Property managers who look after furnished properties have been reminded that the potentially higher returns come at a cost.
Lauren Robinson of Rental Results told RPM that property managers can charge higher fees for managing furnished properties – however, more maintenance and monitoring is required.
Ms Robinson said property managers must also bear in mind that tenants looking for furnished properties tend to be more transient.
“If tenants want a furnished property, they don’t tend to stay for a couple of years; it’s usually six to 12 months, and then they move on,” she said.
“Obviously the furniture has to be well maintained, so if it’s not clean or well-kept, then it’s not going to be appealing to people.”
According to Ms Robinson, one of the key things property managers must ensure is that furniture inventory is accurate and up to date.
“There is definitely more work involved in renting out a furnished property in terms of entry condition reports and exit condition reports,” she said.
“Also, during the tenancy, it’s just about making sure that those items are maintained and cleaned, especially at the beginning of the tenancy.”
Ms Robinson said that when property managers advise clients about leasing a furnished property, they should consider who the property will appeal to, how much supply is on the market, and be aware of the extra costs that could be associated with maintaining furniture and appliances.
“They also have to consider whether old appliances or furniture need to be replaced before leasing and remember that there’s a smaller percentage of the market looking for furnished property as opposed to unfurnished,” she said.
According to Ms Robinson, furnished properties that remain vacant are often better off being leased as unfurnished.
"In some areas, properties that were unfurnished are achieving the same prices as furnished properties in the current market because of the amount of supply in the market," she said.
[Related: Furnished rentals reap rewards]