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Why Do Furnished Rentals Have Higher Security Deposit Fees?

Furnished rentals are now the order of the day. This comes as no surprise as many people enjoy comfort and convenience and seek it out in their homes. So, if you’re a working professional, a busy student, or you’re just someone striving for a streamlined life, furnished rentals are now a popular choice. However, for landlords, the decision to offer included furnishings isn’t cheap or easy.

As the landlord, renting out furnished rentals means that you have invested significantly in the property’s equipment and furnishings in addition to the real estate itself. Ideally, when tenants know this, they will treat their furnished rental with care. However, you can’t guarantee this for all of them. That’s where increased security deposits come in. Read on as we discuss why higher security deposits are a staple with furnished rentals. Let’s get started!

Pros of Renting a Furnished Rental

1.    Higher Rates

The most obvious benefit of a furnished rental is that you can charge higher rent. People will pay more to move into a fully furnished rental. Tenants will not have to rent a moving truck or purchase their own furniture. They can simply arrive and start using the property. It means they won’t have to transport big stuff, find furniture, or decorate the majority of their own space. Homeowners should hire a property manager in Montgomery County PA, to screen tenants and protect your rental.

If your rental is furnished, you can often increase the rate by 10% to 20% per year. However, it’s important to always do your due diligence before pricing your rental. The last thing you want is to undervalue or overprice your home. The former means leaving money on the table, while the latter may make your home less appealing to potential tenants.

If you’re just starting out as a landlord, employing a reliable property management company to handle the pricing may be preferable.

2.    Higher Security Deposit

You can generally require a higher security deposit in addition to charging a higher rent. That is not simply our viewpoint; in several states, it is the law.

A security deposit protects a landlord against potential financial hardship as a result of tenant damage. Such damage might be caused by nonpayment of rent or significant property damage.

With a furnished rental, you’ll need to cushion yourself more. This means requesting a larger security deposit than you would if leasing out an unfurnished property. Sometimes, renting furnished apartments vs unfurnished apartments can benefit tenants who want to see if renting is for them.

Typically, property owners will demand two months’ rent as a security deposit for a furnished unit. For unfurnished apartments, on the other hand, most landlords may charge only one month’s rent.

3.    Easy Marketing

Marketing a completely furnished property is easy because your home will likely appeal to specific demographics. Because fully furnished apartments are frequently more expensive, your pool of potential renters will be smaller than other landlords’. This makes it easy to focus on specific markets.

Also, a furnished property in certain locations may rent faster since prospective renters do not have to factor in the cost of purchasing the furnishings. They also avoid the headache of transferring any old furniture they may have. This makes your furnished units perfect for first-time renters.

Cons of Renting in a Furnished Rental

1.    Cost

Investing in furniture and equipment involves money, and the expenses can quickly add up. Depending on the size of your unit, you may have to provide several beds, couches, various-sized tables, and lighting. If you haven’t budgeted properly, it can add up rapidly. That is why we recommend creating a realistic budget for a fully furnished apartment.

Not to mention that if your rental includes furniture, you must account for replacement and repair costs. Due to wear and tear, you will undoubtedly need to repair or replace parts of your furniture every few years. Of course, you can always provide a semi-furnished apartment with only the basic necessities. However, the drawback is that you won’t be able to change nearly as much as you would in a fully furnished rental.

2.    Damages

Furnishing an apartment increases the chances of your furniture, bedding, or electronics getting damaged or stolen. Before the tenants move in, take a complete inventory of everything you installed into the unit. When your tenants leave, you’ll be able to ensure that all of your items are in excellent condition.

However, because you can charge a bigger security deposit, if a tenant breaks some furniture in the rental, it is unlikely that you will suffer significant financial consequences. It’s not fun and may take some time to replace the furnishings, but it will not significantly impact your business.

3.    Shorter Leases

Some prospective tenants who desire furnished rental houses do not intend to stay for long; thus, they prefer a location that makes moving and departing as easy as possible.

This, of course, means that your marketing activities will be more effort-intensive. Because furnished leases may last anywhere from 6 to 12 months, the turnover rate is significantly greater. Plus, depending on the length of time a tenant stays, they may begin to ask you to remove part of your furniture. This may end up costing you more in storage expenses than you anticipated.

Why do Furnished Rentals Have a Higher Security Deposit Fee?

Furnished rentals often need a higher security deposit due to the increased risk of damage or wear and tear to the furniture and appliances provided. Because your furnished apartments offer greater amenities, as the landlord, you must protect your investment by requiring a larger deposit.

Furniture can be expensive to repair or replace, and tenants may not be as cautious with items they do not own. The higher deposit helps you cover future expenses while guaranteeing the property remains in good shape throughout the tenancy.


The rationale for higher security deposit fees for furnished rentals stems from landlords’ need to protect their investments. These properties are more susceptible to damage or wear and tear since they include furniture and appliances. Charging a higher deposit helps mitigate this risk by offering landlords financial protection against potential repairs or replacements.

By matching the deposit to the value of the provided facilities, landlords and tenants may ensure a fair and responsible rental experience. Finally, this strategy builds favorable landlord-tenant relationships while also promoting property preservation.

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