A PropTech platform claims landlords can cut administration costs so much that they could afford to offer their lettings units furnished - securing much higher rent in return.
A recent survey by portal OnTheMarket suggests furnished properties earn 21 per cent more in rent; separately, a joint report by Reapit and Dataloft says tenants are willing to pay a premium of 10 to 16 per cent for a two-bedroom furnished flat.
Now PropTech platform RentalStep says savings on admin costs can free funds for landlords keen to provide furnished accommodation instead of unfurnished.
“Achieving the furnished look can prove to be costly. One way of offsetting this extra outlay and ensuring you can provide furnished homes – which will in turn earn you more rent – is to reduce your admin costs by using the best partners or suppliers” according to Mike Georgeson, founder and chief executive of RentalStep.
“We believe that referencing and tenancy agreements should be free. Our partnership with credit check website Experian enables us to absorb the cost of credit checks, while our landlord and employer references are automated and therefore don’t require a charge either. What’s more, we use digitised Assured Shorthold Tenancy Agreements – meaning, once more, no costs involved” adds Georgeson.
“By saving on admin costs, landlords will have more spare cash to furnish their properties and earn more in rent. Given the uplift in rents that a furnished property can bring, it’s certainly in a landlord’s interest to consider this way of letting.”
The Reapit/Dataloft report shows that 75 per cent of properties outside of London are unfurnished while only 25 per cent include furniture.
It’s a different story in London, where 60 per cent of lettings are furnished. Even then, the majority of furnished properties are flats, with only 24 per cent of the houses rented so far in London in 2018 coming with furniture. This falls to just 11 per cent outside of London.