Tenants are always leaving things behind when they vacate, but did Jo Leditschke end up with more than she bargained for?
“Seven years ago a tenant in one of my Melbourne properties informed me that they were planning on vacating. As I self-manage my portfolio, this meant a little bit of overall work for me, but obviously it was to be expected.
What I didn’t expect was the request by the tenant to leave the majority of their furniture in the property at the time they moved out. They were heading interstate and leaving their furniture there turned out to be the easiest option for them – but it raised a lot of questions for me.
Sure, receiving a load of free furniture without even being required to relocate it sounds like a fantastic situation. But it had me scratching my head over what it would mean for the way I advertise property, and the type of tenants I would have on my books.
On the other hand, I’d been toying with the idea of furnishing a property, and I’d been curious about the increased returns it may yield. Furnished properties aren’t very common in the Australian market – would furnishing this property allow me to stand out from the crowd?
At that time I was looking hard for ways in which I could increase the cash flow coming from my portfolio, and it seemed like this was too good an opportunity to miss. After all, if it didn’t work out, all I had to do is list the furniture online or take it to a charity store.
I agreed to take on the tenant's furniture at the conclusion of the lease, and seven years later I’ve kept it furnished. In fact, I even decided to furnish a second property of mine.
It’s been successful enough to adopt as a long-term strategy, and I’ve been lucky to secure tenants that are willing to pay more for the convenience of having a house already furnished – but that’s not to say that the strategy is without its downsides.
I’ve found that tenants are almost always after short-term accommodation when looking for a fully furnished property. They may only want to rent the property for three to six months as they are transitional renters – usually professionals either based for work or travellers passing through.
These types of tenants definitely are prepared to pay more for a property, but being such a small proportion of the renting population you need to be careful that the property is not vacant too long between tenants, which could reduce your annual return.
Furniture needs to be upgraded to a good standard on a regular basis as well as be kept modern – which can prove costly. You also need to appeal to the mass markets with the presentation of the property to generate more interest.
If you are fully furnishing a property for travellers there will be ongoing costs buying things like glasses, which may break, or other small items.
Basically, it’s an added stress. It works for me because I self-manage my portfolio, and I can incorporate the added requirements into my routine. But I doubt it would work for someone who engages an agent – too much extra hassle.”