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Exploring the Benefits of Furnished Rentals: A Comprehensive Guide

The advantage of renting furnished comes in different aspects, for the owner as well as for the tenant. So, if you are hesitating between renting empty or furnished, it is important to understand the mechanisms concerning taxation.

Need to consider various factors before deciding on rental furnishing options
Factors to consider in renting furnished or unfurnished.

The advantage of an interesting tax system

Even if rents are capped in certain areas such as Paris, the tax system remains particularly interesting, due to the fact that the return is higher than for an empty rental.

In this context, the advantage of renting a furnished property lies in the fact that you obtain the status of non-professional furnished renter or LMNP. This is an essential tax treatment when this is not your main activity. To benefit from it, you must take into consideration the rental income which absolutely must not exceed 50% of the income of the tax household. Moreover, the total amount of receipts must not exceed 23 000 € per year.

If this is the case, you obtain this status when you make a furnished real estate investment.

When declaring your income on the Cerfa 11921*05, you have two options.

The micro BIC system, which allows you to obtain a flat-rate tax deduction of around 50% on rental income. However, if you rent in a guest room or in classified tourism, the deduction increases to 71%.

The second solution concerns the real taxation system, so you will be taxed according to the profit you generate.

This is the first advantage of furnished rentals for the owner. But it is important to choose the right tax system, especially if you have a lot of expenses to deduct such as co-ownership fees, works, property tax or the cost of the loan.

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The advantage of a furnished rental for owner concerning higher rents

Compared to an empty apartment, the rent for a furnished property can be up to 30% higher. This depends directly on the location and of course on the level of equipment. This is a significant advantage for furnished rentals.

This can also be seen in cities where demand is particularly high, such as Paris. On average, an empty property rents for 1618 € according to a survey carried out in March 2021 against 1803 € for a furnished property.

This is a particularly interesting financial advantage if you decide to choose this option. But don't forget to take out insurance against unpaid rent to avoid your investment not paying off.

The advantage of a furnished rental for the tenant and the owner concerning the flexibility of the lease

In a furnished rental, it is important to know the rules and specificities for each city. But overall, the duration of the lease will be much shorter. It is about one year, compared to three years for an empty rental. However, if you are looking for a student lease, you have the possibility of reducing it to nine months.

For a mobility lease, it is necessary to count on a delay of 1 to 10 months. As a result, as a landlord, you benefit from a particularly interesting flexibility with the possibility of revising your rent more easily.

The tenant is not obliged to stay for three years either, as everything would have been defined beforehand on the lease.

The possibility of offering shorter nine-month leases for student accommodations
The flexibility and convenience of furnished rentals for both parties.

Between two rentals, the owner can perfectly well carry out improvement work, which will allow him to rent his furnished property with a higher rate.

However, in the case of a furnished rental, you are within your rights to ask for two months' rent as a security deposit. Generally, this practice is only done for one month on an empty unit.

The notice period is also considerably reduced, from three months for an empty rental to one month for a furnished rental. As you can see, flexibility remains the order of the day and this is a significant advantage for both the tenant and the owner.

The advantages and disadvantages of a furnished rental for the owner concerning a growing demand

Mostly, furnished rentals are made in large cities, i.e. cities with young workers and students. This is a perfectly traditional pattern, as metropolises have the capacity to attract a significant amount of the population interested in professional missions. In France, this is notably the case for the city of Paris, but also for Bordeaux and Lyon.

There is no doubt that there are more furnished apartments than empty ones. But the drawback lies in the introduction of the Alur laws since 2014. The rental conditions are therefore much harder and it is important that the housing is considered decent. That is, the tenant must be able to live, eat and sleep there according to the various requirements set by the decree of September 1, 2015.

Thus, if you proceed to rent a furnished property, you must imperatively put various equipment at the disposal of the tenant. For example, blackout shutters in the bedrooms, bedding, a hotplate, a table, chairs, an oven, a refrigerator, lights etc.

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Leading vacation rental management with UpperKey.

Take advantage of a turnkey management service for a furnished rental

There's no question that UpperKey is a leading player in the vacation rental or furnished rental industry. Whether you decide to rent out your property as a standard rental or through a specialized platform such as Airbnb, you'll receive guidance from the moment you invest until you rent out your property.

UpperKey manages all aspects, i.e. the technical, administrative, fiscal and legal aspects. For you, this is a real opportunity to have peace of mind when you decide to rent out your property. So don't hesitate to contact UpperKey to obtain a personalized quote for your project.

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Is furnished rental interesting for the tenant?

Certainly, when a tenant chooses this type of rental, he or she sees several benefits. First of all, a certain flexibility in the lease, as we have seen previously. It is a particularly flexible solution, perfectly suited for young workers, professionals performing a temporary mission or for students.

From the outset, a lease binds the tenant to the landlord with a predefined rent amount. If at the end of the lease term, the tenant wishes to move or extend, he can do so without any problem.

The advantage for the tenant is also from a financial point of view, because he will not need to invest in equipment to live. He arrives in a turnkey housing and he only has to deposit his personal belongings to enjoy it.


Determine your property's rental value with UpperKey as your tenant

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