If you are deciding how much to increase rent for a furnished unit, the standard range for a long-term lease is 15 to 25 percent above what the same unit would rent unfurnished. Short-term and corporate stays routinely carry premiums of 40 to 50 percent or higher. Where you land inside those ranges depends on your market, the quality of what you provide, how long tenants stay, and any rent cap that applies in your city or state.
What Furnished Rentals Typically Command
For leases of a year or more, 15 to 25 percent over the unfurnished rate is the working range. That premium compensates for the capital you put into furniture, the wear it absorbs, and the convenience tenants get from skipping delivery and furniture shopping. The higher end is realistic in markets with lots of relocating professionals or graduate students. In markets where tenants tend to own their own furniture, you may struggle to justify more than 15 percent.
Short-term and corporate housing is a different calculation. Stays of three to six months routinely price at 40 to 50 percent above market rent, and some furnished short-term rentals in high-demand cities push well beyond that. The math works because turnover costs are much higher: cleaning, inspecting, and restocking happen far more often, and administrative work piles up with each new lease. Tenants paying these rates expect quality furnishings and a genuinely move-in-ready unit, not a mismatched thrift store setup.
Pricing From Your Actual Furnishing Costs
A percentage is a starting point. The number that keeps you honest is cost recovery. Add up every purchase: beds, mattresses, sofas, dining tables, lamps, kitchenware, linens, electronics. The IRS classifies furniture and appliances in residential rental property as five-year assets under the general depreciation system, which gives you a reasonable benchmark for useful life.1Internal Revenue Service. Publication 527 (2025), Residential Rental Property
Divide the total by 60 months. If you spent $7,500 outfitting a one-bedroom, your baseline recovery is $125 per month. That bare figure includes no margin, no replacement reserve, and no credit for the time you spent sourcing and assembling everything. Most landlords add 20 to 40 percent on top of the cost-recovery number to account for items that break early, styles that need refreshing, and tenants who are harder on furniture than expected. Professional delivery, assembly, and staging for a one-bedroom typically runs $1,000 to $2,500 on top of the furniture itself, and that belongs in the per-month calculation too.
Keep every receipt. The IRS requires documentary evidence for expenses you plan to deduct, and in an audit you need to substantiate each purchase.2Internal Revenue Service. Tips on Rental Real Estate Income, Deductions and Recordkeeping The same records protect you later in disputes with tenants about what you provided and in what condition.
Rent Caps and Lease Terms Set Your Ceiling
Adding furniture does not exempt you from rent increase laws. In jurisdictions with rent control or rent stabilization, the cap applies to the total rent charged, including whatever portion you attribute to furnishings. You cannot layer a furniture surcharge on top of the maximum allowable increase and call it something different.
Roughly a dozen states and the District of Columbia have some form of rent regulation, and dozens of individual cities impose their own limits. A common formula caps annual increases at a fixed percentage plus local inflation, with an absolute ceiling of around 10 percent. If inflation is running at 3 percent and the formula allows 5 percent plus inflation, you can raise rent by 8 percent, period. Some jurisdictions let landlords apply for a capital improvement surcharge to recoup costs above the standard limit, but furniture generally does not qualify. Those pass-throughs typically require the item to be permanently affixed to the property with a useful life of five years or more, and movable furniture fails that test in most rent-controlled jurisdictions.
In areas without rent control, you have more pricing freedom, but market forces still apply. A 30 percent jump at renewal will send most tenants looking for alternatives, and the vacancy cost of losing a good tenant almost always exceeds the revenue from an aggressive hike.
If you are converting an occupied unfurnished unit to a furnished one mid-tenancy, read the lease carefully. Most leases require mutual agreement to change the rental terms. You cannot unilaterally add a furniture fee.
Notice You Have to Give Before the New Rent Starts
Even where no rent cap exists, nearly every state requires advance written notice before you can raise rent. The common requirement is 30 days for month-to-month tenancies, though some states require 60 or even 90 days once the increase passes a certain percentage. For a tenant on a fixed-term lease, you generally cannot raise rent at all until the lease expires, at which point you propose new terms for renewal.
