Furnished Living

What is "furnished living"?

These are fully furnished apartments that can be moved into immediately – ideal for business travelers, students, or anyone looking to relocate and live flexibly in the short term.

What should one consider?

· Good location

· Thoughtful furnishing concept

· Efficient rental management

Legally secure contract design

Furnished living is a comfortable solution for those who need accommodation quickly and without much effort – and for landlords, it is an attractive way to offer living space profitably.

Typical furnishings in furnished apartments

The most common furniture in furnished apartments includes:

• Beds

• Sofas

• Tables

• Chairs

• Cabinets

These basic furnishings create a homely atmosphere and allow tenants to feel at home quickly. Kitchen utensils such as dishes and cutlery are also often available to facilitate daily life.

Additionally, furnished apartments are usually equipped with basic household appliances such as refrigerators, washing machines, and microwaves. This equipment ensures that tenants have all the necessary amenities available and do not have to worry about purchasing or installing these devices.

Furnishing surcharge – added value for landlords

A furnishing surcharge allows landlords to charge an additional fee for the furnishings on top of the local rent. The amount is based on the value and condition of the furniture, not on the living space.

Advantages:

• Up to 60% higher rent possible

• The surcharge must be regulated in the rental agreement.

• Furniture costs can be deducted for tax purposes.

Thus, the furnishing surcharge not only increases the attractiveness of the apartment but also the rental yield.

Creation of a rental agreement for furnished apartments.

When renting a furnished apartment, it is advisable to include an inventory list with photos of the furniture as an attachment to the rental agreement. This list helps document the condition and quantity of the furniture and serves as evidence in the event of damage or loss.

The rental agreement for a furnished apartment should contain specific clauses to protect both tenants and landlords. Important clauses include regulations on rental duration, notice periods, and the use of communal facilities.

Challenges in furnished living.

Tenants often have less freedom to design furnished apartments, as the existing furnishings may not match their personal preferences.

For rental periods exceeding 3-4 years, furnished living is less economical, as the higher rental costs compared to unfurnished apartments are more expensive in the long run. This poses a challenge that both tenants and landlords must consider.

Dealing with wear and damage.

Tenants are responsible for damages that occur intentionally or through negligence. The burden of proof for damages to furniture lies with the landlord, who must demonstrate the original condition. A handover protocol and photos of the furniture upon move-in can help avoid legal issues in case of damage.

Landlords are obligated to repair defective furniture that has not been damaged through improper use. The tenant's liability insurance covers damages caused by the tenant to the furniture.

Management of short-term rental agreements.

The frequent turnover of tenants in furnished apartments must be supported by efficient communication and management strategies. Landlords should establish clear guidelines for the handover and return of the apartment as well as for handling furniture.

Collaborating with property management companies or rental services can significantly reduce the effort of management during frequent tenant changes. This ensures smooth management and increases tenant satisfaction.

Special features of tenancy law

A detailed and legally secure rental agreement is essential for furnished apartments. In the case of unfurnished apartments, an indefinite rental agreement is usually offered, while furnished apartments are often rented out with fixed-term rental agreements.

The Hamburg model and the Berlin model are the two most common approaches to determining the furnishing surcharge, which is typically calculated at two percent of the current value of the furniture per month.

The market for furnished apartments

The demand for furnished apartments has steadily increased due to changes in the working world and digitalization. Particularly in university cities and among younger professionals, demand is rising as this form of housing supports flexibility and temporary lifestyles.

Renting out furnished apartments can help landlords increase their income, especially in urban areas with high demand. The market is developing dynamically and presents both opportunities and challenges for landlords and investors looking to rent out their properties.

Demand and supply

In large cities, the market for furnished apartments has changed to the extent that often more than two-thirds of small apartments up to 50 m² are furnished. Rental prices for furnished apartments have risen in recent years; for example, Berlin experienced an increase of 86% since 2014 in the rental and housing market.

Rental prices for furnished apartments rose by 29% in the last two years, attributed to increasing demand and limited availability. The average rental price for furnished apartments in large cities ranges between €25 and €35 per square meter.

What we recommend to investors

Furnished rentals can significantly increase rental yield. Large cities are particularly suitable for furnished living, while C-locations are less suitable. A good location within the city is important for the marketability of the property.

Due to the frequent tenant turnover, good rental management is important.

Through our developer network, we offer access to suitable properties for furnished rental throughout Germany.