A common question we get from property owners moving out of their primary residence to rent it out is whether or not they should rent their property furnished.
And while it may seem like an easy fix to leave all your furnishings in the property and start fresh in your new home, the answer is actually more complicated than that.
In this article, we’re breaking down the pros and cons of furnished and unfurnished rentals and sharing whether or not you should rent a furnished property.
For more information on managing your unfurnished or furnished rental property, reach out to our Good Life Property Management team.
Key Takeaways
- Furnished rentals appeal to a niche market, like business professionals and students, but come with higher turnover and start-up costs.
- Unfurnished rentals attract long-term tenants, experience less wear and tear, and have lower turnover, making them a more stable option.
- Furnishing a property can cost $7,000–$11,000, so it’s only worth it for specific rental markets, like vacation properties or student housing.
- For most property owners, renting unfurnished is simpler, more cost-effective, and appeals to a wider audience.
Table of Contents
- What is a Furnished Rental?
- The Pros of Renting a Furnished Property in Orange County
- The Cons of Renting a Furnished Property in Orange County
- What is an Unfurnished Rental?
- The Pros of Renting an Unfurnished Property in Orange County
- The Cons of Renting an Unfurnished Property in Orange County
- Should You Furnish Your Property?
What is a Furnished Rental?
A furnished rental is a property that includes the essential elements needed for daily living. There are two types of furnished properties: fully furnished and semi-furnished.
A fully-furnished property is often found in the short-term rental or vacation rental market. It includes everything a tenant would need to live comfortably—they could bring their personal belongings, and wouldn’t need anything else. A fully-furnished rental includes:
- Furniture: All rooms in the rental are furnished—generally this includes beds, sofas, chairs, dining tables, desks, dressers, wardrobes, and more.
- Appliances: Essential household appliances, like a refrigerator, washing machine, stove, oven, microwave, kettle, toaster, coffee maker, and television, would be provided.
- Linens: Bedding, towels, and curtains are provided.
- Kitchenware: A fully furnished rental would include pots, pans, dishes, cooking utensils, and cutlery.
- Decor: Fully furnished rentals, especially vacation rentals, are decorated as any home would be. This includes rugs, lamps, and artwork to make the space feel cozy.
A semi-furnished rental hits a sweet spot between fully-furnished and unfurnished rental properties. It provides renters with basic furnishings but won’t be as “move-in ready” as a fully-furnished property. Items like cutlery, linens, and smaller appliances are rarely included in semi-furnished rentals.
Generally, a semi-furnished rental includes:
- Basic furniture: While the furniture included varies, larger items like beds/bed frames, couches, and dining tables are usually included.
- Basic appliances: Smaller appliances like toasters and kettles are not normally included, but you can expect a refrigerator, stove, and oven. Washing machines and dishwashers may also be included but these are seen as additional amenities.
The Pros of Renting a Furnished Property in Orange County
Generally, there are two kinds of furnished rentals:
- Traditional vacation rentals where people rent for periods of 1 day to a couple of weeks.
- Long-term rentals where people rent for periods of 1month to as long as 9 months.
There are pros of renting a furnished property in Orange County. Let’s explore them below.
1. Attract a specific type of tenant
When you have a furnished rental property, you attract a certain type of tenant. Only a small portion of potential tenants are looking for fully- or semi-furnished rentals. If a tenant has their own furniture, they most likely aren’t going to want to move into a rental where they’ll also have to pay for a storage unit.
The demographic includes:
- Business professionals on short-term assignments
- Expatriates
- Frequent travelers
- Students
- Individuals on vacation
For example, a traveling nurse on assignment in Orange County for the next four to five months won’t want to spend that time in a hotel. Instead, they’ll want to look for a full furnished property that allows them the comforts of home without them needing to bring all the essentials.
These renters are looking for convenient solutions that offer them flexibility—and a furnished rental does both those things. Renters only in the area for temporary work or attending a local university recognize the value of moving into a fully furnished home.
Having such a niche target market makes it easier for property owners to market their properties effectively and find renters who are not only a good fit for a furnished rental but also responsible tenants.
