Thinking of Furnishing a Buy-to-Let? Read This First!
If you’re in the market for buy-to-let property, then you’ll obviously have all kinds of things running through your head. From landlord taxes to the rise and fall of different areas’ property markets, buying and capitalising on a buy-to-let property is no simple task. One of the things that all landlords have to think about at one point or another is the furniture in your properties; what you should supply and what you don’t need to bother with. If you feel totally lost, then read on. Here’s a post that will shed a little light on the whole furniture issue.
In my personal opinion, furnishing your properties Is usually a bad idea. One of the big drawbacks of furnishing rental properties is the immediate increase in maintenance and responsibility. We all strive to have a fairly positive relationship with our tenants, so you may feel inclined to provide your tenants with a lot of furniture right off the bat. However, this may end up making your job a lot harder and more expensive in the long run. The simple fact of it is that the more furniture you put into a buy-to-let home, the more you’re making yourself responsible for.
This will give your tenants more pretence to call you when something breaks or gradually falls into disrepair. You provided this big, expensive dining table when they first moved in, so naturally you’ll be expected to pay to fix it. With big investments like this, it’s always important to minimise your risks as much as possible. Choosing not to cram your rental properties with furniture is one of the more basic ways to minimise the risk of a loss. If you’re called to replace an item which you didn’t even need to put in in the first place, how are you going to feel?
You may feel more inclined towards running a furnished rental property right now, thinking that the added responsibility will be covered by being able to charge more for the property. However, in the large majority of cases, furnishing a property doesn’t usually bring in any extra income. In fact, I wouldn’t be surprised if it usually costs the landlord more rather than generate capital for them. It may be true that you’d be able to charge a little more for a property when it’s furnished.
However, in all likelihood, it won’t cover many of the other costs. We’ve already talked about the extra maintenance and repairs you’re going to have to cover when you furnish a property. Another big factor is that furnished properties are easier to move in and out of. Moving is a massive hassle for anyone, and if they have to bring a load of furniture with them they’ll be even less inclined to do it. This leads to longer vacant periods, where the tax and bills will stack up with no income to cover it all. Aside from that, you’ll have to invest more time into each individual property, working on keeping a comprehensive inventory of all the pieces you’re holding there.
While my opinion on furnished buy-to-lets isn’t exactly favourable, it doesn’t mean you should rule it out completely. There are still a number of scenarios where furnishing a rental property can in fact be a good thing. The first of these is a short-term home let. This is more for people who are landlords out of circumstance, rather than as a major source of income.
You may hit a point in your life where you want to up sticks and travel the world or something similar. In this case, put all the important stuff into storage, and rent the place out for a short space of time. If you’re going to do this though, just don’t expect to come back and find everything just the way you left it. You obviously take care of your valued possessions. Your tenants may be a different story. If you want to leave it all with a certain guarantee that it will be fine, try to rent it out to a family member or a close friend.
Another situation that may call for furnishing is when you’re looking to shift a house with four or more bedrooms. If you’ve got one of these on your hands, then I’m afraid you’ve already made a bit of a mistake! In my experience, homes this large aren’t exactly the best choice for a buy-to-let property. You should be aiming for 1-3 bedrooms ideally; have a look at taylors if you’re in the market right now.
However, when it comes to 4 bedrooms or more, you’re only going to be attracting a certain kind of tenant. I highly doubt these guys will have either the means or the dedication to fill such a big place with new furniture. There’s simply too much hassle and money involved! If you’ve got a larger property on the market, then furnishing it may be a sound financial choice. It will attract the right kind of client, making for less vacant periods.
Finally, student lets. If we’re talking about your own home and your own furniture here, then understandably you’ll think “forget about it”. However, if you’re in a position to buy inexpensive furniture, then furnishing a student house could be a great way to bump up your income somewhat. Obviously, you don’t have to turn away anyone who isn’t a student.
However, you should be targeting tenants in their early to mid-twenties, who have very little furniture if any to lug around. The most important thing in this scenario, as always, is the location. The neighbourhoods around universities, along with artsy, bohemian urban areas, are a hot bed for your ideal tenant. Just double and triple-check what’s in the house. There will be damages.
Hopefully, this has made the whole issue of furnishing your buy-to-let properties a little clearer. By and large, furnishing your rental properties is a big no-no, practically and financially. However, if you’re in a certain situation, kitting out the home can certainly be a good idea.