The Cost Difference between Furnished and Unfurnished ApartmentsJuly 9th, 2010 by Staff Writer
Unfurnished apartments comprise the majority of the apartments on the market, but it is possible to find furnished apartments. Furnished apartments, however, cost more than unfurnished ones for several different reasons.
Investment in the Furnishings
Offering a furnished apartment requires that the landlord have purchased furniture, dishes and other items to put into the residence. This means that the landlord will have expended funds to outfit an apartment for a tenant. To recover this cost and to protect himself should items need repair or replacement in the future, the landlord will increase the rent. Typically, this cost will be divided equally over the length of the lease.
The Likelihood of Short Term Rentals
Furnished apartments are often rented short term, typically no more than six or nine months. This is because a resident intending to live in the apartment longer will want to use his belongings to outfit the space. Short term leases are more expensive than long term leases, usually by at least $200.00. This extra cost derives from needing to clean, repair, list and release the apartment more frequently than in a yearly lease, the typical lease length.
Protection against Depreciation or Repairs
Despite your dedication to maintaining the furnishings provided by a landlord, not all tenants will behave the same way. This means that, potentially, a landlord could be faced with damaged or broken furniture needing repair or replacement at the end of a lease. To maintain his investment in the furniture and continue renting the apartment with furnishings, the landlord must charge more in rent.
Inclusion of Utility Costs
Many times, in short term, furnished rentals, utilities will be included in the rent. Rather than require the tenant to set up and maintain individual utility accounts only for a few months, the landlord will create the accounts under his name and estimate the amount of the tenant’s usage of each utility. This estimation will then be passed along to the tenant in the amount of rent charged. Note that this is not universally true and may not include all utilities but just the basics such as water, electricity and gas, if any.
It is unusual for a furnished apartment to be found in a smaller apartment complex. Usually, furnished apartments are located in multi-story buildings or large apartment complexes because the management companies for these structures are able to better shoulder the expense of purchasing or renting the furniture to create a furnished apartment. These larger buildings will have more amenities and possibly be more like a hotel than an apartment complex. Concierge, dry cleaning delivery and other amenities are a few examples of what these larger buildings may offer. Covering the cost of these additional amenities will be passed on to tenants.
Additionally, such larger management companies generally charge higher rents than smaller buildings or complexes. Because they offer more amenities and on-site maintenance and other caretakers, these buildings charge more. Furthermore, they are less likely to be willing to negotiate, since demand for such apartments remains relatively steady given the ease of finding the building and the company’s reputation.