Is It a Good Idea to Furnish an Investment Property?

People usually buy a property for investment with two key reasons: either to rent it out or to sell it later at a higher price. There are pros and cons to furnish an investment property.

Advantages: 1) Tenant and future buyers don’t need to buy their furniture as the furniture and fittings are already available in the property.

2) Tenants look for a furnished property than an unfurnished property. As such, a furnished property may be let out faster.

3) You can deduce a percentage of the cost of furnishings from the tax liability. You may also be able to get some depreciation allowances on the furnishings.

Disadvantages: 1) The rental yield in India for a residential property is, at best, 3-4 per cent. Hence, the cost of furnishings is extremely difficult to recover even with higher rents.

2) A semi-furnished house, on the other hand, with just the basic amenities such as cupboards and kitchen cabinets would be easy on the pockets and useful for tenants