following for the month of May 2016:
Edinburgh & the Lothian’s:
25% of advertised properties are being let furnished
65% of advertised properties are being let unfurnished
8% of advertised properties are being let part furnished
2% of advertised properties are being let either furnished or unfurnished
Central Scotland & West Lothian:
30% of advertised properties are being let furnished
42% of advertised properties are being let unfurnished
21% of advertised properties are being let part furnished
1% of advertised properties are being let either furnished or unfurnished
6% not specified
A recent twitter poll by Belvoir found that 64% of tenants would prefer an unfurnished property, and 14% would prefer furnished.
It is essential that you consider the pros and cons of your target market in making your decision. For example students will almost inevitably require a furnished property, as will first time renters, whereas a property suited to a family would more likely be an unfurnished let if they have gathered their own furniture etc over time.
• Opens the property up to a wider audience of tenants who require a furnished let, such as first time tenants, students and company lets.
• Currently you can offset a wear and tear tax allowance of 10% against rental income although this is changing in 2017.
• If you want to move back in to the property at some point then you still have your furniture. Plus it saves on costs of putting furniture into storage.
• Furniture must meet fire and safety standards – any that does not must be replaced.
• Potential damage to furniture, along with general wear and tear (the law of betterment will not allow the full cost of a replacement).
• May end up in a deposit dispute if a full and comprehensive inventory is not produced at the start of the tenancy.
• Landlords need to insure their own furnishings.
• If a potential tenant really likes the property but has their own furniture, they may not take it if they face the cost of putting their own furniture into storage.
• Your taste in furnishings may not be somebody else’s. If furniture is dated you may need to go to the expense of buying a modern alternative. These days tenants want good quality furnishings.
• The above statistics show there is a wider audience overall for unfurnished properties.
• In today’s increasing rental society, tenants are starting to invest in their own furniture which they want to take with them to make the property feel more like their own home. Tenants may stay for longer if they feel at home, plus the upheaval costs of relocating are greater.
• Landlords are exempt from paying council tax in Scotland on vacant, unfurnished properties for 6 months.
• Tenants are responsible for the insurance of their own furniture.
• Costs are less as there is no issue of replacing items if they get damaged or broken.
• You miss out on an audience of tenants requiring a furnished let.
• Properties can look bare and less attractive for viewers.
• If your current tenants are moving out, their taste in furnishings could put off prospective tenants viewing during the notice period.
Part furnished may also be an attractive option as you are putting in minimal furniture which looks less cluttered, as well as allowing the tenant to bring their own pieces with them.
Clearly in weighing up the argument, flexibility is key. If you can advertise your property as either furnished or unfurnished then you have a much wider audience who may be interested in becoming your tenant. However individual circumstances will dictate what is best for you, and a decision must be based on what type of property you are renting and to whom.
The Key Place offer landlord insurance to all of our fully managed landlords. Please contact us now if you would like any further information.