A question I often get asked in property management is “can I get more rent if I add furniture”
The answer is not a simple yes or no and the wrong property furnished can mean that you minimise your market instead of attracting more rent.
Tenants will ask you to remove the furniture and an increased rent due to the furniture can be detrimental and will price the property out of the market.
However, there are cases where furniture can work very well and can certainly achieve a higher rental value.
Inner city apartments, beach locations, executive style homes in prestige suburbs, ie Adelaide Eastern suburbs, can work well furnished.
The increased rental amount does not come from the furniture, it comes from attracting a corporate high end market that will pay that premium price and that does not always come from just putting a property on realestate.com.au and hoping for the best. This part of property management borders on commercial leasing and requires some active work – approaching people, private databases etc to get it working.
The type of furniture and overall presentation of the house is absolutely important. Our biggest successes have been properties that have been styled correctly with suitable furniture – they have to look amazing or it will not work.
Furniture does not need to be expensive but it needs to be styled and suit the property and definitely no older than 5 years old – corporate tenants will not go for tired, worn out furniture.
Budget:
A case study may help here.
we took Norwood executive style townhouse – beautiful property in the right location and took the rent from $700 per week to $995 per week by targeting a corporate market and adding correct furniture.
Consider the increase of $300 – very roughly, the first years increase should be spent on furnishing the house. Furniture should cost roughly $15,000 to have this home furnished and the increase in the next 4 years can be profits. Budget to replace some or all the furniture after 5 years or the profits will be lost in vacancies if it looks bad. This is only a rough guideline as every situation is different.
Hope that is valuable and if you are going to add furniture to increase rent, get some specific advise on the property by someone who has had experience in dealing with furnished properties.
Looking forward to sharing your experiences if anyone else has done this.
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