The Pros and Cons of Furnished Rentals: Is It Worth the Investment?

By PropsManager Team · Leasing & Marketing · Dec 11, 2024

I remember the first time I furnished a rental unit. I'd just closed on a one-bedroom condo near a medical center in Houston, and a buddy told me, "Throw some furniture in there and you'll get travel nurses paying $1,800 a month instead of $1,200." So I spent a Saturday at IKEA, dropped about $3,500 on furniture and housewares, and listed it on Furnished Finder and Zillow.

He was right. Within a week, I had a 13-week booking from a travel nurse at $1,750 per month. That's $550 more per month than comparable unfurnished units in the same complex. Over a year, that's an extra $6,600 in gross revenue — nearly double what I'd spent on furniture.

But here's the thing: that story doesn't always play out so neatly. The following year, I furnished a unit in a quiet suburban neighborhood about 30 minutes outside the city. It sat vacant for six weeks because families in that area had their own couches and dining sets. I ended up pulling the furniture out, renting it unfurnished, and eating the cost.

The point? Furnished rentals aren't universally good or bad. They're a strategy — and like any strategy, they work brilliantly in the right context and fall flat in the wrong one. Let's break down the real pros and cons so you can make an informed decision for your portfolio.

Why Furnished Rentals Are Booming

The furnished rental market has exploded in recent years. According to a 2023 report from ApartmentList, demand for furnished apartments increased by over 40% between 2019 and 2023, driven largely by remote workers, corporate relocations, and the growing gig economy. Platforms like Furnished Finder, Airbnb (for medium-term stays), and Corporate Housing by Owner have made it easier than ever to connect with tenants who need turnkey housing.

Travel nursing alone is a $15 billion industry, and roughly 1.7 million travel healthcare workers in the U.S. need furnished housing for assignments lasting 8 to 26 weeks. That's a massive, recurring demand pool.

But demand varies wildly by location, and that's where landlords get tripped up.

The Pros of Furnished Rentals

1. Significantly Higher Rental Income

This is the big one. Furnished units typically command 20% to 50% more rent than their unfurnished counterparts. In high-demand markets, the premium can be even steeper.

Here's a quick comparison I put together based on my own units and market data:

Even accounting for higher turnover and vacancy, furnished units often generate $3,000 to $7,000 more annually in gross rent. That furnishing investment can pay for itself within the first year.

2. Access to High-Quality, Low-Risk Tenants

Travel nurses, corporate transferees, and graduate students on stipends tend to be excellent tenants. They've usually been vetted by their employers or agencies. They're in town temporarily for work or education, which means they have income, references, and a professional reason to keep the place in good shape.

I've found that my furnished tenants file fewer maintenance requests than my long-term unfurnished tenants. They're there to work, not to redecorate. They don't drill holes for shelving or try to install their own ceiling fans. They use what's there and move on.

3. Reduced Move-In and Move-Out Damage

This one surprises people, but think about it. The biggest damage during turnovers comes from moving heavy furniture in and out — scraped walls, dented door frames, scratched hardwood floors, damaged stair railings. When the furniture stays in place, that damage simply doesn't happen.

I once had an unfurnished tenant move a sectional sofa up a narrow stairway and gouge a three-foot scratch into fresh drywall. Cost me $280 to repair and repaint. In my furnished units, the sofa's already there. Nobody's dragging anything up the stairs.

4. Tax Deductions on Furniture and Depreciation

Here's a benefit a lot of landlords overlook. Furniture placed in a rental property is a depreciable asset. Under IRS guidelines, you can depreciate furniture over 5 to 7 years using MACRS (Modified Accelerated Cost Recovery System). Or, if your total furniture purchase is under $1,160,000 (the 2023 Section 179 limit), you can often deduct the entire cost in the year you buy it.

A $5,000 furniture package deducted in Year 1 can save you $1,000 to $1,500 in taxes depending on your bracket. That significantly reduces your effective out-of-pocket cost.

