Why Property Investors Should Not Buy Furniture?
Because you are investing in properties, not the furniture.
That’s the simple answer. Here comes the longer one.
Reason #1 – Staying Flexible Between Furnished / Unfurnished
Generally, a furnished property would be more attractive to potential tenants than unfurnished ones. However, furnishing an entire unit of property is not cheap. Once you furnished your property with purchased furniture, you certainly hope the furniture can be used for a long long time. So you are “locked in” with the property being “furnished”. What if a tenant with a very suitable profile turns up and simply request for an unfurnished house because he/she will bring his/her own furniture? In a slow market like this, you need the flexibility to give tenants what you want.
Reason #2 – Tenants Change. But You Don’t Want to Keep Changing Your Furniture.
Different tenants certainly have different needs. Imagine your house previously have 2 queen size beds and now the new tenant is requesting for two single beds instead. You then face the problem of disposing or storing the old furniture, as well as having to purchase new furniture again. All these are hassles. You have worked so hard to become a landlord. Your job is to collect rent, not the hassles.
Reason #3 – Buying Takes Up Large Amount of Initial Capital
You have got a great condo in the central region for rent. You would not go with cheap furniture. So furnishing an full house could take up a large sum of initial capital. As a savvy investor, you probably have a better way to make this money work harder, instead of “investing” into the furniture.
So the next time you or your clients are thinking of buying furniture for rental properties, think again.
Buying might not be the best option, and certainly not the only option now.