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Furnished vs unfurnished

“To furnish or not to furnish your rental property, that is the question”

The difference between furnished & unfurnished rental property?

Firstly, there is no absolute definition. Strictly speaking, unfurnished rental accommodation would come with no floor coverings, curtains or white goods. This low level of specification is demanded by a minority of tenants and may be appropriate for a landlord who was letting on a Assured Tenancy as opposed to the Assured Shorthold (AST) used by the majority of landlords.

The Assured Tenancy was intended for those landlords who were prepared to grant their tenants full security of tenure, thereby making it worth while for them to invest in furnishing it with carpet and curtains. Most tenants on an Assured Shorthold Tenancy will expect at least carpets and curtains, even if the landlord does not provide white goods such as cookers, fridges and washing machines. Where these are included it’s referred to as a part furnished property. In my experience the vast majority of tenants seek property that is part furnished.

For those landlords seeking official clarification on the issue; one definition that might be helpful is the HMRC definition of what constitutes a furnished property:

“To be classed as furnished the property must comply with the Stamp Office definition of “furnished” which is in accordance with that used by other departments of the Inland Revenue, meaning that the tenant can move into the property without having to take with him any furniture at all. The property should therefore contain as a minimum such items as a sofa, one or more beds, plus a dining table and chairs, a cooker, carpets, curtains and other white goods in the kitchen. If the property only contains curtains, carpets and white goods in the kitchen this would not be classed as a furnished property.”

What are the advantages of furnishing your rental property?

One of the obvious attractions to a landlord of furnishing their buy-to-let is the potential for them to obtain a much higher rent. In theory this could be anything up to 20%….great you might think. Before you get too carried away, the demand for furnished property varies considerably in different parts of the country and different sectors of the lettings market. Generally, fully furnished property is attractive to corporate lets. A corporate let is where the landlord lets to a company or organisation that in turn uses it to accommodate a member of staff. Because it is not let to an individual, it can’t be an Assured Shorthold Tenancy and the landlord will have to go to the expense of having a specifically drafted letting agreement.

Another thing to note is that by providing a property to let that is fully furnished; a landlord could seriously narrow their letting market thereby increasing the risk of suffering a void. A landlord that gauges the market right and are letting in areas of high demand for corporate lets such as in parts of London and other large metropolitan areas could indeed secure a premium rent from a blue chip company. However, in order to do this a landlord would have to do a considerable amount of research, know exactly what is expected from this market and pitch their investment just right. Get it wrong and you could end up with an over priced, furnished property which lays empty for a very long time.

Whilst the premium rent that a landlord could secure from letting their property fully furnished seems an attractive proposition for the extra effort of including a bed and a few book shelves from IKEA. What you need to remember is that flat packed furniture as well as being cheap is not always the most robust. Having agreed to take on the responsibility for furnishing a pad, a landlord is then responsible for the maintenance of these items. Also if you go for high end corporate lets in London, some cheap furniture from IKEA will not get you the top end tenants that you need to secure your premium rent. To do that you will have to design and furnish the property to a very high standard. As we all know, design and ‘good taste’ is very individual so making it look high end and appeal to broad range of corporate tenants take real skill and a lot of work.

Letting furnished property through Airbnb

For many landlords the rise of Airbnb and the short let market as luxury holiday accommodation
has changed the rental equation for furnished lettings. I use example of my own holiday let in Bakewell. To let it as an unfurnished 1 bedroom apartment it would possibly obtain £500 ppm this is roughly what I would expect to get for a week when I let it as furnished holiday accommodation. The difference between the two is:

  • two zip and link beds
  • a wardrobe
  • sofa
  • few chairs and a breakfast table
  • some basic floor lamps

In essence a landlord with the right property on Airnbnb can let the property at 4 to 5 times the amount they would expect to receive as an unfurnished or part furnished property which dwarfs the 20% potential uplift. The downside is that there is far more work involved. Take for instance the property in Bakewell. Over a single month of September the property was pretty much fully let but that has involved 5 separate sets of guest along with organising the check outs and check ins. A lot of work compared to my other buy-to-lets that pretty much manage themselves other than the odd maintenance issue.

Other lettings needing furnishing

As well as corporate lets; the other demand for fully furnished accommodation is for benefit tenants who may not have the resources to furnish their own space; or student lets where the tenancy tends to be shorter and the assumption is that furniture is provided.

Where a student let is involved a landlord will often have to comply with standards laid out by the university’s accommodation department if they want to get listed in any of their accommodation lists. Minimum standards of furnishing will normally apply. This will include beds, wardrobes and a desk, etc.

The other situation where landlords end up furnishing their property is where they end up letting their own home because they are moving away for a time. A friend of mine recently worked abroad in Quatar for a couple of years and then let his property fully furnished. The upside for him was that he saved on storage costs. The downside is that you risk that your personal possessions will be lost, damaged or stolen. So think carefully before you in trust all your personal effects to a house of tenants.

One aspect to be aware of is that if you do decide to throw in a TV in a fit of generosity this could technically make the landlord liable for the TV Licence.

Insurance and furnished lettings

The cover provided for furnished lettings will vary with each type of insurance provider. Under some landlord insurance policies such as the one provided by Alan Boswell things like white goods, carpets and curtains are covered by the landlords building insurance. Other companies require a separate contents policy. In both cases furniture will need to be covered by a separate insurance policy. Again for those landlords looking to furnish their property, this is extra expense and has to be factored into their investment decisions.

Maintenance of furnished rental property

Not only is there an initial effort in kitting out the buy-to-let property, your maintenance list will inevitably grow dramatically longer as bits of furniture fail. A landlord will also have a much bigger job with their property inventory.

Keeping track of what furniture and other items you own and the state of its repair will become a much more complex affair. I have heard of one particular fastidious landlord whose inventory on their fully furnished property ran to some 24 pages! If a landlord has the time and gets it right it may be worth the extra hassle. In my opinion I’m happy with slightly less rent, more flexibility and much less work. Where I have yielded before on the furnishing front to tenants’ demands is when I’ve struggled to rent a property and a tenant has requested an item of furniture because for instance, they do not have a bed of their own. Where I might have faced a prolonged void I have been prepared to compromise with the tenants demand and go the extra mile. Otherwise for me the extra hassle isn’t worth the money.

My advice to landlords considering furnishing their property is to be clear at the outset if they are going into the furnished lettings market. They then also need to be sure which letting sub-sector they are going to target whether it be the corporate lettings market, tenants on benefits or student lets. They then can buy the right property and fit it out accordingly to clearly meet the specifications of this class of tenant. It will be a mistake to purchase a buy-to-let and then think about furnishing it as an after thought. Where a landlord does this, the chances are that they will be left with an investment white elephant.

Dear all at PropertyHawk..

Very interesting as usual but one point…

re Furnished v unfurnished you state

“Firstly, there is no absolute definition of furnished and unfurnished property.”….

Err, no… I’m sure that in most Landlord’s minds when considering furnished v unfurnished one key point being considered is the 10% wear-n-tear HMRC allow.. and they say to get that 10% then you must comply with



Phillip (theartfullodger..)

Also don’t forget if its furnished you are liable for full council tax in void periods which can add up quite quickly!
Also you can bet that some tenants want furniture or white goods and some don’t so unless you live locally and have a van and some storage it can become a pain.
thanks for the interesting articles.


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