SHOULD I FURNISH MY PROPERTY?
Should I furnish?
To paraphrase Shakespeare “to furnish or not to furnish that is the question?” This is the first dilemma confronting landlords before letting out their property.
Different levels of furnishing
In some ways there is really no such thing as unfurnished property. This is because you’ll still need to provide carpets, curtains, light fittings, loo roll holders, etc. Having said that, the different levels of furnishing can be generally categorised as follows:
Unfurnished – An unfurnished property is one that will come with floor coverings and that will be pretty much it. This is because most properties are let using an AST.
Unfurnished property Assured Shorthold Tenancy (AST) agreements are relatively rare because most are entered into by tenants wanting a relatively short term let and therefore they will not be looking at providing items such as their own white goods.
Part furnished – this is probably the most common form of let. Properties are let out with white goods such as washing machine, fridge freezer but without furniture such as beds, wardrobes, tables, etc.
Fully furnished – this represents a growing part of the lettings market where the property is fully furnished by the landlord and includes all the basic elements for a tenant to be able to move in and take up residence.
Whether a landlord decides to furnish is often based around the two competing objectives: that of maximising income whilst at the same time minimising the time and effort involved in managing property. Providing furniture will undoubtedly increase the rent that you should receive for your property. This could be as much as a third in some cases. However in deciding whether to furnish or not there are a number of questions that you need to ask.
How confident are you that there is sufficient demand for furnished accommodation. Furnished accommodation is particularly attractive to short stay tenants, for example professional workers who are required to relocate for work for a short period. In this scenario they rather pay a higher rent and then not have the hassle and expense of having to organise furniture for what could be a relatively short stay. Make sure that supply is not saturated. The increasing popularity of buy-to-let as an investment and of city centre apartment developments in particular means that there is an awful lot more choice now for tenants than every before. Be careful that you are not attempting to provide the same accommodation as all the other landlords in a saturated market. This is unless you are confident that you can do it better than the competition or you are prepared to take less rent?
Are you sure that you will obtain a sufficient premium to make all that extra work and investment worthwhile? I would require an absolute minimum of 25% over the unfurnished or part furnished rent.
Are you happy to invest the extra time in furnishing the property and the maintaining it once in place?
Things to watch out for…..
In fully furnishing your property make sure that you do it well. There is nothing worse than a potentially attractive property that is furnished badly and poorly chosen furniture is more likely to put off prospective tenants than bring in the premium rent you want. Interior design is a real art form. Those people that are adept at it can dress a place to make it look a ‘million dollars’ for very little. However if you get it wrong it’s easy to make the place look a mess with it costing you a lot of money into the bargain.
The other aspect of design is that you have to be very clear about who your target customers are. There is a real danger that you could end up ‘kitting’ out a property and end up alienating half of your potential market. If you are unsure of your abilities it’s probably best to save your energy and money and just part furnish.
Finally, remember to ensure that the furniture you use meets all the safety standards
Generally, new items will have been manufactured to ensure compliance so it is only when using second hand items that these rules apply.
Furnishing a small property can cost as little as a few hundred pounds. At the other end of the spectrum it is possible and desirable to spend many thousands of pounds on furnishing a top end property. For those that can get the whole package right the rewards are potentially good. However this has to be balanced against the additional time, costs and risks.
Where to go
There is only one place for landlords to go to get furniture unless you are going for the very top end. That is the Swedish ‘hell or heaven’ that is Ikea.
Love it or loath it there is no escape that the unbelievable value for money represented by this Scandinavian model of interior industrialisation. For just over £500 it should be possible to kit out a one bedroom apartment. There have always been two major downsides with Ikea. Firstly, there is its’ relatively inaccessibility because of the limited numbers of stores; this is nothing to mention the cues when you finally get there. The other drawback is that most furniture comes unassembled requiring you to get out your trusty toolbox and screwdriver. Putting the furniture together is pretty time consuming. However, both of these are now surmountable.
During 2007 Ikea has joined the Internet revolution and now it is possible to order many items online. For those that intend on visiting the best time is first thing Saturday morning. By doing this you will get in, have chosen, eaten a hot dog all before the hordes have even arrived.
For those that are too busy or lazy to assemble the furniture themselves there are now a range of companies that will put together your furniture for you.
They can be found through conducting a search through google.