Disadvantages of Renting Your Investment as a Furnished Long-Term Rental

Furnishing a long-term rental property might seem like a great idea at first. It could potentially attract more tenants, increase the monthly rent, and create a more appealing living space. However, there are several reasons why leaving your long-term rental property unfurnished might be a wiser decision. Here at Keyrenter Gilbert we always want to ensure you are doing everything you can to maximize your return on investment and give you the most up-to-date information and statistics. There are factors that might make sense for your particular investment, but let us help you examine all your options before making that decision. We list some of the the most common reasons in this blog, why it’s usually not a good strategy to list a furnished long-term rental.

1. Tenant Preference

Flexibility for Tenants: One of the primary reasons to avoid furnishing a long-term rental is tenant preference. Many tenants looking for long-term housing already have their own furniture and personal belongings. They may prefer to personalize their living space with items that reflect their tastes and needs.

Stability: Unfurnished rentals tend to attract tenants looking for longer leases. Since they are moving in with their own belongings, they are less likely to be transient. This can lead to lower turnover rates and more stable, long-term rental income for you.

2. Reduced Maintenance and Wear and Tear

Less Maintenance: Furnished rentals require more maintenance. Furniture will inevitably wear out over time, requiring repair or replacement. By offering an unfurnished rental, landlords can avoid the hassle and expense associated with maintaining furniture.

Lower Risk of Damage: Furniture can be easily damaged, especially with frequent tenant turnover. By not providing furniture, landlords reduce the risk of property damage, saving money on potential repairs and replacements.

3. Legal and Liability Issues

Liability Concerns: Furnished rentals come with increased liability. If a piece of furniture breaks and injures a tenant, the landlord could be held responsible. By not providing furniture, landlords reduce their liability exposure.

Insurance Costs: Furnished properties may also require more comprehensive insurance coverage, which can be more expensive. By offering an unfurnished rental, landlords can potentially save on insurance premiums.

4. Broader Market Appeal

Wider Tenant Pool: Unfurnished rentals appeal to a broader range of potential tenants. Whether they are families, professionals, or students, many people prefer to bring their own furniture. By not furnishing the property, landlords can attract a wider pool of applicants.

Flexibility for Future Changes: Keeping a property unfurnished allows for greater flexibility if market conditions change. If the demand for furnished increases, landlords can always choose to furnish the property later. However, if the market favors unfurnished rentals, removing furniture can be a hassle and a waste of the initial investment.

The overall percentage of renters seeking furnished housing remains relatively modest compared to those preferring unfurnished units. Estimates suggest that around 10-15% of renters specifically seek out furnished rentals, which aligns with the niche nature of this market segment​. (Harvard Joint Center for Housing Studies)​​ (iPropertyManagement.com)​.

Furthermore, if you want to furnish your home and not allow pets, because you may fear damage to these furnishings, then you will be lessening this appeal even more. As of 2024, about 62% of Americans own pets. This statistic underscores the significant presence of pets in U.S. households, reflecting the strong bond many people have with their animals. Additionally, nearly all pet owners (97%) consider their pets to be part of their family​ (The Zebra)​​ (Pew Research Center)​​ (Hepper)​.

Conclusion

While furnishing a long-term property may seem attractive, the potential downsides often outweigh the benefits. By offering an unfurnished rental, landlords can enjoy reduced maintenance, lower costs, fewer liability concerns, and a broader market appeal. This approach not only benefits landlords by ensuring more stable and long-term tenancy but also caters to tenants who prefer to make their rented house feel like a home with their own furniture and personal touches.

We are always happy to make time to discuss your specific needs and develop a winning solution for you! Contact us today!