2. Maximize rental income
Renters who are looking for a furnished rental property understand that they’ll need to pay a premium for the convenience of having a move-in-ready space. Because renters can easily move in without countless trips to Target, HomeGoods, and IKEA, they’re more open to paying a higher rent.
On average furnished rentals cost between $500-$2,000 more per month than an unfurnished rental. The premium you add would be dependent on the size of the rental, the quality of furnishings, and what furnishings you include in your property.
3. Flexibility
One of the most common reasons we hear why rental property owners opt for a furnished rental is the flexibility that comes with it. Let’s say you want to be able to allow your friends to use your property, or perhaps you plan to stay in the property during the summer months. Having the flexibility to that is one of the biggest attractors for owners.
Especially with the wonderful year-round weather we have in Orange County, having a furnished rental gives you the freedom to use the property as your summer escape while renting it out for the rest of the year.
The Cons of Renting a Furnished Property in Orange County
We covered the pros, but don’t make your decision just yet. Having a furnished property in Orange County comes with challenges.
1. Higher start-up costs
While there are start-up costs associated with furnished and unfurnished properties, furnished rentals come with significantly higher costs.
Furnishings are what will help your listing stand out from the competition. To make an impact and reduce your vacancy rates, you need to invest appropriately in furnishings. While this will add to your start-up costs, it will also help you make more money in the long run.
2. Increased liability insurance costs
As mentioned above, furnished rentals are rented out on shorter terms. Because of this, more people are going in and out of the property at any given time. Therefore, you’re inherently exposing yourself to more risk.
Insurance companies recognize this, and they price their policies accordingly. You’ll be paying more for the appropriate liability and landlord insurance for your property.
Especially in California, it may be difficult to secure a policy for furnished or short-term rentals.
3. Increased tenant turnover
By having shorter rental terms, you will experience increased tenant turnover in a furnished rental property. Let’s say your average tenant stay is 3 months, in a perfect world, that means you’ll have four new tenants each year. If your terms are shorter, you’ll have even more tenants cycling in and out.
This substantially adds to your costs as you’ll need to go through the entire move-out checklist and prep the property for new tenants four or more times a year.
4. More frequent vacancy periods
Because of increased tenant turnover, you will also deal with more frequent vacancy periods. When you factor in the time it takes between tenants to get the property ready and to find new tenants, and multiply that by the number of rentals you have each year, you start to see the time adding up.
While managing the 4% vacancy rate we expect to see in Orange County is difficult enough, your rate could be two, three, or four times higher, depending on the length of each rental.
5. Can be difficult to rent
While furnished rentals do add a lot of convenience, the number of people who are looking for that convenience is a much smaller portion of the overall renter demographic. Most people who are looking for a rental property are hoping to find something long term, and they have their own furniture they want to bring with them.
Beyond that, within the pool of renters looking for a furnished rental, you need to find people who resonate with the style of your rental. If a person has different taste in furniture and art, you may unintentionally exclude them from considering your property.
This is also the reason why you may experience longer vacancy periods—it will objectively take longer to find the right tenant for your furnished rental.
What is an Unfurnished Rental?
An unfurnished rental comes with the bare minimum—a stove and refrigerator are usually included, and maybe a microwave depending on the kitchen. But everything else, from furniture to small appliances, will be supplied by the tenant.
This allows renters to bring their own furniture and decorate their homes according to their taste as well as their needs.
The Pros of Renting an Unfurnished Property in Orange County
Unfurnished rentals present a lot of benefits for rental property owners.
1. Longer occupancy
Unlike furnished rentals, unfurnished rentals tend to attract tenants who are looking for long-term living arrangements. Tenants looking to rent for a minimum of 12 months are much more likely to make the property a home. They bring their own furniture, art, and decor, making the rental reflect their personal style.
When tenants do this, they put roots down, put their kids through the school district, and stay much longer. This results in longer lease terms, which saves you money, gives you stability and reduces tenant turnover.
2. Less wear and tear
If you’re renting an unfurnished rental, you obviously don’t have to worry about the wear and tear on furnishings. You can rest easy knowing you won’t be replacing a couch or rug because of spills, tears, or other common issues.
