Is letting a house with a landlord furniture package a good move?
One of the questions we are most often asked is whether it is a good idea to supply landlord furniture. In many cases, the answer would be yes. This is especially the case if you wish to take advantage of the largest growing sector of the PRS: young professionals and young families.
This article will help you decide whether you should provide a landlord furniture package in your buy-to-let property.
What is a furnished rental property?
First, let’s establish what is meant by a property being furnished, by looking at what a landlord furniture package won’t include, before discussing the difference between fully furnished and semi-furnished rental properties.
Items that won’t be included in a furnished property
When considering the items that typically won’t be included in a furnished property, you could sum them up in a single word: personal.
Anything that is personal – whether because of use or sentimental reasons – is rarely included as landlord furniture. This includes things like perishable items, bed linen, tea towels, pictures, glasses, and small electrical goods such as kettles and toasters. Often, you would include items such as crockery and cutlery as being personal items.
What is a fully furnished rental property?
The best way to describe a fully furnished rental property is as being ready to move into, except for personal items. The renter won’t have to buy any items for their new home, except for personal items.
If you could walk into a new home with a suitcase or two, containing personal items and clothes, and live comfortably, the property would be considered fully furnished. That’s one suitcase for things like plates, knives and forks, soaps and detergents, and so on, and one case for clothes.
To be considered as fully furnished, the following rooms might have the following landlord furniture:
· The living room
A sofa, coffee table and lamp, one or two armchairs, a bookshelf, and a television stand
· Bedrooms
A bed, bedside table and lamp, a dressing table/chest of drawers/wardrobe
· Dining room/dining area
Dining table and chairs
· Kitchen
White goods (washing machine and tumble dryer; fridge/freezer; microwave; oven and hob), waste bin
· Bathroom
Wastebasket, shower curtain, bathmat, bathroom cabinet
What is a semi-furnished rental property?
Semi-furnished is a little more difficult to define because it means something different to different people. For example, an applicant tenant may request semi-furnished because they have beds and a dining room table and chairs; what they require are living room and kitchen furniture. Another applicant tenant may have white goods, but no bedroom furniture.
However, the most common description of a semi-furnished property is one which benefits from the big pieces of furniture – a sofa in the living room, a bed in the bedroom, and table and chairs in the dining area, for example.
The advantages of offering a landlord furniture pack to your tenants
An investment in a landlord furniture pack could help to find tenants faster and cut down on the cost of void periods. You should be able to charge higher rent, too, and when furnishing an unfurnished property, you can claim the expense as tax deductible. As the furniture needs replacing, the cost of replacement could be classed as wear and tear. In summary, letting a house or apartment as a furnished property should:
- Enable you to charge a higher rent. Tenants, especially young professionals and young families without a home full of furniture to move into a rental property, will be happy to pay extra for a furnished home. They don’t have the upfront costs of buying furniture, and this could be worth as much as £100 per month or more.
- Allow you to take a higher deposit. You must protect yourself from damage to your furniture. Good tenants are unlikely to cause damage, but accidents do happen. A higher deposit gives you extra peace of mind about the items you furnish the property with.
- Reduce your tax bill. When you buy furniture for an unfurnished property, it is an expense that can be deducted from your rental income when calculating your tax liability. Further down the line, you can claim wear and tear when replacing furniture.
The disadvantages of letting a house as furnished
Though the pros of letting a house as furnished are compelling, before making the decision you should consider these potential disadvantages:
- The potential for damage means more responsibilities for repair and maintenance. Most tenants will look after your property as if it is their own – it is their home, after all. However, if the tenants don’t take care of your property, your furniture could suffer damage. Your responsibilities for repair and maintenance increase when you furnish a property. To protect yourself against such damage repair, consider regular property inspections.
- Turnover of tenants might be higher. Furnished properties are most appealing to the sector of the tenant market who are traditionally more likely to rent for shorter periods: young professionals, young families, single people and students. However, we’re witnessing a change in lifestyles. In particular, young professionals and young families are becoming more likely to rent for longer. The average length of rental is now more than four years.
- You may have to store landlord furniture. If a new tenant doesn’t require all the furniture you provide, you may need to pay for storage.
In summary
The decision to let your property as furnished should always make financial sense. There are some compelling reasons to invest in a landlord furniture pack for your property. You could charge more rent, suffer shorter void periods, and make your property attractive to a growing sector of the rental market.
To discuss whether landlord furniture is a good choice for your property and location, give us a call at +44 0 1522 503 717or send us an email. We’re here to help landlords maximise the potential of their investment property.
Live with Passion,
Brett Alegre-Wood