Furnished or unfurnished? How to choose the right leasing strategy for your investment.
Teleisha Thomas
February 2025The Victorian Government’s new 7.5% levy is shaking up the short-stay rental market, prompting many providers to rethink their leasing strategies. With this additional cost eroding profits, more property owners are turning to traditional leasing methods for stable, long-term returns.
Nicole Katsivelas, Partner and Head of Property Management at Jellis Craig Inner North said deciding whether to lease your property furnished or unfurnished was a critical investment decision. “It’s about finding the strategy that best aligns with your investment goals,” she said.
So, which option is right for you?
Furnished rentals: Higher returns, longer vacancies
One of the biggest advantages of leasing a furnished property is the potential for premium rental returns - typically 15-20% more per week than an unfurnished home. However, this comes with trade-offs. “Furnished properties tend to have longer vacancy periods due to a smaller tenant pool,” Ms Katsivelas said. “On average, they can sit vacant for 5-8 weeks a year, compared to just 1-3 weeks for an unfurnished property.” Additionally, owners must factor in the cost of maintaining the furnishings. “The condition and style of furnishings matter - outdated or heavily worn furniture can make a property less appealing to renters,” she said. For investors focused on maximising rental income and willing to accept longer vacancy periods, a furnished property can be a strong option.
Timing is everything
Furnished properties tend to appeal to tenants seeking flexibility and convenience, such as students and people relocating from overseas. “Many renters in these groups want shorter leases and don’t want the hassle or expense of furnishing a home," Ms Katsivelas said. However, timing is crucial.
“The best leasing periods align with school and university enrolments when demand is highest.” Outside of these peak times, securing a tenant can be more challenging. To remain competitive, rental providers may need to offer flexible lease terms. "Instead of the standard 12-month lease, consider six- to eight-month options to attract tenants who might otherwise choose short stays," she said.
Unfurnished rentals: Stability and broad market appeal
Unfurnished properties attract a wider range of tenants, reducing the risk of extended vacancies. “Families, professionals, and long-term renters generally prefer unfurnished properties, as they want to personalise the space,” Ms Katsivelas said. “This broad appeal often leads to quicker leasing times.” While rental income may be lower than that of a furnished property, the stability of long-term leases can offset this. Long-term leases also mean less tenant turnover, reducing costs on advertising and property management fees. For investors looking for steady, predictable income with minimal hassle, an unfurnished property offers long-term security.
Making the right choice for your property
Ultimately, the decision between leasing your furnished or unfurnished depends on your investment goals, risk tolerance, and local rental market conditions. For tailored advice on maximising your rental return, speak to a Jellis Craig Property Management specialist today.