5. Flexibility to Pivot Between Strategies

When you own the furniture, you've got options. You can list the unit as a medium-term furnished rental during high-demand seasons (say, September through May near a university) and then switch to a short-term vacation rental during summer — or vice versa. You can even pull the furniture and go unfurnished if the market shifts.

That flexibility is valuable. Unfurnished landlords are locked into one play. Furnished landlords can adapt.

The Cons of Furnished Rentals

1. Significant Upfront Investment

Let's talk real numbers. Furnishing a one-bedroom apartment properly — not just tossing in a mattress and a folding chair, but creating a space that photographs well and justifies premium rent — typically costs:

• Budget tier (IKEA/Wayfair basics): $2,500–$4,000
• Mid-range (durable, attractive pieces): $4,000–$7,000
• Premium (high-end corporate housing): $7,000–$12,000+

For a two-bedroom unit, multiply those numbers by roughly 1.5x. A fully furnished two-bedroom with quality pieces can easily run $8,000 to $10,000.

That's real money. If you're financing properties with thin margins, that outlay can sting — especially if it takes a few months to land your first furnished tenant.

2. Furniture Maintenance and Replacement Costs

Furniture wears out. Period. Even with careful tenants, you're looking at replacing or repairing items regularly:

• Mattresses: Replace every 3–5 years ($300–$800)
• Sofas: Replace every 4–6 years ($400–$1,200)
• Dining chairs: Ongoing repairs, wobbly legs, stained seats ($50–$150 each)
• Small appliances (coffee maker, microwave, toaster): Replace every 2–3 years ($100–$300 total)
• Linens and towels: Replace between every tenant or every 6 months ($100–$200)

Budget $500 to $1,500 per year for furniture maintenance and replacement. It's not devastating, but it's a line item that unfurnished landlords don't deal with.

3. Higher Tenant Turnover

Furnished rentals attract short-term tenants by nature. Where an unfurnished tenant might sign a 12-month lease and renew for two or three years, furnished tenants typically stay 3 to 6 months. Some stay just 8 to 13 weeks.

Higher turnover means more work per unit:

• More listings to manage
• More showings or inquiries to handle
• More cleaning between tenants (furnished turnovers are more intensive)
• More move-in/move-out inspections
• More lease agreements to process

If you're self-managing, this can eat into your time fast. Even with a property management platform like PropsManager, which automates lease generation, tenant screening, and maintenance tracking, you're still dealing with the physical turnover logistics.

4. More Complex Inventory Management

Every item in a furnished unit needs to be documented. You need a detailed inventory checklist — ideally with photos — that tenants sign at move-in and move-out. If a tenant breaks a lamp, stains the couch, or walks off with the silverware set, you need documentation to justify security deposit deductions.

This isn't rocket science, but it's tedious. A standard unfurnished unit has maybe 15 to 20 items on a condition report. A furnished unit? You're tracking 50 to 100+ individual items. Bed frame, mattress, pillows, sheets, comforter, nightstand, dresser, desk, desk chair, sofa, coffee table, end tables, TV, TV stand, dining table, dining chairs, plates, bowls, cups, utensils, pots, pans — the list goes on.

Using PropsManager's inspection and documentation tools makes this manageable. You can photograph everything, attach it to the lease, and store it digitally. But if you're doing this with a clipboard and a filing cabinet, good luck.

5. Liability and Insurance Considerations

Your landlord insurance policy may need to be adjusted for furnished units. Standard policies typically cover the building structure and your personal liability, but the furniture inside may not be automatically covered. You might need an endorsement or a separate inland marine policy to protect your furnishings against theft, fire, water damage, or tenant negligence.

Expect to pay an additional $150 to $400 per year for adequate furnishing coverage, depending on the value of the items and your insurer.

Also consider liability. If a guest injures themselves on a piece of furniture you own — say, a bookshelf tips over or a bed frame collapses — that's on you as the landlord, not the tenant. Secure heavy items to walls where possible and choose sturdy, commercial-grade furniture over cheap flat-pack options when you can.

