Join Australia's most dynamic and respected property investment community

Furnished Rental Propery

Discussion in 'General Property Chat' started by LMD, 25th Mar, 2016.

  1. LMD

    LMD Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    65
    Location:
    Melbourne
    Hello Forumites,

    We are currently in the settlement period and the current owner has approached us to purchase their existing furniture - bed frames, fridge, wardrobes (house does not come with BIR), washing machine etc at at discounted price. Are there any benefits of supplying a fully furnished rental property? is it worthwhile?


    Thanks
     
  2. JenW

    JenW Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    365
    Location:
    Perth, WA
    You can command a higher rent. They're a lot more work. You also need to be prepared to wear the costs of electricity, gas, water, internet etc, as these are typically included in a fully furnished property.
     
  3. Ember

    Ember Well-Known Member

    Joined:
    29th Nov, 2015
    Posts:
    54
    Location:
    Australia
    Depends on suburb. We tried it in a house near the Uni as competition was an issue one year. It worked ok that year. The very next year the next group of students asked us to remove all the furniture, so it was a bit of a hassle in the end.
     
  4. Ember

    Ember Well-Known Member

    Joined:
    29th Nov, 2015
    Posts:
    54
    Location:
    Australia
    Wardrobes could be useful if they look good. Fridge and washing machine useful too if newish. Remember if they break down renters will expect you to replace them if you provide them. Bed frames less useful as I find most people have/prefer their own bed. Unless they are really nice and virtually free. You could always sell them on Gumtree.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,940
    Location:
    Sydney
    If I rented a house I probably wouldn't want someone else's furniture so it could also limit your market.

    Also what is the value of the furniture - it may be better to buy your own.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,940
    Location:
    Sydney
    If I rented a house I probably wouldn't want someone else's furniture so it could also limit your market.

    Also what is the value of the furniture - it may be better to buy your own.
     
  7. Kate Moloney

    Kate Moloney Well-Known Member

    Joined:
    10th Dec, 2015
    Posts:
    445
    Location:
    Australia
    Depends on the area, you'll need to do your research. Maybe ask some property managers in the region what the demand and rental price is for furniture?

    Will need to factor in additional costs for things that break - especially your essentials like fridges which don't always last long and can be cheaper to replace than to repair.
     
  8. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,342
    Location:
    4/136 The Parade Norwood, South Australia
    I would not recommend furnished, you can't just increase the price and expect tenants to pay more it does not work that way.

    Furnished properties can achieve a higher rental but not all properties are suited to being furnished.

    Newish excecutive style houses inner city or at beach locations with the right kind of furniture can achieve high rent, but the ad is targeted to a different demographic of tenants. It is almost a commercial arrangement.

    Furniture needs to be replaced every 5 years or so, that demographic will not put up with old used furniture and it needs to be styled correctly.

    We've taken a $700/week property to $995/wk by adding furniture and targeting a corporate market.

    If you don't get it right and target the pool of normal renters, they will tell you to remove it all as they have their own.

    You also need a property manager who is well connected because these types of tenants do not always just come off realestate.com.au - there is a bit more to it.
     
    kierank likes this.
  9. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,342
    Location:
    4/136 The Parade Norwood, South Australia
    In our furnished rentals, we have about 30, tenants pay for all water usage, water supply charges and they connect their own electricity, gas and Internet. Our landlords are not responsible for utility charges.
     
    EN710 and kierank like this.
  10. Foxy Moron

    Foxy Moron Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    132
    Location:
    Regional QLD
    Hi Xenia
    Thanks for that input. Just curious - out of that 30 or so furnished properties - would you say the demand is all for the executive style modern homes, or do you have any demand for the cute historic cottages etc as furnished ? Also - what is the typical length of stay for these tenancies. Do they commit to 6 or 12 month arrangements, or are they more weekly/monthly leases due to short-term work secondments ? Cheers.
     
    Xenia likes this.
  11. WestOz

    WestOz Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    625
    Location:
    WestOz
    If its local to where you live, can manage it yourself, being furnished you could possibly get more income letting out individual rooms to singles (or airb&b).
    (e.g. single fifo workers need a place to stay when off site, store stuff/car etc.)
    Price per room would be all inclusive (cleaning etc) excluding food.
     
  12. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,342
    Location:
    4/136 The Parade Norwood, South Australia
    Hey Foxy
    for our management portfolio, the rentals are new and furniture is new, that does not mean that it would not work with older type cottages, I just know the market I'm working in and what they want.

    we recently sold a furnished older home that was rented to students, I gave the management to another property manager who was happy to manage them. we've set up over 40 student accommodations but for now like to stick with rentals where the landlord is protected by insurance and legislation. When things go wrong in rooming house agreements, it's difficult to deal with.

    Please don't take my experience as the only way to do things, I'm just sharing what has worked for us in the market we work in.
     
    EN710, Foxy Moron and kierank like this.
  13. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,342
    Location:
    4/136 The Parade Norwood, South Australia
    Leases are 3 - 12 months.

    we do not work with leases under 3 months because we like to take 6 weeks bond.
     
    Foxy Moron likes this.
  14. LMD

    LMD Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    65
    Location:
    Melbourne
    Thanks for your input guys, we have decided not to purchase any of the furniture :)
     
    Xenia and Terry_w like this.