Should I Rent My House Furnished?

When you're ready to rent out your property, one of the first decisions you'll need to make is whether to rent it furnished or unfurnished. Both options come with unique advantages and potential drawbacks, and the best choice will depend on your property type, location, and long-term goals.

At Compass Property Management, we’ve created this article to help you make an informed decision based on your property’s unique features and your long-term goals.

What Does a Furnished Rental Include?

A furnished rental typically comes with everything a resident needs to move in and live comfortably. While there’s no universal checklist, a standard furnished rental often includes a bed, couch, dining table and chairs, dresser, coffee table, and essential kitchen appliances. In many cases, it also includes smaller items like lamps, cookware, silverware, and linens.

You can also choose to offer a semi-furnished home, which may include only large pieces like a bed, sofa, and dining set. Some owners even offer fully furnished, turn-key homes that include everything down to the coffee machine and cleaning supplies.

Benefits of Renting a Furnished Home

Higher Monthly Rent

Furnished rentals generally command higher rental rates than unfurnished homes. Residents are often willing to pay a premium for the convenience of moving in without purchasing furniture or household items, especially if the property is in a desirable location.

Attract Short-Term Residents

Furnished rentals are particularly appealing to individuals who need housing for a shorter duration. This includes traveling nurses, consultants, digital nomads, or families relocating and waiting to buy a home. By renting your house furnished, you open the door to these niche markets that may be willing to pay more for flexibility and convenience.

Competitive Advantage

In areas where the rental market is flooded with similar listings, offering a furnished unit can help your property stand out. This is especially true if you take the time to thoughtfully furnish your home with stylish and durable pieces that appeal to modern renters.

Downsides of Furnishing a Rental Property

Higher Upfront Costs

Purchasing quality furniture and home essentials can be expensive, and these costs will cut into your initial profits. While the potential for higher rent is attractive, it may take several months or years to break even on your investment in furnishings.

Increased Wear and Tear

Furniture and household items naturally experience wear and tear over time. With different residents using the items, you’ll likely have to repair or replace them more frequently than you would in your own home. Upholstery can get stained, table legs might loosen, and mattresses may sag.

More Frequent Turnovers

Furnished homes often appeal to residents with short-term needs. This can result in more frequent turnovers, which increases the time and cost involved in cleaning, maintenance, marketing, and screening new applicants.

When Furnishing Makes the Most Sense

While a furnished rental isn't right for every situation, it can be a great choice in the following scenarios:

• Your property is in a high-demand, transient area: If your home is located near hospitals, universities, downtown business hubs, or tourist attractions, furnished rentals tend to be more desirable. In these areas, short-term residents are common.
• You’re offering a short-term lease: If you plan to offer month-to-month or three- to six-month leases, furnishing the property may be necessary to attract applicants.
• You live far away or plan to return: Some homeowners rent out a fully furnished house while traveling or working abroad. This is especially useful when you plan to return to the property later and don’t want to sell or store your furniture.

Insurance and Liability Considerations

Renting out a furnished property may require you to adjust your insurance policy. You’ll need landlord insurance that covers not only the structure but also the contents of the home.

Be sure to document all furniture and items included in the lease agreement and take photos or videos of their condition before move-in. You should also have a clear lease agreement that outlines the responsibility for resident-caused damaged or missing items.

Managing a Furnished Rental: How a Property Management Company Can Help

Renting out a furnished property comes with unique challenges, from managing turnovers and maintaining furniture to marketing to the right audience. This is where a professional property management company can make a big difference.

Property managers have the tools and experience to:

• Screen for responsible residents: High turnover rates can lead to more risks. A good property manager will thoroughly vet applicants to ensure your furniture and property are in responsible hands.
• Handle inventory and inspections: Furnished rentals require detailed move-in and move-out documentation to track the condition of every item. A professional team will have systems in place to make this process efficient and accurate.
• Market to the right audience: They know how to advertise your furnished rental to short-term travelers, professionals, or other suitable prospects and price it competitively.
• Coordinate maintenance and repairs: Whether it’s replacing a worn-out sofa or repairing a broken appliance, a property manager can coordinate necessary services promptly to keep your rental in top shape.
• Manage turnovers with ease: Furnished rentals may turn over more frequently, which means more work between leases. A property management company can handle cleaning, repairs, and preparation so your home is ready for the next resident without delay.

Bottom Line

Deciding whether to rent your house furnished is a strategic choice that depends on your goals, location, and target residents. While renting furnished may offer higher income potential and access to niche markets, it also comes with added costs, responsibilities, and risks.

Take the time to evaluate your situation, assess the local market, and weigh the pros and cons carefully. If you choose to move forward with a furnished rental, Compass Property Management can help make the process seamless and stress-free. Contact us today for expert guidance.