Getting the notice period wrong is one of the easier mistakes to make and one of the most avoidable. If you send a rent increase notice 25 days before the effective date in a state that requires 30, the increase is unenforceable and the tenant keeps paying the old rate. Check your state and local rules before sending anything, and keep a copy with proof of delivery. The same rules apply whether you are raising rent $50 for a furniture package or $500 for a market adjustment.
Tax Deductions That Lower Your Real Cost
The rent premium only tells half the story. Tax deductions for furnishing expenses meaningfully reduce your out-of-pocket cost, which means a modest premium can still produce a healthy return.
Depreciation and Bonus Depreciation
Under the standard schedule, furniture and appliances in a rental are written off over five years using the Modified Accelerated Cost Recovery System.1Internal Revenue Service. Publication 527 (2025), Residential Rental Property You deduct a portion each year rather than all at once.
Under legislation signed in 2025, qualified property acquired after January 19, 2025, is eligible for a permanent 100 percent first-year bonus depreciation deduction.3Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill If you furnish a unit in 2026 with $8,000 of new furniture, you can deduct the entire $8,000 in the year you place it in service rather than spreading it over five. You can also elect a reduced 40 percent bonus rate if a full first-year write-off would create a net operating loss you would rather avoid.
Bonus depreciation does not require that renting be your active trade or business, which matters: Section 179, the other large first-year write-off, is unavailable to most rental owners for exactly that reason.4Internal Revenue Service. Publication 946 (2025), How To Depreciate Property Bonus depreciation fills that gap for the typical landlord.
De Minimis Safe Harbor for Smaller Items
For individual items that cost $2,500 or less per invoice ($5,000 if you have audited financial statements), you can elect to deduct the full amount as an expense in the year of purchase without depreciating it at all.5Internal Revenue Service. Tangible Property Regulations – Frequently Asked Questions This is useful for lamps, kitchen utensils, bedding, and other smaller items that fall under the threshold individually. The election is made on your tax return each year.
Costs to Price In Beyond Furniture Itself
Security Deposits
Several states allow a higher security deposit on a furnished unit. The logic is simple: more property is at risk, so a larger cushion is reasonable. Some states set the furnished limit at 1.5 months’ rent compared to one month unfurnished. Others allow an additional furniture-specific deposit when the replacement value crosses a threshold. A few impose no deposit limit at all for furnished units.
This area has been shifting toward uniform caps. A major reform effective in mid-2024 reduced the general deposit limit to one month’s rent in the nation’s most populous state, eliminating the higher cap that had previously allowed up to three months for furnished units. If you are relying on an older understanding of your state’s rules, verify the current limits before signing a new lease.
Whatever deposit you collect, a signed inventory with dated photos at move-in and move-out is the single best tool for resolving disputes about damage. Many states also impose strict deadlines and procedural requirements for returning deposits. Missing the window or failing to provide an itemized statement of deductions can forfeit your right to withhold anything, regardless of the damage.
Maintenance and Replacement
When you furnish a unit, you take on maintenance obligations that do not exist with an unfurnished rental. If you provide an appliance and it breaks through normal use, you repair or replace it. The same principle extends to furniture in most jurisdictions, though the legal framework varies. Some states apply an implied warranty that furnished items must be safe and functional at move-in. Others treat the furniture more like a bailment, where you retain ownership and the tenant has a duty of reasonable care.
The practical consequence is the same either way: budget for repairs and replacements. A $600 sofa in a rental will not last as long as the same sofa in your own living room. Plan to replace soft furnishings every three to five years and hard furniture every five to eight. Build those replacement costs into the rent premium rather than absorbing them as surprises. Your lease should spell out who covers what: the landlord handles normal mechanical failures and wear-related replacements, while the tenant covers damage from misuse or negligence.
Insurance
Standard landlord policies often do not cover the contents you provide to tenants. The building is covered, but the sectional sofa and the flat-screen television may not be. If a fire, burst pipe, or break-in destroys your furnishings, you could be out thousands with no reimbursement. Look for a policy with personal property coverage designed for furnished rentals, or add a contents rider to your existing policy.
Renters insurance on the tenant side does not cover your furniture either. It protects the tenant’s belongings, not yours. Require tenants to carry renters insurance for their own possessions and liability, and separately make sure your landlord policy covers the items you own. Liability matters too: if a guest trips over a coffee table or a mounted bookshelf falls on someone, responsibility can get complicated, and liability coverage on both policies reduces everyone’s exposure.