Is it better to let furnished or unfurnished properties?

When you start planning to let out your property, there are a number of questions you need to ask yourself. How much rent will you charge? Do you want a property management company or will you do that yourself?

Choosing whether to rent your property furnished or unfurnished may not seem like one of your highest priorities, but it’s an important consideration that can impact the type of tenants you’re likely to attract.

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Before we dive into the pros and cons of each, let’s define exactly what we mean by furnished and unfurnished.

What does unfurnished mean?

To start with, it’s important to note that there’s no legal definition of furnished or unfurnished, but there are some expectations about what will and won’t be included.

What does a landlord have to provide in an unfurnished property?

Although the name “unfurnished” suggests that your rental property will be completely bare, there are some things that are generally expected in an unfurnished property:

• kitchen fixtures such as cabinets, a sink, and anything else ‘built in’
• white goods such as an oven, a fridge, a freezer, and a washing machine
• bathroom fixtures such as the sink, toilet and shower
• carpets or other types of flooring
• curtains or blinds

If your property doesn’t come with something from the above list (say your property doesn’t come with a fridge or there are curtain poles but no curtains), make sure you let prospective tenants know. You don’t want a missing item to come as a shock to them when they move in.

What does fully furnished mean?

Furnished (or ‘fully’ furnished) properties are ones that have more than the bare minimum you get with an unfurnished flat.

What does a landlord have to provide in a furnished property?

Again, as there’s no legal definition, it’s really up to the landlord what they provide. But things that are usually expected are:

• a bed – or more than one, if there are multiple bedrooms in the property
• a table and chairs
• a sofa or armchairs
• a wardrobe or chest of drawers

This is, of course, as well as everything you’d expect to get in an unfurnished property.

What does part furnished mean?

A part furnished property is, as it sounds, a halfway house between unfurnished and furnished. Maybe you have some furniture that comes with the property, but not enough for it to be considered furnished.

If you have multiple properties, or somewhere you can store furniture, part-furnished properties can give your tenants flexibility – they might have some of their own furniture, but not all, so want to keep some items in the property and have others removed. For some landlords this won’t be a practical option, but it can help you attract tenants.

Benefits of letting a furnished property

There isn’t a straightforward answer to whether you should rent your property furnished or unfurnished. It depends on what type of property you have, where it’s located, what sort of tenants you’re after, how much work you’re willing (or able) to put in – among other things.

Here are some of the potential benefits of letting a furnished property:

• attract ‘turnkey’ tenants – depending on where your property is, you may find there are tenants in your area who’re particularly keen on furnished properties. Students, recent graduates, and young professionals often prefer furnished properties, and are more likely to be looking for somewhere to live in city centres
• let your property faster – in general, furnished properties are more popular than unfurnished, and will be snapped up faster. However, it all depends on where your property is based – a rural cottage may work better unfurnished than a city centre studio apartment. A bit of research can help before you decide
• higher income – furnished properties tend to attract more rent than their unfurnished counterparts
• spare expenses – if you’ve come into possession of a property that’s already furnished, through inheritance for example, it may be easier and less expensive to let the property as it is rather than pay for the furniture to be removed

Benefits of letting an unfurnished property

While there are benefits to renting out a furnished property, there are also benefits to choosing to go unfurnished:

• attract long term tenants – tenants who’re looking to settle down are likely to come with their own furniture, or want to purchase it. However, this will depend on location – think of the rural cottage vs the city centre studio again
• lower upfront costs – if your property isn’t already furnished, not having to purchase furniture will keep your upfront costs down
• lower insurance costs – you’re not obliged to insure your tenants possessions, so you may end up paying a lower premium than if you’d decided to protect your own contents
• one less thing to worry about – if the furniture you supply has sentimental value it might make you anxious to leave it with tenants. Even without that, including it can mean more work when it comes to things like end of tenancy checks, where you may want to minimise your stress

The difference between furnished and unfurnished in tenancy agreements

If you’re going to be letting your property furnished, it’s important that you reflect that in your tenancy agreement.

The tenancy agreement sets out the rights and responsibilities of both the landlord and the tenant, and if you have expectations about upkeep regarding the fixtures, fittings and furnishings you’re providing, you’ll need to make sure those are covered.

However, you have to remember that acceptable wear and tear is permitted in rental properties, and that includes anything you provide.

Have a look at our tenancy agreement template to get you started, but it’s best to seek legal advice – either directly or through your letting agent – to make sure that you’re both protected and operating within the law.

Furnished vs unfurnished – how does it affect my insurance?

When you decide to start renting out your property, it’s important that you take steps to protect your investment – whether that’s from a disaster like a fire or flood, or from unruly tenants.

If you choose to include furnishings in your property you may want them to be covered against damage and theft. That’s when you would want to take out landlord contents insurance alongside your building cover.

Safety standards for furnished and unfurnished properties

Whether your property is furnished or unfurnished, many letting agents will recommend you get a Portable Appliance Test (PAT) for any electrical appliances you provide. The PAT will ensure they’re in safe working order. Though it’s not a legal requirement, it can reassure tenants that you take their safety seriously.

For furniture, however, you will need to make sure it meets the legal standards of flame resistance. All fabric furniture – such as sofas, armchairs and mattresses – must have labels proving that they meet this standard. Almost all furniture comes with these labels these days, so you just need not to remove them.

Read more about landlord electrical safety regulations.

How furnished properties impact your tax

If you let furnished property, the 'renewals basis' introduced in 2016 means you can reclaim tax for the cost of replacement furniture. This includes soft furnishings, appliances and kitchenware.

Find out more about tax and allowable expenses in our guide to Self Assessment for landlords.

Will you let your property furnished or unfurnished? Let us know in the comments