A question that I hear more and more from investors looking to rent their property is “should I rent furnished or unfurnished?” Simple question, but not always a simple answer, so lets 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 $5,000 - $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 $5K per year, easily off-setting 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 that will be looking for an easy move in and unpack option like professionals, FIFO, and those new to town. Cairns One and The Lakes offer excellent 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 much lesser 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 1 bedroom unit, and a 4 (or more) bedroom home.
The northern beaches can straddle the line between the two, with some tenants focused on the lifestyle aspect and keen to experience the whole package before making a full move, particularly those homes closer to the water where premium presentation helps to achieve a premium price. Resort style developments can also be a popular choice for furnished.
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 big 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 your own personal furniture, try and exclude anything particularly precious. Accidents do happen, and priceless heirlooms that meet toddlers or stray elbows rarely end well.