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Should I furnish my buy-to-let?

 
 
 
 
  15 Aug 2019

One of the many dilemmas faced by landlords is whether to furnish a rental property. It is important to remember there is no right or wrong choice here – it is what works best for you and the type of tenant you are hoping to attract. Here are some considerations that should help you make a decision but for more in-depth, personalised advice, contact Jezzards.

Is there an audience for furnished properties?

A furnished let is ideal if your property will attract more mobile tenants, such as young adults leaving their parental home or students. First-time tenants will appreciate not having the expenditure and hassle of purchasing furniture, and as it may be a short-term let, the ease of simply moving out without the concern of furniture is appealing.

If you’re aiming for the professional relocation market, a furnished let can also hit the right note as contractors often travel light and move often.

Are there any tax perks attached to renting a furnished property?

Here’s where landlords may need some clarification. Before 2016, there was a blanket 10% wear and tear allowance applicable across the contents of a furnished property, whether or not an item was actually replaced or repaired.

Today, landlords need to abide by the Replacement Relief rules and these apply to all rental properties – furnished, part furnished and unfurnished – but only when an item is physically replaced. It’s worth noting that Replacement Relief isn’t applicable when items are supplied for the first time – the clue is in the name ‘replacement’.

Replacement Relief permits landlords to offset the cost of replacing moveable assets when filing their tax return. If landlords replace an older item with a new one that provides an improvement, the cost of the replacement is capped at the cost of a modern equivalent. This covers replacing old technology with cheaper, new technology. Landlords can also claim for disposing of old items, removal costs and the installation of a new item.

You may have heard about different rule for holiday lets. These have remained unchanged and landlords of furnished holiday lets still have capital allowances available to them.

What are ‘moveable assets’?

Although not an exhaustive list, moveable assets includes large items furniture (beds, sofas, wardrobes etc) that are not fitted and can be easily moved; stand alone appliances (fridge freezers, TVs, washing machines etc); carpets and floor coverings; soft furnishings; cutlery and crockery, and chairs, tables and shelving.

Is there a halfway house?

There is such a thing as a part-furnished buy-to-let and these are becoming more popular. There is no strict definition as to what needs to be included but landlords might consider providing sofas, beds, wardrobes and a dining set, but leave tenants to bring their own soft furnishings, crockery, cutlery and occasional items, such as coffee tables and bedside cabinets.

Important aspects when furnishing a buy-to-let:

  • Ensure you have landlord-specific insurance that covers any moveable assets that you provide at the start of the tenancy
  • Commission an inventory with photographic evidence at the check in point to accurately record the condition of any items left inside
  • Make sure items comply with fire regulations, have a gas safety certificate or have been subjected to electrical appliance testing

If you’re still undecided about whether to offer a property on a furnished basis – and for the latest on the appetite for furnished properties where your buy-to-let is located – contact Jezzards today.


Author

Jezzards Estate Agents



 

 

Jezzards properties Hampton

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