Furnished vs. Unfurnished rental properties
Spring has certainly arrived! Not only has it brought the blossoms out across Hagley Park, but it has also brought new investors to the rental market who have been attracted by the low-interest rates on offer from the banks.
A question I often get asked, especially from new investors, is: “Should I furnish the rental property?”. Fully-furnished rentals were traditionally a very small part of the Christchurch rental market until an influx of temporary workers post-earthquake saw demand boom. Many of the Property Owners who had been renting fully-furnished over that time now have garages full of unwanted furniture, but there is still some demand from longer-term visitors, those working on shorter term contracts, and a conversion to nightly stay accommodation through various websites.
In terms of numbers, I recently searched on TradeMe for fully-furnished properties available for rent in Christchurch and found about 20% of the total listings met that filter – but some of them are rooms in houses, some listings are months old, and others are continual listings for future short-term stays. Those supply numbers may give the impression that there is more demand than we really see.
I’m finding the demand for fully-furnished properties is suburb specific; with interest in the central city, the hill suburbs from Cashmere to Sumner, and around the University, but little anywhere else. The upside is that rental prices for furnished tenancies are normally higher than unfurnished properties, but they do attract shorter-term tenancies, and every time you turnover a tenancy there is a cost.
If you are going to rent your property as fully furnished, it is important to have an inventory and limit the amount of furnishings to the essentials, and to make sure all appliances are in good working order. Property Owners are responsible for repairing all items on an inventory - or replacing them if they cannot be repaired - so this is not the place to shift your old washing machine or old television set.
If you are considering furnishing a rental property or looking at purchasing a fully furnished property give us a call and we are happy to talk you through it.
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