Furnished or Unfurnished?… that is the question!

Furnished or unfurnished that is the question for your rental property.

You have a number of factors to consider before you decide to furnish your rental property. **

Rental achieved

The rental achieved by letting a furnished property is slightly more than an unfurnished rental property, but often the difference in monthly rental is not huge.  You must therefore consider if the extra potential rent is worth the extra legislative responsibilities that go with furnishing a rental property.

People, who rent a flat or rent a house, often have their own furniture, or can get hold of their furniture.

A property that is unfurnished often includes “White Goods” in the kitchen .i.e .. fridge,  freezer, washing machine and cooker.

The tenant then purchases their own furnishings, which can go with them if they decide to move on to another rental property at a later stage.

(1)  Furniture suffers from wear and tear.

Before you let your rental property,  it is important to draw up a detailed inventory which notes the condition of the property,  and the furnishings before the tenant moves into the rental property.

Photographs can help quickly identify and prove any major changes in the condition of the furnishings or decoration of the rental property.

Should damage to furnishings or decoration occur during the tenancy, this can quickly be spotted by checking the inventory. You have to differentiate between wear and tear ( which happens anyway ) and damage.

Who pays for damage?

Having established the fact that an item, or items of furniture, or major changes on decoration in your rental property have occurred, the tenant should be obliged, under the terms and conditions of the lease contract, to cover the costs of repair or replacement of identified items.

The advantages of Regular inspections

Regular property inspections during the course of a tenancy means that any damage can be quickly spotted, and a quick solution put into place to return the item of furniture or décor back to its original condition at the tenants’ expense.

At the end of the tenancy, a final inspection is made and assuming all “problems” have been attended to during the course of the tenancy, the tenant will be entitled to a full return of their deposit.

The above helps to illustrate the importance of as number of factors you should consider when starting to rent your property:

• Always ask the tenant to sign a detailed inventory when they move into the property
• Always ensure the rental contract has a regular property inspection clause.
• Always ensure that the tenant pays a deposit when they move into the property.

Legislative requirements for the property owner.

I draw your attention to my article titled “Your First  Rental Property”  and suggest you familiarise yourself with the legislative requirements a landlord is under when letting a furnished rental property.

Electrical appliances .. some comments

It is important to remind you here that small electrical appliances,  like TV’s, radios, toasters, kettles and microwaves are items which tend to regularly fail because they are in constant use ( washing machines tend to be more robust)

It is up to you if you want to supply these small electrical items. Please be aware that if you supply a TV,  and the tenant does not apply for a licence,  you,  yes you as the owner of the rental property,  are responsible for the licence…. So, make sure your tenant applies for one, or you remove the TV!

Items covered under the Furnishings Legislation

The regulations apply to the following items which should have a suitable permanent label attached.

• upholstered furniture
• single beds, double beds and bunk beds
• headboards and mattresses,
• sofa beds,
• futons and other types of furniture that can covert to a bed.
• nursery furniture, garden furniture suitable for use in a dwelling is also included
• loose furnishings like scatter cushions and pillows
• non-original covers for furniture.

The following items fall “outside” these regulatory requirements

• antique furniture or furniture made before 1950,
• bedcovers including duvets, loose covers for mattresses,
• pillowcases,
• curtains,
• carpets
• sleeping bags.

If an item of furniture in your rental property does not comply with current legislation, it must be removed before the tenancy begins.

There are tax advantages to be had here!

A plus point about furnished property is the fact that there are tax benefits available for general wear and tear, and also for the cost of replacing furniture and appliances.

It is always advisable to check with a qualified tax advisor to ensure you are claiming all your tax allowances for the furniture and maintenance in your rental property.

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I hope you have found this article useful.

Next I  and will go on to cover the advantages and disadvantages of renting a flat as opposed to renting a house in the next article.

** (please note this article is referring to long term rentals and not holiday lets of 2,3 days or 2 or 3 weeks.)