Rent furnished or not?

[Yann]

Hi there. I just purchased a renovated one bedroom unit very close to USYD (270A Bridge Road, Forest Lodge). It looks nice, is about 45 square meters with balcony and car park, north facing, top floor, quiet and looking over trees.
My question is given the situation and potential tenants, would you recommend to go furnished or not? What kind of price range can I expect for both option? It's my first IP and would really appreciate feedback if you own a property nearby. Cheers

 

[travelbug]

It varies greatly according to area.

What do local real estate agents say? They will know what the demand for furnished VS unfurnished is and the price difference.

 

[jenni_nextplace]

It does vary a lot but a furnished property is a right pain and can costly, unless it is a holiday rental.

Ask yourself if you currently worry about the costs of a managing a non furnished property imagine all the extra potential dramas you will have with a furnished one...

Many years ago I used to manage fully furnished rental properties. End of tenancy was always a drama, so much stuff gets broken, lounges and beds got stained and damaged, people would swing back on outdoor furniture chairs and break the legs. Cutlery and appliances were stolen, the list goes on.

On top of that if they did a runner and owed rent there was never enough money to cover expenses and clean up of furniture etc.

Due to my past experiences, I would never own an IP as a fully furnished permanent rental.

 

[geoffw]

I've had furnished for the same size unit (a block of 9 of the actually), and that worked well for me. But it has to suit the area and the demographic of the potential renter.

I furnished cheaply, and as such, the small number of breakages were covered by the extra rent.

It suited Queanbeyan as a dormitory town for Canberra- there were a lot of people in town for work who just stayed Monday-Friday. There were also a few people who were newly divorced, or new in town just needing some time to find something permanent.

The bond from memory was allowed to be for a slightly longer period- perhaps six weeks instead of four for an unfurnished.

This was six years ago- it cost me about $2K for a package deal, plus TV & stereo. I didn't include kitchen things or bedding.

I notice ads now for the property- long since sold- which state that furniture is available at no extra cost- so the premium is no longer there. It may be original furniture.

Check with a couple of local agents.

 

[Yann]

Thanks guys, makes a lot of sense. I will check the final settlement date and will start asking agents, but it confirms my opinion that unfurnished seems less of a hassle.

 

[Peterw]

How times have changed. When I opened my first business im the 1980's I recall 75% of our rental properties were furnished. No self contained ie with cockery etc. Inspections took an eternity, with a long inventory to go through, and you had to look at everything, from every angle looking for damage. I am pleased things have changed.

 

[travelbug]

I have a fully furnished unit. It used to be a unit in a boutique hotel so had everything. Furniture, tea towels, cutlery etc. We bought it with a tenant n place and were worried about things breaking etc. But in 5 years we've replaced the hot plates and fixed a leaking tap. No complaints. So it's not always bad.
If the tenant moved out though I'd probably take everything out as its getting old.

 

[Damien Cox]

Renting furnished can be a pain but might be beneficial in the right area. I'm not familiar with your area but ask a couple of PM's what the demand is for furnished apartments in that area. You'll also need to decide on the following:

• Do you exclude prospective tenants that want unfurnished?
• If not, do you have somewhere to store the furniture if a tenant has their own?
• Are you prepared to drop the rent if a tenant wants to take it unfurnished?

If you decide to go furnished, ensure that a proper furniture inventory gets done with lots of photos so that you are covered at the end of the tenancy.

 

[Brett R]

Bear in mind you will generally get more turn over of tenants with furnished properties.

 

[geoffw]

Bear in mind you will generally get more turn over of tenants with furnished properties.

My furnished units did have a higher turnover, but the extra rent more than made up for it. The vacancies were quite short, but a renewal meant more PM costs.

You may well be attracting more unstable tenants as well.

 

[esh]

I think furnished qould really suit that area and you can get a much higher return. You dont need to provide cutlery and those tiny things- just the basic should do like bed, dining table, fridge and tv.

 

[kathryn d]

We have a property that has 11 furnished bachelor apts.It started in 2007 and in that time we have replaced one boxspring & mattress, loveseat, a couple of microwaves, and a TV.
We bought extra sets of dishes and pot sets to replenish broken/stolen items.

When tenants move in they are given an inventory list, and it is up to them, to check if everything is there. (we check the larger items, but we don't count dishes/cutlery)

Over the years, tenants leave behind the 'extras' they have purchased, for the next tenant to enjoy.


If you decide to furnish, buy basic stuff.
We also never allow them the option of unfurnished. If they want to bring their own "whatever" that is fine, but our stuff stays.

 

[skater]

Being close to the Uni, there would be a lot of prospective tenants that don't have furniture. Go talk to the local agents and get a feel of what is possible.

 

[SeafordSunshine]

Suggest you speak to the Student accom at Sydney Uni

I suggest you speak to the people at the Student union, they have a great accommodation service, and they will have their fingers on the pulse as to what people want.

http://sydney.edu.au/current_students/accommodation/advertise/index.shtml


Do speak to them first, I think people will love being at Forest LOdge and pay extra to be so close!

I hope this helps

 

[depreciator]

Yann, I just had some people move out of my Marrickville Airbnb property. They had been there for two months but needed another three months block and I'm booked up. They looked everywhere over the space of a month for a small furnished flat. Finally they found a decent one in Alice Street, Newtown. It's a studio. I helped them take their stuff there in the car so I saw inside - 70s block with a reno, new bathroom, tiny kitchen, and one room with a bed and TV and a couple of chairs at a small table. I'm guessing it was perhaps 35sqm. The rent per week was $470pw.

 

[Yann]

Thanks for answers. I finally rented unfurnished for $430 (average of what PM told me I could get), but will see at the end if my current tenant wished to leave his furniture, I might try the (minimalist) furnished option if the students union tell me it is high demand

 

[depreciator]

On the strength of my success renting out my other place, I bought a flat in Marrickville in October last year and furnished it. I have people in there who are two months into a three month stay and paying $500pw (including PM fees). There is nobody lined up after them, though.

This is the link to the place:

https://www.airbnb.com.au/rooms/1802870