To furnish, or not to furnish your investment property? That is a common consideration for property investors. While there are both advantages and disadvantages to this approach, a furnished investment property can work well in the right market. But it’s important that you furnish it correctly to have maximum impact and make it worth your while.
Here are nine tips to help you furnish your investment property.
- Decide on the style
- Colour considerations
- Level of furnishing
- Choose furnishings with your target market in mind
- Work with the space you have
- Choose the right materials
- Consider depreciation for your furnished property
- If it’s worth doing, do it well
- Make it homely with accessories
1. Decide on the style
Rather than buying pieces ad hoc, it’s important to know what overall look or style you’re going for so everything you purchase will work in harmony. Will that couch match your carpet and go with the dining table you’ve already bought? The style you select should flow through the entire home – don’t try and assign different décor styles to different rooms.
It’s also advisable to stick with a ‘middle ground’ look – don’t choose anything too polarising, like garish wall colours or quirky furnishings that will turn renters away. Also avoid following seasonal trends that will be out of fashion in a year’s time. Instead, opt for a timeless look with classic pieces that won’t date quickly.
2. Colour considerations
When it comes to decorating a rental property, you can’t go wrong with neutrals. For core items like the lounge and dining table, stick with darker colours to disguise wear and tear a bit better, and then introduce pops of colour with some accessories.
3. Level of furnishing
Are you going to partially furnish the property with core appliances and whitegoods or provide everything down to cutlery, clothes hangers and pegs? It’s important to decide this before you start making any purchases. A large consideration when deciding this will be your target market…
4. Choose furnishings with your target market in mind
Is your investment property suited to student accommodation or an inner city apartment targeted at management-level professionals? Your target market will determine how you should furnish your investment property.
If you’re hoping to attract students, you’ll generally only need basic pieces in the bedrooms like a single bed, a desk to work at and perhaps a TV. You also wouldn’t include anything too luxurious or high quality due to the higher turn around and increased wear and tear.
If, on the other hand, you’re hoping to attract high-level professionals, you’ll want to appeal to this market with a few more luxuries, homely accessories and higher quality pieces. And if you’re furnishing a large family home in the suburbs, this would require different furnishings once again.
Be realistic with your target market and furnish the property accordingly.
5. Work with the space you have
It’s important to choose furniture specific to your property. This involves knowing measurements to buy appropriate pieces to fit and choosing furnishings that will suit the household size and type. If you’re furnishing a five bedroom family home, there’s no use supplying a small, two person dining table in the kitchen or one three person sofa. Providing insufficient or inadequate furnishings will be less appealing to tenants than no furniture at all.
6. Choose the right materials
When choosing fabrics and materials, remember that you’re furnishing a rental property and will need something that will survive use over several tenancies. It might be better for instance to invest in a leather lounge that will stand more spillages and clean easier than a fabric lounge. With whitegoods, choose something that is easy to wash and take care of – if it can only be hand washed or washed using very specific instructions, it’s likely to get ruined or turn the renter off.
7. Consider depreciation for your furnished property
While furniture may seem like a large outright expense, remember that you may be able to claim depreciation* on all of the furnishings in your investment property. You should also consider depreciation when choosing your furniture – certain items or materials may depreciate at a faster rate and give you bigger bang for your buck.
8. If it’s worth doing, do it well
Don’t make your investment property a dumping ground for the old, unwanted furniture in your own home. An imposing, dated, free standing wardrobe that takes up half the bedroom floor space, for instance, will only turn renters away, as will tatty or dated furniture.
Unless you’re going to furnish the property in a way that’s beneficial to tenants, it’s not even worth doing. Understand that furnishing your property correctly can boost your investment’s potential while a half-hearted or substandard job can damage it significantly.
9. Make it homely with accessories
If you’ve decided to fully furnish the property, make it feel like a home and finish the look off with some lamps, artwork and area rugs to liven up the space. If they don’t love the artwork you’ve selected the tenant can always pack it away and place their own piece on the hook throughout their tenancy.
*Under proposed changes to legislation, investors who exchange contracts on a second hand residential property after 7:30pm on 9th May 2017 will no longer be able to claim depreciation on plant and equipment assets. Investors who purchase a new property will be able to continue to claim these items as they were previously. We are currently speaking with government to further understand the intricacies relating to the proposed changes. To learn more visit www.bmtqs.com.au/budget-2017.