Your Future Tenants
Before renting out your furnished apartment, the first question to ask is this: who is your target audience? Based on our experience in real estate in Etterbeek and Brussels-Centre, we have noticed that 90% of people who rent a furnished apartment or studio are expatriates, on assignment in Brussels for one to three years. “Whether they are single, a couple, or a family, expats primarily look for furnished accommodation in Brussels where they can simply unpack and feel right at home,” explains Christopher Byl, a rental real estate advisor at Hermanns Real Estate.
However, another audience also seeks furnished apartments: young divorcees. They have just gone through a sometimes difficult separation and are not in the mindset to look for new furniture. They simply need accommodation ready to receive them, giving them time to get back on their feet and purchase an apartment or house within the following year.
The Importance of Location
If you own a property to rent in central Brussels, furnishing it can prove profitable for you. Indeed, by being close to European institutions, international companies, or hospitals, you will be able to reach the appropriate audience.
In the heart of the European capital, there are also tenants looking for a place 4 days a week, not on weekends. They will therefore need furnished accommodation to minimize their investment. However, if your property is located more on the outskirts or in a more distant municipality, we advise against opting for furnished rental, as it could hinder your ability to find tenants.
When is an Apartment Considered Furnished?
To be able to use the expression “furnished accommodation” in your rental listing, you must provide, for example, approximately €10,000 worth of furniture for a 2-bedroom apartment. You will also need to provide pots, other kitchen utensils, bedding, a vacuum cleaner, etc. “There are different types of furnished properties, but the expats we meet in Brussels mostly look for the complete package, which includes furniture, but also utilities, internet connection, etc.,” adds Christopher Byl.
A word of caution, however: some landlords use their apartment for rent as a storage unit, placing old or mismatched furniture there, which does not add value to the property. Tenants are rather looking for modern and contemporary furnished accommodation where they will feel comfortable. Therefore, avoid this technique and opt for Scandinavian, minimalist, or colorful decor.
Disadvantages
Maintenance and Vacancy Periods
If you rent out your apartment with furniture, this will require more extensive follow-up than with an unfurnished property. Indeed, at the end of the lease, you will need to check that all furniture is still in good condition for the next tenant, and replace any damaged items. To keep an official record of the furniture’s condition upon the tenant’s entry, remember to include the furniture in the inventory report!
By targeting an audience looking for a short-term lease, you also risk more frequent vacancy periods than with an unfurnished apartment. Indeed, upon your tenant’s departure, you may sometimes need to restore the property to its original condition, thus leaving it vacant for one to two months. Similarly, tenant turnover will be more frequent.
Taxation
As an owner, you are obliged to declare the rental of furniture in addition to the property itself. On the lease, you have two options: specify a global amount, which includes the rental of both the property and the furniture, or segment the amount into two rents – one for the apartment and one for the furniture.
In the first scenario, the tax administration automatically considers that 40% of the global amount corresponds to the furniture rental, whereas in the second, you can specify the amount you wish to receive each month for the provision of your furniture. In this case, we advise you to calculate approximately 10% of the total rent.
With the current tax rate on furniture rental being 30%, you have the option, as a self-employed individual or a company, to benefit from a flat-rate deduction of 50% which will be included in your professional expenses. The additional tax payable on the provision of furniture will then be 15%.
Advantages
Higher Rent
While the disadvantages may seem numerous, renting out your furnished apartment nonetheless offers several advantages. First and foremost, by furnishing your property, you can set a higher rent compared to the same type of unfurnished property. Depending on the quality of the furniture and the accommodation, you could increase your monthly income by up to 20%.
Apartment Rented Quickly and Profitable
To be able to start their assignment on time, expatriates looking for furnished accommodation in Brussels are more inclined to rent quickly. Your furnished property will therefore be occupied quickly compared to a standard property. Furthermore, by renting your furnished property to a representative of a European institution or an international company – ambassadors, CEOs, administrators, project managers, etc. – the lease can be automatically renewed because the institution/company is responsible for finding new tenants (the person leaving their position leaves their accommodation to their successor).
Are you an owner who also plans to expatriate for a few years? Renting out your furnished apartment will save you the costs associated with renting a storage unit, and will also spare you from having to move your furniture only to reinstall it a few years later. Additionally, you benefit from a monthly income that allows you to continue paying your mortgage, and you will find your apartment ready upon completion of your assignment abroad.
