Unfurnished apartments are better business

According to a special investigation by Property Weekly this month, it has emerged that unfurnished apartments are 75 per cent more likely to find takers than furnished apartments.

It has also emerged that although furnished apartments attract a higher rental yield, they become a hassle for owners in the long run due to high maintenance costs and day-to-day managing issues.

“Around 75 per cent of people pick unfurnished units and only 25 per cent go for furnished properties,” says Russell Owen, Property Consultant at Ere Homes. “[Unfurnished property] offer complete freedom to style homes as per the tenant’s needs, which makes the unit more economical.”

With furnished units commanding only 10-30 per cent more than unfurnished apartments, many individual owners find it hard to decide whether to lease their property as furnished or unfurnished. And what makes matters worse is that the property market also offers hotel-owned serviced apartments, making competition harder for furnished units.

Sunil Saraf, Managing Director of Tanjay Real Estate, also points out that compared to furnished apartments, hotels and serviced apartments are more stable property investments because they benefit directly from the UAE’s growing tourism industry.

“Any tourist-driven real estate will fundamentally be a stable investment since it can comfortably survive any real estate or economic cycle in Dubai,” says Saraf.

Often, cost and comfort are crucial factors that draw buyers and tenants towards furnished properties, but these two factors don’t always come together.

Elliott Starr, Senior Property and Investment Consultant at Provident Estates, says, “The problems that usually get in the way are style, individual taste and the unrealistically high premiums set by landlords and owners on furnished units.”