Furnished Rental Checklist: What Every Unit Needs

If you decide to go furnished, here's the baseline checklist that's served me well over the years:

Bedroom:

• Bed frame and mattress (queen minimum)
• Two pillows with protectors
• Sheet set and comforter
• Nightstand with lamp
• Dresser with at least 4 drawers
• Hangers in closet (20+)

Living Room:

• Sofa (sleeper sofa earns bonus points)
• Coffee table
• TV (40"+ smart TV) with streaming capability
• End table with lamp
• Curtains or blinds

Kitchen:

• Dishes, bowls, cups (service for 4)
• Flatware set (service for 4)
• Basic pots and pans (3-piece minimum)
• Cooking utensils (spatula, tongs, wooden spoon)
• Coffee maker
• Toaster
• Dish towels and drying rack

Bathroom:

• Towel sets (2 per bathroom)
• Shower curtain and rings
• Bath mat
• Toilet brush and plunger
• Wastebasket

General:

• Wi-Fi router and internet setup
• Iron and ironing board
• Vacuum or broom/dustpan
• Basic cleaning supplies for first week

Skip the knick-knacks and decorative pillows. They get ruined, stolen, or thrown in a closet. Keep it clean, functional, and durable.

Who Should Furnish Their Rentals?

Not every property is a candidate. Here's how to figure out if furnished makes sense for you.

Furnish If...

• You're near a hospital or medical campus. Travel nurses and medical professionals are the bread and butter of the furnished rental market. A unit within 10 miles of a major medical center is practically printing money as a furnished rental.
• You're near a university. Graduate students, visiting professors, and international students often need furnished housing for a semester or a year.
• You're in a corporate relocation market. Cities with major employers who frequently transfer employees — think Austin, Raleigh, Nashville, Denver — have strong demand for furnished corporate housing.
• You're in a tourist-adjacent area. Even if you're not doing nightly vacation rentals, a furnished unit near tourist activity can attract medium-term "snowbird" tenants or seasonal workers.
• You have a studio or one-bedroom. Smaller units are cheaper to furnish, easier to turn over, and more likely to attract the solo professionals and students who want furnished housing.

Don't Furnish If...

• You're in a standard suburban neighborhood. Families renting 3-bedroom houses almost always have their own furniture. You'd be spending money to furnish a place for tenants who don't want or need your stuff.
• You can't handle higher turnover. If you're a passive landlord who wants to sign a lease and forget about it for a year, furnished rentals aren't your game.
• Your margins are already thin. The upfront cost needs to be absorbed, and if you're barely cash-flowing as it is, adding $5,000 in furniture costs might not pencil out.
• Local regulations restrict short stays. Some cities have minimum lease length requirements or require special permits for stays under 30 days. Check your local ordinances before committing.

How to Maximize ROI on Furnished Rentals

After managing furnished units for several years, here are the strategies that have actually moved the needle:

Buy durable, not fancy. That $200 IKEA MALM bed frame has survived four tenants in my one-bedroom and still looks fine. The $800 "luxury" sofa I bought for another unit was trashed in two years. Commercial-grade, simple designs outlast trendy pieces every time.

Photograph everything. Before every tenant moves in, do a full photo walkthrough. Every room, every piece of furniture, every appliance. Store it in your property management software so there's zero ambiguity during move-out.

Price competitively, not greedily. A furnished premium of 30% over unfurnished market rate is usually the sweet spot. Push it to 50%+ and you'll sit vacant for weeks. Better to be occupied at $1,650 than empty at $1,900.

Offer flexible lease terms. The magic of furnished rentals is flexibility. Offer 3-month, 6-month, and month-to-month options at different price points. Month-to-month at a premium, longer terms at a discount. This casts the widest net.

Partner with local employers and agencies. Reach out to hospital staffing agencies, university housing offices, and corporate relocation firms in your area. One relationship with a travel nurse agency can keep your unit booked year-round.

Tracking Your Furnished Rental Finances

Here's something that trips up a lot of landlords: they don't track furnished rental expenses separately from their standard rental expenses. Big mistake. You need to know your true cost per turnover, your annualized furniture depreciation, and your net premium over unfurnished rates.

