Buying a Furnished or Unfurnished Condo, Which is Better?

Are you thinking of buying a condo in Thailand? As a foreigner buying a property in Thailand, you may find it surprisingly straightforward, and a trusted estate agent and lawyer could make an excellent investment. The Bangkok real estate market and other regions in Thailand have plenty of opportunities.

A common question from potential buyers is whether to buy furnished or unfurnished. Before we address that, let’s first look at what ‘furnished or unfurnished’ looks like in Thailand. Like many other countries, there aren’t stipulating regulations.

An unfurnished (also known as: Fully Fitted) property would usually include:

• Kitchen: fixtures, cupboards, sink, built-in structures
• White goods: refrigerator, washing machine, oven (but not always)
• Bathroom: fixtures, basin, toilet, shower
• Curtains or blinds

In a fully furnished property, in addition to the fittings and furnishings outlined above:

• Bedroom: bed, chest of drawers/wardrobe, bedside table, lighting
• Dining Room: table and chairs
• Living Room: lounge, coffee table, TV
• Kitchen: microwave

A partly furnished apartment is a combination of the two, and usually, the larger items are present.

Turnkey properties are fully furnished, including basic kitchen appliances, kitchenware and linen, making them ready to move into and start living.

It is worth mentioning a few quirks in Thailand.

• Kitchens: As eating out in Thailand is inexpensive, some kitchens may not have an oven, running hot water to the kitchen sink, or a decent cooktop. So if you are an ardent home cook, double-check these details. Properties featuring a ‘European Kitchen’ usually include an oven, cooktop, extractor fan, fridge, and hot water. A dishwasher may also be included.
• A filtered water system providing safe drinking water in the home is a definite bonus.

Owner-occupiers
As an owner-occupier moving to Thailand – purchasing a furnished apartment is undoubtedly the easiest, as you can simply unpack and start afresh. You will find a multitude of choices, so it will come down to your budget. Shipping furnishings from another country can be expensive and may include customs charges. Additionally, goods can be damaged in transit, and often they don’t quite match your new abode. So unless your employer is covering these costs, it’s not recommended. From economical to luxury, many furniture retailers are available if you want to stamp your particular decorating style and taste on your new home.

Real Estate Investors – Furnished versus Unfurnished
For real estate investors, many properties are on offer, from totally unfurnished to ready to move into. Here are our considerations for investing in furnished versus unfurnished.

Furnished Condos for Investors
Pros

• A higher demand, especially in city locations. Business people, expat families, retirees, interns and students prefer furnished properties. Furnished is less stressful. Simply pop open the suitcase and settle in.
• Attract up to 20% higher rental return, potentially higher for short term rentals.
• In new developments, the furniture packages are designed to fit the architecture and layout and are usually stylishly decorated in neutral tones, making them highly attractive to prospective tenants.
• Tax deductions may be applicable depending on your circumstances. Ensure you check with your accountant and lawyer.
• Getting a good deal on the furniture where a previous owner has spent more than what’s been factored into the net property sale price, compared to buying everything new (if condition is nearly new or not worn/damaged).

Cons

• As wear and tear take a toll on the current furniture, replacement costs can quickly add up, which may need to be added to your investment strategy.
• Hassles or disagreements with tenants regarding damage versus wear and tear can be an annoyance. Ensure that your lease agreement details the furniture and that accurate inspection reports are carried out and maintained.
• Insurance costs may be higher.

Unfurnished Condos For Investors
Pros

• Tenants looking for long-term rentals may prefer their own furniture, usually remaining longer in the property. Families might be an excellent example of this.
• As an investor, no outlay for buying furniture when you have purchased an unfurnished property.
• Insurance isn’t required to cover furniture.
• Generally, less management and time investment is needed with long term tenants.
• Buying your own furniture could save you money over buying a fully furnished property or furniture package, and make your unit stand out more with a more unique look to attract tenants.

Cons

• Tenants not wanting to buy furniture will not consider your property.
• Very small limited rental pool as most tenants prefer fully furnished.
• Less rental income than a furnished property.
• There is potentially more damage to halls, walls, and fittings by moving large items, like lounges, fridges, and beds, in and out.

As an Investor, which is better?
It primarily comes to where you are buying, your target tenants, and how involved you want to be in the management. Regardless of the level of furnishing, using a reliable agent can help minimize your involvement, letting you get on with other essential things in your life. The Juristic office in many condo developments will do a lot of the day to day tenant management and unit maintenance for you, so do check what is on offer when looking to purchase.You may also be interested in this article: Low-rise or High-rise Condos – Which is Best?