Empty rental or furnished rental
Choosing between unfurnished rental and furnished rental is a major strategic decision for any real estate investor. Behind this choice lie two different approaches to profitability, taxation, and property management. The first prioritizes stability and administrative simplicity, while the second attracts with its flexibility and higher returns. Understanding the concrete differences between these two models is essential for building a coherent, sustainable, and profitable rental investment.
The bare rental (or empty): simplicity and stability
One of the major advantages of the actual regime is the possibility of creating a property deficit, deductible from the global income (up to €10,700 per year). This allows for a reduction in taxation when significant work is carried out.
Furnished rental: flexibility and yield
What is a furnished rental?
A furnished rental consists of renting a housing unit that includes all the essential elements for the tenant's daily life. It is defined by the ALUR law (2014), which establishes the list of mandatory furniture and equipment : bedding, cooking plates, refrigerator, kitchen utensils, table, chairs, etc. In other words, the tenant must be able to move in immediately, without bringing anything other than their personal belongings.
This type of lease offers increased legal flexibility: one year automatically renewable (or nine months for a student, without tacit renewal). This shorter duration appeals to landlords wishing to regularly adjust the rent amount or recover their property more easily. It is a form of rental particularly suited for dynamically urban areas, student cities, or tourist districts.
The advantages of furnished rental
The furnished rental is appealing primarily for its higher profitability. On average, rents are 10 to 25% higher than in an unfurnished rental, and the vacancy rate often remains lower in large cities. This performance is also explained by a much more advantageous tax regime, particularly thanks to the status of LMNP (Non-Professional Furnished Rental).
Under the real regime, the investor can depreciate the value of the property and furniture, allowing them to reduce, or even completely eliminate, taxation on rental income for several years. The furnished rental also allows for greater contractual flexibility: shorter leases, simpler notice periods, and rapid adaptation to market fluctuations.
The disadvantages of furnished rental
Behind its attractive profitability, the furnished rental requires more rigor and involvement. Furniture and equipment must be maintained, replaced in case of breakdown or wear, and restored between tenants. This more frequent management involves a higher turnover and thus a greater administrative burden.
Another disadvantage is the initial cost. The housing unit must be fully equipped, which represents an additional investment of €3,000 to €6,000 depending on the size of the property. Moreover, some saturated markets — particularly in large cities — can make furnished rentals more competitive and therefore more demanding in terms of quality.
The taxation of furnished rental
The tax regime of furnished rentals is one of its major assets. Rental income is taxed in the category of Industrial and Commercial Profits (BIC), not as property income. Two regimes coexist:
The micro-BIC, for incomes below €77,700, offering a flat-rate deduction of 50%.
The simplified real regime, where it is possible to deduct all actual charges and depreciate the property and furniture over several years.
Depreciation is the true engine of fiscal profitability: it allows one to neutralize a large part of the taxable profit without impacting cash flow. This explains why so many investors prefer the LMNP status over the real regime.
Let's take a concrete case: a property generating €12,000 in rental income per year, with €8,000 in depreciations and expenses. The taxable income is reduced to only €4,000, or even zero after additional deductions. In short, furnished rentals allow you to keep more net income and optimize your long-term wealth growth.
Unfurnished or furnished rental: which to choose for your rental investment?
Profitability and Yield: Furnished Rentals Have the Advantage
The furnished rental is generally more profitable than the unfurnished rental, as it allows for a higher rent for the same property. The difference often lies between +10% and +25% additional income, depending on the location and quality of the furniture. This differential may seem modest, but it significantly transforms the performance of a rental investment, especially when adding the tax benefits of the LMNP regime.
On the other hand, rental stability clearly favors the unfurnished rental. A three-year lease ensures regular income without frequent turnover, while furnished rentals require more active management and regular maintenance. Thus, the choice depends on your profile: furnished for dynamic profitability, unfurnished for peaceful management.
Taxation: LMNP vs. Rental Income
The choice between unfurnished and furnished rental largely depends on the applicable tax regime. In unfurnished rentals, rents are taxed as rental income, often heavily taxed if you do not have deductible expenses. In contrast, the furnished rental falls under Industrial and Commercial Profits (BIC), allowing for the amortization of the property, furniture, and acquisition costs.
This difference in treatment changes everything: with LMNP on a real basis, it is possible to neutralize taxation for several years, whereas a landlord in an unfurnished rental will pay taxes from the first rental income. This makes furnished rentals much more attractive in the long term for investors looking for optimized net profitability.
In practice, an investor generating €10,000 in rental income per year from an unfurnished rental will pay between €2,000 and €3,000 in taxes. In furnished rentals under the real regime, they can bring this taxation down to zero thanks to depreciation. This tax optimization makes all the difference in a wealth strategy focused on performance.
Management and Tenant Profile
Beyond the numbers, rental management and the tenant profiles should also guide your decision. Unfurnished rentals attract stable profiles: families, settled couples, employees with permanent contracts. The result: less turnover and simplified management. Furnished rentals, on the other hand, appeal to students, young professionals, or mobile tenants, thus leading to shorter stays, but more dynamic rents.
The daily management of a furnished rental investment requires more oversight: furniture maintenance, more frequent inventories, and small repairs to be anticipated. However, the flexibility of the lease (1 year or 9 months for a student) allows for easier regaining of the property, resale, or adjustment of rent according to the market.
In Summary: Choose According to Your Investor Profile
The unfurnished rental appeals to cautious investors seeking peace, tax simplicity, and a sustainable rental relationship. The furnished rental, however, attracts those aiming for performance, flexibility, and tax optimization through the LMNP status.
A long-term investor will often choose unfurnished for stability and sustainability. A dynamically-oriented investor or one in the process of building wealth will favor furnished rentals for their net profitability and tax advantages.
In all cases, the key to success lies in the consistency between your wealth strategy, your management capacity, and your tax profile. Because in rental investment, there is no universal formula — only informed decisions aligned with your objectives.
Conclusion
Between unfurnished rental and furnished rental, there is no universal solution, only the one that corresponds to your goals. If you seek tranquility, an unfurnished rental remains the most stable. If you aim for performance and flexibility, a furnished rental — particularly under the LMNP status — offers a powerful tax leverage. In any case, the secret to a successful rental investment lies in coherence: choosing the strategy best suited to your profile, your available time, and your asset vision.
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