Malaysian homes are usually handed over bare, like a car without an engine. Many owners ask how spending about RM30,000 to have an investment unit designer-furnished can be justified, when it may raise the rent by only RM400 to RM500 a month.
How do you decide whether furnishing a rental unit is worth the cost?
“Using the lowest amount of investment to get the highest rental returns.”
Furnish to let the unit faster or at a higher rent, but compare the right numbers. Against the roughly RM12,000 a unit needs anyway to be livable, a RM30,000 package costs about RM18,000 more, which buys time and design sense, and higher rent can lift what the property is worth.
Why
Compare against the bare minimum
RM30,000 divided by RM500 suggests five years to break even. But a unit needs a kitchen cabinet, lights, fans, curtains, a water heater and other basics before anyone can live in it, about RM12,000 if you do it yourself, so the real extra is closer to RM18,000.
You are paying for time and design sense
Doing it yourself means managing contractors, taking leave for deliveries and having the eye for it. If you live nearby and enjoy that, you save money; Sean, who values time most, would rather pay. Furnishing companies typically finish in about 30 working days.
Rent can lift the property's value
RM400 to RM500 more rent a month is roughly the instalment on another RM100,000 of loan over 30 years. Where buyers value a property on its rental return, that extra rent can make it worth about RM100,000 more.
First impressions win tenants
Like a show unit in a sales gallery, a dressed-up unit wins on the first viewing. At the same rent, a tenant will pick the designed unit over an empty or semi-furnished one.
What to do
- Check the rents for bare, semi-furnished and fully furnished units in your project before deciding.
- Spend only on what raises the rent or shortens the time the unit sits empty.
- Skip personal touches like plaster ceilings and marble tops in an investment unit; save them for your own home.
- Choose your contractor or furnishing company before you collect the keys, not after.
- Do it yourself only if you have the time, the design sense and live close to the unit.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
WHY SHOULD I FULLY FURNISH MY PROPERTY?
Sources & Verification Data
Summarised from Sean's full English captions for this January 2021 episode. The quoted answer is verbatim; everything else is paraphrased. Sean works with The Makeover Guys, a furnishing company the video promotes, so he has a stake in this advice. Figures are as stated in 2021.
