When you start planning to venture into the property rental business, one of the things you should decide on is whether you’ll rent out furnished apartments or unfurnished ones. They differ in terms of the amount of capitalization and both have pros and cons for tenants and even for you as an investor.

Determining whether or not to furnish your units also depends on what need you are trying to provide. If you plan to rent out your units for short-term stays (a few days or months), just like AirBnBs, it makes more sense if your units are fully furnished. Units for long-terms stays, on the other hand, can be either furnished or unfurnished depending on what the landlord thinks is best for his business.

The basic furniture and appliances you can add to a unit are beds, cabinets, a dining set, basic stovetops, coffee maker, and HVAC system. For units that are for short-term stays, it’s best to not spend on expensive items that might be easily stolen.

Related article: Appliances to inspect before the next tenancy

The major disadvantages like the risk of theft and higher capitalization are usually surpassed by the many advantages. Here are a few:

You can stick to a design you want.

Your units are your assets. You would want your units to look how you want them to. Choosing your furniture gives you more control over that, especially if you want to maintain consistent branding across all your different rental properties.

Your marketing photographs would be more attractive.

When you create property listings on property management platforms like Padleads, you can attract more clients if you used photographs of a furnished home, compared to an empty one.

You can charge higher rent and security deposit.

This is also one of the main reasons why a landlord decides to rent out furnished units. Even though it requires higher capitalization, it can bring a higher profit as well.

A furnished unit is a convenience that a lot of tenants are willing to pay extra for. The more features your unit can offer, the higher the rent you can charge. If you can provide appliances that add great value to a tenant’s lifestyle, they will more likely find your unit worthier of their money, because they also don’t have to go through the trouble of loading a truckload of items when they move in.

For long-term tenancies, furnished units can earn 15-20% more income compared to unfurnished ones. For short-term stays, it can be as high as 40-50% more, sometimes even 100% more depending on quality and demand.

You are also legally allowed to charge for a higher security deposit because furniture and appliances are assets that can be at risk of damage or theft. It can be twice the amount of security deposit allowed for unfurnished units.

Related article: Security Deposit Policies Every Landlord in Massachusetts Must Know

You can sell your old furniture before upgrade.

Even though you will invest more capital to furnish a unit, you can get a return on your investment from the higher rent, plus by the time you will need to upgrade your furniture and appliances, you can sell the old ones in a yard sale. Even though they won’t cost as much, you can still get extra cash nonetheless, which you can use to purchase new items.