The Furnished Premium
"So we are paying for the bed," said Doug.
Picture a couple named Sally and Doug, 64 and 66. They plan to live in one town abroad for about five years. They found two apartments in the same building, one furnished and one empty, on the same floor with the same view.
The empty one rented for US$900 a month. The furnished one cost more. Guides commonly put the premium for a furnished apartment on a long lease at 10% to 20% above the unfurnished price. Some give wider ranges, and those come from landlords and agents, so it is worth asking in your own town. Sally wrote out three cases.
| Premium | Per month | Extra per year | Extra over 5 years |
|---|---|---|---|
| 10% | US$990 | US$1,080 | US$5,400 |
| 15% | US$1,035 | US$1,620 | US$8,100 |
| 20% | US$1,080 | US$2,160 | US$10,800 |
"So we are paying for the bed," said Doug. "Every month."
"We are paying for the bed, the sofa, the table and the pots," Sally said. "And somebody else carries them out when we leave."
That was the part they had not priced. Furnishing an empty apartment means shopping, delivery and a week of putting things together. It also means deciding what to do with it all when they leave. Used furniture often resells for 10% to 30% of its new price, and sometimes takes weeks to sell.
They went to a furniture store and wrote down what a bed, a sofa, a table, four chairs and a set of pans would cost. It came to about US$4,000 (an illustration; your town's prices will differ). Sally then put the two sides on one page, counting the sale of the furniture at the end.
| Five years in the empty apartment | US$ |
|---|---|
| Buy the furniture | 4,000 |
| Sell it at the end, at 10% to 30% | −400 to −1,200 |
| Cost of owning the furniture for five years | 2,800 to 3,600 |
| The furnished premium over five years (from the table) | 5,400 to 10,800 |
On these numbers, buying the furniture costs less than the premium if they stay five years, by US$1,800 to US$8,000. At the lowest premium and the highest furniture cost, the two come out about even after three years and four months (US$3,600 divided by US$1,080 a year). At the highest premium and the lowest furniture cost, buying pays for itself in under a year and a half (US$2,800 divided by US$2,160 a year). The comparison leaves out the time spent shopping and selling, and the risk of a landlord who sells the building.
Over one year the premium was US$1,080 to US$2,160. In the first year they were not sure that the town was the right one, so they took the furnished apartment and agreed to price the furniture again before the second.
You could…
- Ask the landlord the exact difference between the furnished and unfurnished price.
- Price a bed, a sofa, a table and kitchen basics at a local store, and subtract what they would resell for.
- Divide that net cost by the yearly premium to find the number of years at which buying pays for itself, then compare it with how long you plan to stay.
- Ask whether the landlord might sell you the furniture at the end.
Did you furnish your place abroad or rent it furnished, and would you do the same again? Write to us about your choice. A reader looking at an empty rented room could decide with more confidence.
Figures are estimates for planning, based on public data.
Sources: landlord and relocation-agent guides on furnished-rental premiums. The US$900 rent and the US$4,000 furniture list are illustrations, and the resale range is a rough rule of thumb.
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