Beyond that, when tenants rent furnished properties or vacation rentals, they often don’t see it as their home. They are less likely to treat it as such compared to a long term tenant. Tenants may not be as careful and considerate of your property as they would be if they saw the space as their home.
3. Appeal to a wider market
When you rent an unfurnished property, you are appealing to a wider renter market. The majority of renters are looking for unfurnished properties they can make their own because most renters have their own things.
4. Shorter vacancy periods
For all of the reasons listed above, unfurnished rental properties experience shorter, less frequent vacancy periods. It’s simple math—if you have tenants who stay for a minimum of 12 months, you’ll have a maximum of one tenant turnover period per year.
Less vacancy means more rental income for you as the property owner.
5. Streamline the management process
Finding new tenants and getting them into your property is a logistical nightmare. You have to market the property, screen tenants, sign leases, managing move-in/move-out checklists, and more.
While this shouldn’t discourage you from owning a rental property, it may help determine what kind of rental property you own.
With an unfurnished rental, you don’t have to do inventory on furnishings, worry about excessive tenant turnover, or look for new tenants every few months. While it still involves a lot of hands-on work, managing an unfurnished property is more straightforward than handling a furnished one.
The Cons of Renting an Unfurnished Property in Orange County
There are some drawbacks to renting an unfurnished property in Orange County.
1. Lower rental income
An unfurnished property will have lower rent than a furnished property. Because unfurnished properties have longer average tenancies and spend less time on the market, they often still make more rental income per year than furnished properties.
2. Tenants will need to invest in furnishings
With an unfurnished property, tenants will need to invest in furnishings to outfit their rentals. This should be expected for most tenants but for some demographics, like students or those relocating temporarily for work, this might be a drawback.
There is still a wide demographic of renters in Orange County who do not fit into that category.
Should You Furnish Your Property?
When discussed the advantages and disadvantages of both furnished and unfurnished rental properties. While every property owner needs to make their own choice, under normal circumstances, most people will benefit more from renting an unfurnished, long-term property. For most property owners, the pros outweigh the cons.
There are some cases when a furnished rental property makes the most sense:
- If you want to create a vacation rental.
- If there is a specialty property nearby, like a military base or hospital.
- If you are creating student housing near a college campus.
We’re Here to Help Manage Your Unfurnished Rental Property
At Good Life Property Management, we believe life should be enjoyed, not spent sweating the small stuff. That’s why we set out to make property management easy. We care about you, your property, and your tenant. And we do it all so you can Live the Good Life.
Schedule a call to speak with one of our Good Life experts.
Furnished versus Unfurnished Rental Properties FAQs
Is it worth furnishing a rental?
Furnishing a one-bedroom apartment with high-quality furniture costs between $7,000 and $11,000. While you can furnish an apartment for less, if you’re renting out a furnished property, it’s important for the furnishings to be high-quality in order to secure tenants.
What is a good budget for furnishing an apartment?
The cost of furnishing a one-bedroom apartment with high-quality furniture is between $7,000 and $11,000. While you can furnish an apartment for less, if you’re renting out a furnished property, it’s important for the furnishings to be high-quality in order to secure tenants.
What does it mean to a tenant when a rental is unfurnished?
A lot of tenants are specifically looking for unfurnished rentals because they have their own furniture that they would like to bring with them when they move in. Unfurnished properties tend to have longer tenancies, as people put down roots when they make their rentals feel like home.
Steve Welty
Subscribe to Our Orange County Landlord Newsletter
Get in touch with us:
Orange County Property Management Blogs
Free Rent Invoice Template for Landlords
If you have a rental property, rent invoices should be a part of your payment process. Get our free rent invoice template and learn how to use it effectively.
12 Best OC Neighborhoods for Property Investment
Planning to purchase an investment property in Orange County? These 12 neighborhoods are in-demand and offer a high return on investment.
How to Prepare Your Orange County Rental Property for Renters
What do you need to do to get your Orange County rental property renter-ready? We’re sharing the 11 steps you need to take before leasing to new tenants.
