As a New York landlord, the decision on whether to offer a furnished unit or not is solely yours to make. You can offer it in whatever form you feel like–with top-of-the-line furniture, appliances and tools or with nothing but bare walls and floorboards.
That said, keep in mind that the decision you make can have a significant impact on your unit’s desirability. In other words, it can decrease or increase your vacancy rate. And as you probably know, a vacant unit is every Westchester landlord’s worst nightmare.
So, what should you do –furnish or not to furnish? To make the right decision, you have to consider many factors. For instance, will the furnishings make your unit more attractive to prospective tenants? Will you be able to charge more rent because of this?
If you came here looking for those answers and more, you’ve landed at the right place. Here, you’ll learn the pros and cons of furnishing your Westchester rental property.
What is the standard?
Neither option is. The decision to furnish or not to furnish solely lies with the property owner.
In the U.S., most unfurnished units come standard with basic appliances such as a microwave, a refrigerator and range top. Some landlords also provide laundry machines and dishwashers as a bonus. But what of furniture such as tables, dressers, beds, chairs, couches and even linens?
When looking to furnish a rental, you need to factor in a myriad of things. For example, the tax benefits, costs of damages, as well as whether the furnishings will indeed help attract the right caliber of tenants.
What items a furnished property contains mostly depends on two things: the landlord and the location. That said, furnished properties usually include items such as:
- Living room furniture: at the most basic level, expect a couch, a dining table and desks.
- Bedroom furniture: this usually includes furniture such as dressers, nightstands, closet storage and beds.
- Bathroom: obviously, a toilet and a shower are basics. Additional items to expect include shower curtains, sink accessories and bath rugs.
- Kitchen: items to expect include utensils, cookware, bakeware, appliances, dish towels and scrubbing gear. Other appliances include toasters, ovens, microwaves, stoves and coffee makers.
- Electronics & Entertainment: at the very least, expect a telephone and television. Other items that may be provided include stereo equipment, DVD/Gaming system and phone service.
Pros of Renting a Furnished Unit
Pro #1: Furnished properties usually attract high rent.
As a matter of fact, the thought of earning more income is often the #1 reason why landlords furnish their units. Depending on the location, you may be able to charge up to 20% more rent. 10% more rent is, however, more common.
So, with 10% more rent, it means that a unit that earned you $1,000 a month will now be netting you $100 more. And, as we’ve explored, you may even double that should your property be located in a more desirable location.
Pro #2: Furnished properties attract tenants faster.
A furnished unit looks “ready-made.” It looks more desirable to potential tenants, especially those that don’t have furniture of their own. Good examples of such types of tenants include corporate professionals and students.
While these tenants may be looking for short-term rentals, the ROI is usually on the higher side.
Pro #3: You may be able to enjoy tax benefits.
Furniture is a depreciable asset. This means that you can claim back part of the value you incur buying expensive furniture.
Cons of Renting a Furnished Unit
Con #1: There is a risk of property damage.
No matter how thorough your screening process is, there is still that chance of renting to a problem tenant. Although the deposit may help mitigate against that, the relentless replacement could prove stressful for you.
Con #2: Furnished apartments usually attract short-term tenants.
Short-term tenants only look to rent a property for a few months. And as you probably know, high tenant turnover is bad for any rental investment.
Furnished properties attract tenants such as:
- Corporate tenants
- Short-term tenants
- Tenants from overseas
- Unfurnished Properties
Con #3: Costs of furnishing a unit can be inhibitive.
This is a no-brainer. Furnishing a unit is an expensive undertaking, no doubt. According to Apartment Guide, expect to part away with anything between $3,000 and $5,500 per unit.
Unfurnished properties are those that come with the bare basics. While exceptions do exist, they usually include a stove, a refrigerator, an oven and built-in appliances.
Pros of Renting an Unfurnished Unit
Pro #1: You aren’t responsible for a tenant’s belongings.
As a landlord, you aren’t responsible for your tenant’s belongings. A landlord’s insurance only covers structural damage to the building itself. It doesn’t cover any of the tenant’s liabilities.
Pro #2: Tenants have the option to personalize their space.
An unfurnished unit is a blank canvas which gives tenants the opportunity to customize it to fit their tastes and preferences. Remember, a happy tenant is a happy you!
Pro #3: You’ve got fewer maintenance headaches.
Providing an unfurnished unit will give you a certain level of flexibility. For instance, you may require your tenants to pay towards the unit’s cleaning once they vacate it.
Cons of Renting an Unfurnished Unit
Con #1: You may not be able to charge premium rent.
Obviously, an unfurnished unit means less rent. Additionally, you can’t provide your tenants with the guarantee that their furniture will fit the unit.
Generally, unfurnished units attract the following caliber of tenants:
- Long-term tenants
- Established families that already own their furniture
So, which is which – to furnish or not to furnish your New York rental unit? Like most things, it depends! Do your due diligence and base your decision on the needs of your target market.