I have heard it said that the best marketing means being the market leader, so going for the masses and volume, or instead focusing on a niche successfully and therefore commanding a price premium but in a smaller market.
I would imagine the idea of mass-market property rentals is not going to appeal or even be possible for most of the readers of this insights page and so niche is the way. As an aside, If I think about it, each individual property is a niche in itself in fact and so similar principles apply - how best to present an individual property to the target tenant segment, such that demand and prices (i.e. rents) are maximized...is still niche marketing.
I have often thought and pondered the question of whether to go with furnished or unfurnished properties and aside from short-term, holiday let accommodation, have gone down the unfurnished route so far with single let properties. This research shared today suggests that in certain cases - especially in larger, urban inner-city areas with properties that appeal to young professionals (our niche here), that rent premiums achieved are between 24% and 36% in the top ten locations identified. Now that is interesting...inner city Leeds, Bradford, Birmingham or Nottingham, among others, can present higher yields for some furnished accommodation and so it is worthy of re-examination I think.
There are extra costs involved in furnishing a property and even after furnishing, there are costs to maintain, repair and eventually replace the furniture. The good news is that the tax man helps us out a bit to bear the burden here - as HMRC allows a tax deduction equivalent to 10% of the gross rent as a wear and tear furniture allowance - note the deduction is based on the rent and not on the actual cost of the furniture, so do the sums...
Another issue is that some tenants may have some items of furniture but not all and so we need to decide whether to allow a pick and mix approach and if we do, we need somewhere to store things, which presents practical and cost implications.
It will not therefore be for everyone...but that is the whole idea of operating in a niche market; so if it sounds appealing and you can live with the additional admin, storage and maintenance aspects of going down the furnished route then the upside could be rewarding too 🙂
Source:Â www