Ready to maximise your rental income? The demand for fully furnished rentals is soaring, and savvy landlords are cashing in. Here’s what you need to know to ride this profitable wave — and make a splash.
Understanding the Trend: Why Fully Furnished Rentals Are in Demand
More tenants are seeking convenience and flexibility, and that’s where fully furnished rentals come in. Fully furnished rentals have transitioned from being a unique niche to becoming mainstream. Why? The gig economy on both sides of the aisle has fueled this trend. Professionals increasingly need flexible, short-term housing, and more rental platforms are meeting this demand.
Whether it’s expatriates, digital nomads, or short-term renters, the desire for ready-to-move-in homes is on the rise. According to a study by Knight Frank, there’s been a 25% increase in demand for fully furnished rentals in urban areas across Southeast Asia, with Singapore leading the charge. Tenants are looking for a turnkey solution that saves time and effort.
The Role of Short-Term Rentals
The popularity of platforms like Airbnb and other short-term rental services has shifted tenant preferences. A report by CBRE revealed that 60% of short-term renters specifically look for fully furnished options, making this a lucrative opportunity for landlords. Fully furnished apartments offer convenience and affordability over hotel rooms, and tenants save on the cost of buying furniture.
Benefits for Landlords Offering Fully Furnished Rentals
Higher Rental Income Potential
One of the biggest advantages of offering fully furnished rentals is the potential for higher rental income. Tenants are willing to pay a premium for a move-in-ready home, especially in competitive markets like Singapore. For example, a report by Savills showed that fully furnished properties in prime locations could command up to 20% more rent compared to unfurnished units.
Some landlords even offer packaged deals that include furniture, utilities, and other essentials, allowing them to charge more.
Shorter Vacancy Periods
A survey by JLL found that fully furnished flats in Singapore experienced vacancy periods 30% shorter than their unfurnished counterparts. Fully furnished rentals attract tenants faster, reducing the time your property sits vacant.
Targeting a Broader Market
By offering a fully furnished rental, you’re opening up your property to a wider audience, including short-term renters, corporate clients, and international students. This broader appeal helps fill vacancies faster and keeps rental income steady.
Better Tenants & Fewer Surprises
Tenants renting fully furnished properties are more likely to take care of them, as they have the financial means to do so. Moreover, offering a packaged deal that includes utilities and other incidentals reduces the risk of tenants leaving unexpected bills behind. Platforms like Airbnb provide additional protection through insurance schemes, minimizing the need for security deposits.
Weighing the Pros and Cons
Initial Investment and Maintenance
Fully furnished rentals offer higher income potential but require significant initial investment. Outfitting a property with quality furniture, appliances, and décor is costly. According to PropertyGuru, the average cost of furnishing a two-bedroom apartment in Singapore can range from SGD 15,000 to SGD 30,000. Higher investment leads to higher appeal, but landlords need to budget carefully.
Increased Wear and Tear
Furnished properties experience more wear and tear due to the additional items tenants can use and potentially damage. A study by the Building and Construction Authority highlighted that the average maintenance cost for fully furnished rentals is 10-15% higher than for unfurnished units. Landlords may need to consider higher security deposits to cover potential damages.
Legal and Tax Implications
In Singapore, offering a fully furnished rental can have legal and tax implications. Landlords must ensure that electrical appliances meet safety standards and comply with regulations. Additionally, rental income from furnished properties may be subject to different tax treatments, making it essential to consult with a property lawyer or tax advisor.
How to Successfully Market Fully Furnished Rentals
Highlighting Key Features in Listings
To attract the right tenants, it’s essential to showcase the unique features of your property in your listings. Use high-quality photos and detailed descriptions highlighting what makes your property special, such as stylish furniture, modern appliances, and convenient amenities.
Pricing Strategies
Pricing your fully furnished rental correctly is key to maximising occupancy while ensuring profitability. Research similar properties in your area and consider additional costs, such as furnishing, maintenance, and higher turnover rates. A tiered pricing strategy can help you attract a diverse range of tenants and keep your property occupied year-round.
Reaching the Right Audience
Effectively marketing your rental means reaching the right audience. Platforms like Airbnb are ideal for short-term renters, while local property portals cater to long-term tenants. Consider promoting your listing through social media channels and working with relocation agents who specialise in placing international clients.
Capitalising on the Demand for Furnished Rentals
The demand for fully furnished rentals in Singapore is growing, offering landlords a unique opportunity to capitalise on this trend. While there are challenges, such as higher maintenance costs and significant upfront investment, the benefits — including higher rental income, shorter vacancy periods, and a broader tenant market — often outweigh the drawbacks.
By understanding the market, preparing your property, and marketing it effectively, you can make your fully furnished rental a profitable venture. So, whether you’re already offering a furnished unit or considering making the switch, now is the time to take advantage of this rising trend.
