Jeffrey Asselstine
Managing Director
NelsonPark Property LLC
A question that we get from a lot of landlords is whether or not they should furnish their rental properties, or leave them unfurnished, or to use Qatar-based terminology, fully furnished or semi furnished.
As with a lot of questions like this in real estate, well, it depends. There is no one perfect answer to this as both approaches have pros and cons. Let’s review those first.
Pros of providing your property to rent on a fully furnished basis:
1. Higher rental rate – to state the obvious, a property that is fully furnished will be able to receive more rental income than a property that does not have furniture, which the tenant would need to provide
2. Potentially attract more tenants as there will be a lot of people that do not have furniture and will only be able to consider fully furnished property. This is particularly important for one bedrooms and studios. Families with 2 or 3 children will often have their own furniture but singles and young couples will frequently just have the basics and will need more furniture from the landlord to fill the place out.
3. Disposal value of the furniture. The increased rent will normally cover the cost of the furniture after a two-year period. From there, if the furniture lasts, you can benefit from increased rent on furniture that is already paid for. After that period, you can often sell the furniture at a reduced price, but still make some extra return on the value.
Cons of providing your property to rent on a fully furnished basis:
1. Higher potential tenant damage – given that the tenant will be using the furniture there will be obvious wear and tear and an added cost compared to the tenant using their own furniture. Good quality and “tough” furniture that will withstand use is always recommended. Avoid white cloth that easily stains.
2. Some tenants will like the property, but not like the furniture. With this in mind it is very important to make sure that the furniture is fairly generic so that it appeals to a broad range of potential tenants.
3. Storage cost of the furniture if you have to remove some or all of it for a prospective tenant. A lot of landlords just don’t have the space or another property where they can put the furniture, so this becomes a real added cost that a landlord does not want to pay, and can often end with a deal not being done if the landlord cannot remove the furniture for the tenant.
Hopefully a few little pointers above to give you some things to consider whether or not to furnish your rental property. If you still can’t decide, I would suggest the following rule of thumb – in most cases leave things as they are. If you are a landlord with only one or two properties in your portfolio, in other words, you don’t have flexibility to move furniture around between your properties, and the property is not currently furnished, then don’t furnish it. I would recommend to leave it as it is and keep the option to furnish it at a higher rent if the tenant requires it as part of a negotiation. Similarly, if it’s already furnished, leave that as it is too (assuming it is of good quality and attractive) and you could earn a potentially higher rental return.
This article was published as part of the sixth edition of Property Finder Qatar’s Trends Report.
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