Is it better to set a rental property furnished or empty?
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by Olga
- January 21, 2021
- Real Estate
- 0
A recurring question among homeowners when listing their property for rent is whether it is more convenient to rent the house furnished or empty. Between the two options, there is not a great difference in terms of economic benefits, but there will be in the type of tenant who will choose our property and in the terms of the rental contracts.
The two alternatives have advantages and disadvantages, so each owner will have to analyze which is more convenient for their particular case.
Whether the decision is to rent it with or without furniture, there are spaces that cannot be totally empty: the kitchen and the bathroom must have the minimum items. In the case of the kitchen, it generally has the complete kitchen cabinets and furniture, and in most cases include appliances such as the stove, oven, microwave, and refrigerator. In the case of the bathroom, it must have toilets and vanity or other similar furniture.
If you are in the dilemma if it is more convenient to rent your property equipped or empty, here we list some differences to help you make the best decision:
- In the real estate market of Panama, generally furnished properties are rented between 5% to 20% more than the value that the same property would be rented without equipping, the range depends on how furnished it is. It must be considered that, although it is a higher monthly income, it requires a larger initial investment since money will have to be spent on furniture, utensils, and appliances in some cases. When setting the rental price, the wear and tear suffered by these objects must be considered: the useful life is estimated to be approximately 7 years.
- If you offer the property furnished, you must carry out an inventory, which will be signed together with the rental contract, with all the equipment that the house has at the time of delivery. When the contract ends and the tenant leaves, it must be verified that there are no missing and no damaged objects.
- The rental contracts for furnished properties are usually made for shorter terms: those who plan to spend a long stay in the home usually prefer to invest in furniture and decorate the property to their liking. In general, people who get a job in the area, come to study or other similar situations rents for a short period and prefer to choose already furnished homes, thus avoiding embarrassing moves and do not need to spend money on equipment.
- Those who prefer unfurnished houses are mostly families who frequently sign rental contracts for longer periods, which provides greater peace of mind to the owner who, for a long time, does not have to worry about finding new tenants.
- Students, due to short stays or for economic reasons, usually choose equipped houses. Some owners choose cheaper furniture if they would rent it to students or young people because they consider that there is a greater chance that they are not careful with them.
- If your property is in a tourist area, it may be convenient for you to offer it furnished, since it gives you the possibility of renting it at a higher price in high season and the remaining months to offer it for short stays.
As we mentioned before, the two options are valid, convenient and are rented with the same ease: each property owner will have to analyze the pros and cons and decide which alternative is more beneficial.
