Many people actually prefer furnished apartments as they offer some distinctive advantages including better return on investment and better tenants. But before you decide if a furnished apartment is the best investment decision, you should be aware of your target market, the demand for this type of rental apartment, as well as the location of your property, since these are very important things to consider.
Furnished apartments actually attract contract professionals and vacationing families. It is important to stress that location plays a critical role in your long-term success. Another key thing to consider is the size of your property. If you plan to attract contract workers, you should have a smaller property. Conversely, vacationing families prefer multi-story properties.
Additionally, furnished properties offer higher returns compared to unfurnished properties. The main reason behind this is that tenants are more than willing to pay more for convenience. Also, short-term leases are (most of the time) not covered by traditional leases and the regulations that apply to longer leases.
Many real estate investors also prefer to invest in furnished apartments, since they are often rented for shorter periods. As a landlord, this gives you a lot of flexibility. This has a clear advantage if you are interested in using your apartment for vacations or other purposes. Furnished apartments also tend to attract better renters. This is very likely if you own a property in the center of the city and professionals acquire as tenants. These tenants are less likely to damage your property.
And because your tenants don’t need to furnish the property or bring in any large furniture, they’re less likely to damage the walls of your property. But along with the pros, potential investors should also be aware of the cons of furnished apartments. Furnishing an apartment means that you will have to invest a considerable amount of money from the beginning. And that investment will not be a one-time thing. Over time, some parts within the apartment may need to be replaced.
Lastly, furnished apartments have a higher turnover rate influenced by different market forces such as weather and season, holidays, currency exchange rates, and others. That means you’ll have your hands full looking for new tenants. Not all renters look for furnished properties, as many have possessions they want to take with them. Keep in mind that your target market with a furnished space may be considerably smaller. So if you want to start your own real estate investment, going for furnished apartments is a smart choice.