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Helping Property Investors Decide: Furnished Or Unfurnished?

So you've just bought a property and are trying to decide whether to rent the property out either as a furnished property or unfurnished property.

Are you wondering what things you should consider?  This article contains some suggestions and comments on the difference between furnished properties and unfurnished properties.

1. Financial returns

Furnished properties can generate higher rental rates because of the premium achieved when providing furniture and the convenience of shorter stays.  However, consider average occupancy rates as well and higher management fees associated with more hands on management.

Some properties in city areas will generate a higher return because occupancy can be maintained at a high level but in coastal areas a lower occupancy might be expected with holiday and occasional weekend bookings.

2. Cashflow and Mortgage Commitments

Furnished properties generally have seasonal rental periods.  Are you able to manage the both the peak and off peak cashflow variations?  During winter the rental rates are lower and the occupancy is lower so the double impact may result in reduced cashflow. 


3. Market Conditions

The furnished rental market also has cycles in vacancy depending on a range of factors including: the currency (strong AUD is not good for overseas visitors), major sporting events, the timing of holidays, weather and the relative supply of alternative accommodation.

When the unfurnished rental market is tight, this also spills over to the furnished rental market.

4. Furniture Investment Costs

Investing furniture involves significant upfront costs. You will need to maintain this furniture to an appropriate standard of repair and cleanliness which involves ongoing costs. For example, changing linen, mattress protectors and lightbulbs on an ongoing basis all costs money.

To recoup your investment in furniture you may need to allow anywhere from 3-10 years.  This means its more expensive to exit this investment compared to a standard property rental.

See other articles on the Standard Inventory suggested.


5. Occassional Usage

One key benefit of investing in a furnished property such as a holiday rental home or corporate style apartment is that you can use the property in between renters.

6. Flexibility of Tenancy

For some investors or property owners, short term tenancies may be more suitable. For example, expatriates working overseas on contracts may find the ability to access their property at short notice more advantageous.

7. Quality of Tenant

With furnished properties in the CBD areas, generally the clients tend to be from corporations and generally paying a higher rental rate. You may find generally that there are fewer issues relating to damage or unacceptable behaviour.

8. Risks and Insurance

Consider the differences in risks with furnished properties and make sure you have appropriate insurance cover for your holiday home or corporate apartment.  Most likely you will have to advise the insurance company and your bank that you are short term letting.

10. Taxation

Check with the Australian Taxation Office about the decpreciation benefits you are able to enjoy on your furniture, fixtures and fittings.  Also consider the GST implications given your income status.


In summary, for a range of reasons, many investors find furnished properties to be a worthwhile investment choice.

It's important that you see your own financial advisor and tax accountant as well as consult a property manager so you can fully appraise your situation and decide appropriately whether to invest in a furnished property.
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