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Ask Eli: Renting Your Apartment Furnished vs. Unfurnished

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: I will be renting my condo when I move and don’t need my furniture. Should I rent my apartment furnished, partially furnished, or unfurnished?

Answer: I get this question a lot and it’s common for landlords, especially new ones, to struggle with this decision. There’s not one right answer, rather a few good options, each with its own pros and cons that you should choose from based on your financial goals and what type of landlord you want to be. I’ll go through a few, but you can mix and match strategies to fit your goals. DO NOT furnish anything you want to keep long-term (e.g. family heirlooms).

1. Quick rent, flexibility: Offer unfurnished at market rate and include a comment that it can also be rented furnished for a 10-25% premium (depending on quality and extent of furnishings).

Be willing to negotiate for partially furnished because somebody may have a sofa and bed, but want your coffee table, dressers and silverware.

The value of furnished vs. unfurnished depends on the type of tenant likely to move in. For example, a recent college grad will value avoiding the expense of buying/moving furniture, but a young family likely has everything they need and wants to keep most/all of it.

  • Pros: largest pool of renters; best chance to rent quickly; more likely to find a long-term tenant (24+ months)
  • Cons: high chance of having to quickly sell-off unwanted furniture at a deep discount or pay to store it; can take a long time to find a tenant who will pay a premium for a furnished apartment for 12+ months

2. Top $, unpredictable: Target the corporate rental market by offering short-term (monthly) rentals at a premium (50+% above market).

  • Pros: great returns when occupied; low probability of late or non-payment; lower risk of excessive wear & tear during occupancy; may find long-term corporate client
  • Cons: high turnover; unpredictable cash flow due to more vacancy days; high cost of renting (prepping for new tenant to include cleaning service and possibly handyman); smaller pool of potential renters

3. Daily rental, active management: The extreme version of #2. Use a site like AirBnB or VRBO to capture the massive tourism and business traveler market by turning your apartment into a daily rental. I’ll leave income fluctuation/predictability out of the pro & con list because ratings, pricing, marketing, and experience because they’ll likely start as a negative and develop into a positive, over time.

If you aren’t living in the immediate area, this becomes a less appealing option.

  • Pros: potential for huge return; opportunity to meet interesting people and be a local tour guide
  • Cons: requires constant attention/management; high cost of operation; increased wear & tear; Arlington County requires owners to occupy the dwelling for 185+ days per year

A few notes to help with your decision:

  • Fully Furnished = everything from couches to silverware to a TV
  • Property Managers handle things like rent collection, service/handy calls, and the eviction process if necessary. On average, they charge 6-10% of the rental income for their services.
  • If you choose to list through a Realtor, expect to pay anywhere from 75-100% of one month’s rent, but make sure you’re getting things like a full MLS/MRIS listing with professional photos

Our team also handles rentals so if you are thinking about renting a property you own or would like help finding an investment property to rent, feel free to send me an email at [email protected] to find out how we can help.

If you’d like a question answered in my weekly column, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.