Many landlords are unsure of the difference between renting out a furnished and unfurnished home.
Experienced landlords know the answer is simple – a tenant only has to walk in to a furnished home with their personal belongings and linen to make a buy to let their home.
An unfurnished home generally comes with carpets, curtains and white goods – like a fridge, cooker and washing machine.
Letting furnished or unfurnished depends on the property and the target tenant market.
Here are some points a landlord needs to consider when furnishing a buy to let property:
Furnished lettings
- Attract younger tenants who may not have their own furniture
- The moving in process is quicker
- Landlords can set off wear-and-tear on furniture against rent
- A furnished home attracts a higher rant than a similar unfurnished home
- Landlords must comply with fire safety regulations
- Landlords must pay for replacing furniture that’s past the sell-by date
- If the tenant doesn’t want some or all of the furniture, the landlord must arrange storage
Unfurnished lettings
- Tenants who make a house a home with their own furniture may stay longer
- No replacement or repairs are needed at the landlord’s cost
- Rents are lower for unfurnished homes
- Landlords cannot set of any wear-and-tear allowances against rental profits
Landlords letting furnished property can set off 10% of the value of the furnishings supplied against rents every year – even if the property is making a loss.
However, landlords cannot claim the cost of providing the furniture as a business expense – only wear-and-tear, which is a tax relief for depreciation.
Whether a property is furnished or unfurnished also affects council tax in some areas.
Many councils offer a discount for empty properties for up to six months – but only if they are unfurnished. This exemption is fast disappearing as councils try to claw back revenue that is disappearing through government spending cuts.
Providing furniture also depends on a landlord’s target market – students and young professionals expect furnished lets, but couples and families often prefer to rent an unfurnished home.
