As a landlord and a business owner, it’s understandable to want to make the highest yield possible for the least amount of input and exertion. This may make renting out a furnished apartment an attractive option at first glance.
On the outside, it promises higher returns and appeals to a specific market segment seeking immediate, hassle-free accommodation. However, upon closer examination, this approach carries its own challenges and considerations that property managers must carefully weigh. If you’re considering this strategy, there are a few reasons why you shouldn’t rent out a furnished apartment.
Higher Maintenance Costs
Furnishing an apartment requires a significant upfront investment in the initial purchase of furniture and the ongoing maintenance and eventual replacement costs. Landlords must anticipate wear and tear, accidental damages, and the natural aging of items, which inevitably leads to higher maintenance costs.
Additionally, tenants’ aesthetic preferences and practical needs can vary widely, making it challenging to provide pieces that universally appeal to and withstand the test of time. This often results in more frequent updates to décor and furniture than would otherwise be necessary for an unfurnished property, further escalating the financial burden.
Increased Risk of Damage
One of the main reasons why you shouldn’t rent out a furnished apartment is that it greatly enhances the risk of damage to personal property. Unlike an unfurnished unit, where the tenant is primarily responsible for their own belongings, a furnished apartment places the burden of care on the landlord’s assets.
From minor scratches on furniture to broken pieces, the potential for wear and tear rises significantly. Even with detailed lease agreements and security deposits, assessing and attributing specific damages can be complex and contentious.
Preference for Personalization
Many tenants value the ability to personalize their living space, a desire that is significantly constrained in a furnished apartment. This preference for personalization is not merely about appearance; it impacts how tenants feel in their homes, their level of comfort, and, ultimately, their happiness.
Landlords must recognize that while adding furniture to an apartment can seem like an added amenity, it may inadvertently dissuade a large market segment that prioritizes making their living space their own.
Depreciation of Furniture
In addition to the practical challenges outlined above, it’s important to consider the inevitable depreciation of furniture over time. Every piece of furniture within the apartment will lose value financially and aesthetically as it undergoes daily use. This depreciation affects the potential resale value of these items and, as mentioned, creates the need for frequent replacements.
The need to constantly update or replace furniture to maintain an attractive and functional living space for tenants further compounds the financial pressures on landlords.
While renting out a furnished apartment might seem like an attractive opportunity, the challenges it presents may be more trouble than it’s worth. If you’re looking for an easy way to get the most out of your investment, Excalibur Homes can help.
As one of the top home rental companies in Georgia, our property managers are experts in making the rental experience easier for you and your tenants. When they’re happy and your property is properly cared for, all you must do is watch the returns roll in.
