Should you buy furniture for your investment property

If you are buying a new apartment, chances are you have been pitched furniture packs. Often around £4k-£6k. If you are doing a refurb, then you may be looking at furniture to finish the entire design off. Ultimately you will have to do your own calculations to see if furniture will bring you more money. Below we run through what considerations you will need to make.

Pros

Better tenant – From Fabrik’s experience a furniture pack is more likely to attract a more reliable tenant to the property. The reason could be as simple as a working professional does not have time to worry about furniture, and is willing to pay extra for the ease of moving in.

More rent – You will be able to charge additional rent than if it was not furnished

Cons

Cost - Can easily cost you and additional £5,000

Damages – Bad tenants can quite easily ruin or destroy the furniture, which will then cost you even more to replace it or will just make it a pointless investment for your next tenant

Important factors

Balance cost to additional income - Balance how much furniture pack costs and how much extra rent it can give you. If a furniture pack is only going to give you an Extra £50 a month, then it probably isn’t worth it. If, however it’s going to give you £300 extra rent a month then chances are it will see an additional return after 2 years.

You can work this out by searching rental comparable in the area on Rightmove or Zoopla. Look at what property is being let at and whether they are advertised as furnished or not. You will easily be able to calculate if you can get a return.

Replacing furniture – Furniture is not a long-term investment as it will need replacing. This could be a case of potluck with how well your tenants have treated it. If you know you can get tenants without having to replace to brand new furniture, then there may be little need to fork out again for furniture.

Competition – If you have an investment in a brand-new apartment block then you may need to make other considerations. As all units will become available at the same time there will be a lot of competition and if other units have furniture and yours does not, then you could end up with no tenant for quite some time. In this scenario it may be better to buy furniture regardless of the calculated returns just to ensure occupancy.

Type of Property - The use of your property will make a major difference to your choice of furniture. If you are running a short term let or student property then you have almost no choice but to ensure it is fully furnished, as these tenants expect it.

If you are doing a standard long term let on your property, then maybe look at what kind of tenant you expect. With working professional tenants, you may want to seriously consider furniture. With a family it may be a bit tricker. If they decide to stay for years, there is a good chance they may make the property there own and buy their own furniture.

If you are running a high end holiday property then you will likely need to go all out on luxury furniture, and ensure it is always up-to-date.