A platform like PropsManager helps you track income, expenses, and maintenance costs per unit so you can see exactly what your furnished strategy is earning — or costing — you. When tax season rolls around, you'll have clean records for your depreciation deductions and expense write-offs.

Without good tracking, you might think you're making an extra $500 a month when you're really only netting $150 after replacement costs, cleaning fees, and vacancy gaps. The numbers don't lie, but only if you're actually looking at them.

Explore More PropsManager Resources

Looking for the right property management software? Check out our in-depth guides:

• Compare Property Management Software — See how PropsManager stacks up against Buildium, AppFolio, Rent Manager, and Propertyware.
• Software for Small Landlords — Built for landlords managing 1–50 units without the enterprise price tag.
• AI-Powered Property Management — Discover how automation can save you 5–10 hours per week.
• Solutions for Property Managers — Scale from 50 to 500+ units without scaling your costs.

Frequently Asked Questions

How much more rent can I charge for a furnished rental?

Most landlords see a 20% to 50% premium over comparable unfurnished units in the same area. The exact amount depends on your market, the quality of furnishings, and the target tenant pool. In high-demand areas near hospitals or universities, premiums can reach 40% to 50%. In less targeted markets, expect closer to 15% to 25%. For a unit that would rent unfurnished at $1,300, that translates to roughly $1,560 to $1,950 per month furnished.

How much does it cost to furnish a rental property?

For a basic one-bedroom setup with functional, durable pieces, expect to spend $2,500 to $4,000. A mid-range package with better aesthetics and durability runs $4,000 to $7,000. Two-bedroom units cost roughly 1.5x those figures. You can reduce upfront costs by shopping estate sales, Facebook Marketplace, and end-of-season clearance events. Just avoid anything visibly used or stained — furnished tenants expect clean, presentable interiors.

What type of tenants rent furnished apartments?

The primary demographics are travel nurses and healthcare professionals (typically 8–26 week assignments), corporate transferees and remote workers on temporary relocation, graduate students and visiting academics, military personnel on temporary duty, and individuals in transitional situations like divorce or home renovation. These tenants are often pre-screened by employers or agencies, which can reduce your tenant screening burden.

Should I use a furnished rental platform or list on my own?

Both have merit. Platforms like Furnished Finder, Airbnb (30+ day stays), and Corporate Housing by Owner give you access to targeted audiences, but they charge listing fees or commissions (typically 5% to 15%). Listing on your own through Zillow, Craigslist, or your own website avoids those fees but requires more marketing effort. Many successful furnished landlords do both — platform listings for visibility and direct outreach to staffing agencies for repeat bookings.

Is furnished rental income taxed differently than unfurnished?

No, furnished rental income is taxed as ordinary rental income. However, you get additional deduction opportunities. Furniture is depreciable over 5 to 7 years under MACRS, or you can take a full Section 179 deduction in the year of purchase. Replacement items, cleaning supplies, linens, and other furnishing-related expenses are deductible as ordinary business expenses. Consult your tax advisor for specifics, but the deductions often offset a significant portion of your furnishing costs.

Make the Right Call for Your Portfolio

Furnished rentals aren't a magic bullet, and they're not a money pit either. They're a tool. Used in the right market, with the right tenants and the right systems in place, they can meaningfully boost your rental income and give you a competitive edge over unfurnished listings down the street.

The key is doing your homework. Research your local demand. Run the numbers — actual numbers, not wishful thinking. Factor in the full cost of furnishings, replacements, higher turnover, and insurance. And then make a decision based on data, not a hunch from some guy at a real estate meetup.

If you're ready to streamline your furnished rental operations — from automated lease generation and tenant screening to detailed unit-level financial tracking — check out PropsManager's features or request a personalized demo. We built the platform specifically for landlords who want to spend less time on paperwork and more time scaling their portfolio.

And if you're exploring other ways to maximize your rental income, take a look at our guides on short-term vs. long-term rentals, handling lease renewals and negotiations, and creating a welcome package for new tenants.