Sydney investors are now adopting new tactics to entice tenants into their properties, according to Drew Schofield, Raine & Horne Mosman's senior property manager.
“Around 25 percent of our currently available properties in Mosman, Balmoral and Neutral Bay are now fully-furnished, whereas twelve months ago, virtually not a single property came with furnishings, so this is a major change in the mindsets of landlords with assets on the Lower North Shore,” said Schofield. “We believe that more yield-hungry landlords are increasingly choosing to let out their investment properties fully-furnished in the hope of beefing up their returns.”
According to Raine & Horne Mosman’s research, a two-bedroom apartment in Mosman, which is currently selling for $900,000, will rent for $750 a week if it’s unfurnished. However, adding furniture will see the same apartment rent for $900 a week. This represents a gross yield of 5.2 percent compared to only 4.3 percent for an unfurnished apartment.
Schofield advises owners to do some research before offering fully-furnished apartments to the market on a lease of six months or more, because they need to consider wear and tear on the furniture and also the added costs of producing a fully-itemised inventory report and additional fees for property managers to inspect a property more regularly. Other costs involved in maintaining a fully-furnished investment property include additional contents insurance, which is an additional charge to landlord insurance.
A fully-furnished two bedroom apartment with views of Sydney Harbour can rent for as much as $1,700 a week on a short term lease in the summer months, says Schofield.