Furnishing Your Investment Home
Furnishing an investment home can be worthwhile
There are ample benefits in providing extra furniture items to your tenants when renting out your investment home. For those who own at least one holiday rental, providing extra furniture items to your tenants such as beds, sheets, towels and plasma TV's to name is absolutely necessary. There are three main benefits from the writers experience in partially furnishing or full furnishing an investment home. Herein, I'll cover the drawbacks and then the benefits.
Firstly, the drawbacks
of providing extra furniture items to your tenants:
1. They could trash it
Not every tenant loves artworks for instance. Think about it.
Yes, this is highly likely to happen. This is why you also carry landlords insurance against this. This is why some landlords provide cheap furniture like IKEA to their tenants, depending on the location of the investment home in question.
2. They won't want/like/use it
There is a high chance that the tenants won't want some or all of the furniture items you provide to them in their home that they're renting from you. They could easily put it in storage. The latter is not much of an issue with holiday rentals.
3. What if that washing machine breaks down?
If this baby breaks down, guess who is responsible for repairing it
Yakes. If the washing machine in question belongs to the tenant (true in nearly all cases), it is their responsibility to fix it if it breaks down. On the other hand, if you're providing it to them in your investment home instead, the onus is on you to foot the repair bill if it breaks down - whether intentionally on the tenants behalf or otherwise. On the good side, the repair of such an asset is a tax deduction for you, although the lesser the expenses involved in running an investment home the better.
All is still good. Now it is my turn to put a smile back on your face. Now to the benefits
of providing extra furniture items to your tenants in your investment home/s.
1. Attract higher rent
Beautiful rugs counts as extra furniture items provided to your tenants too
You have the right to ask for higher rent if your investment home is rented out fully or partially furnished. Why? Your house is more valuable, and you're saving your tenant some money in purchasing their own furniture items. Such allowances are beautiful for busy executives and expats. Perfect for those who are re-locating to a new city. In such circumstances, your tenants will gladly pay the higher rent in exchange for this awesome convenience. This saves them immense time in furniture shopping, as well as waiting around for their furniture items to be delivered and/or assembled.
2. Attract better quality tenants
Blinds dont count. Yet if such assets are also in a great condition, your tenants usually treat such assets in your investment home the same way.
You will attract tenants who appreciate the convenience and tasteful furnishings in your investment home. Your tenants have a ready to move into home, and that way they will be able to call their rental home "home sweet home" sooner rather than later. Again, the tenants who want and need to live in a fully furnished home in particular are busy professionals who work long hours.
3. More Depreciation to claim
Essential for holidays, and yes these items are depreciable, and straight away too.
Furniture is a depreciating asset, no different to any other asset in an investment home. In addition to claiming depreciation on the building and/or common areas (if applicable) in tandem with standard fixed assets; you will also be able to put more cash back in your pocket from the furniture being leased out. Ensure you keep the receipts. This will save you time and money in getting your furniture depreciated. Quantity Surveyors such as Depreciator
send you a furniture inventory template to fill out, to provide the costs of the beds, sheets and towels (to name) that you provide to your tenants. Many furniture items valued at under $300 such as kettles and cutlery get written off in the first full financial year of your Tax Depreciation Schedule.
Not claimable under depreciation, yet still an extra furniture item nonetheless.
Remember, your property manager (if you choose to employ the services of such) in managing your investment home/s will want an inventory list for their personal files, and to give to your tenants for their records. This ensures that furniture items do not disappear, and that if the tenant/s break and/or damage any of the extra furniture items you provide them; the value will come out of their bond. This is why it is also critical to keep the receipts for this purpose.
Happy furnishing your investment home.
241987 - 2023-07-18 05:32:47