If you've recently bought a property in which you're going to spruce up before you rent it out, you'll have to make the decision on whether or not you want to rent your property as furnished or unfurnished.
The difference between the two is somewhat obvious, with unfurnished properties always collecting less rental income than a furnished equivalent (everything else being equal). That said, many people looking to enter into the rental game aren't aware of how much of a difference this can make to your rental income each month, especially when you make the effort to furnish your property in a style that will attract a very specific type of tenant.
The debate is ongoing on whether, as a general rule, you should furnish your properties for tenants ahead of time. With that said, this is a purely personal choice dependant upon what types of tenants you want to attract, under what lease length, and a myriad of other questions. To help sway your mind in the direction of furnishing your new property, below are three considerations you must think about when using furniture to help boost the value of your retail space.
Choose Your Interior Style
This is the toughest choice you're going to face when deciding to furnish your rental space, as (as a general rule) unless you decide to create a bland, uninteresting style that will potentially appeal to everybody (but is more likely to appeal to nobody) you're going to want to push yourself to go in one direction – focus on one specific style – in order to attract a very specific type of tenant who will be willing to pay over the odds just to live inside your creation.
This is no easy task, but it can certainly done. If you decide you want to work with a French interior style, for example, look online for a French furniture provider who can deliver a large selection of French-style furnishings to your door as and when you need them, so you're able to piece your design together on a schedule that works for you. It may take a few weeks, but once you choose your interior style your job becomes a whole lot easier.
Get Your Furniture Insured
One thing you should certainly take note of is insuring all of the items of furniture inside the home of your rental tenants.
It's a clear and simple fact that however respectable and polite your tenants may be, when people are living within a rental property, sitting on items of furniture which they haven't personally paid for, they are going to take much less care of these items than they would do if they had gone out and personally chosen and paid for them. For this reason, getting your furniture insured against accidental damage is a sensible precaution you must take by default, as to not do so could cost you a significant amount of money in the long term, as your individual tenants are certainly not going to own up to, and pay for, the damage caused.
Look Into a Taxable Reduction on Your Furniture Items
Few people know about this reduction in their yearly income taxes, but if you rent out a furnished property to tenants, depending on the country in which you live, there's a good chance that you'll be able to receive a reduction in the taxes you'll have to pay based on the wear and tear of the items of furniture within the property.
In the United Kingdom, for instance, if you rent out a furnished property to tenants, each year you will receive a wear and tear allowance of ten percent of the net rent to cover the depreciation of the items within your property. This ten percent you are then legally allowed to take from your net rental income for the year, therefore reducing the tax you pay on the income you receive from renting out your furnished property.
In conclusion, if you've recently bought a property in which you're going to spruce up before you rent it out, you'll have to make the decision on whether or not you want to rent your property as furnished or unfurnished.