Furnished or Unfurnished Apartment: Which Rental Model Is More Profitable for the Owner?

Prepared by the NovAsia Editorial Team

An owner buys an empty apartment and receives two opposite recommendations.

An agent serving relocating professionals says: spend USD 10,000, furnish it completely and charge USD 200 more each month.

Another adviser says: buy nothing. A family will bring its own furniture, stay longer and create fewer disputes over the owner's possessions.

Both recommendations may be right.

The outcome depends on:

• location and building quality;
• layout;
• target tenant;
• lease length;
• competing stock;
• furnishing quality;
• the proven rent premium;
• vacancy time;
• replacement cost;
• the owner's ability to manage a large inventory.

The main mistake is treating furniture as a one-off purchase. In reality, it is an operating system inside the apartment. It has to be selected, delivered, assembled, photographed, inventoried, repaired, insured, replaced and eventually removed or sold.

A fully furnished model is commercially justified only when the additional net rent and faster leasing compensate for the entire life cycle of the contents.

There are four models, not two

Fully furnished

A move-in-ready apartment may include:

• bed and mattress;
• sofa and dining furniture;
• wardrobes and curtains;
• air-conditioning;
• refrigerator and washing machine;
• television;
• kitchen equipment;
• proper desk and lighting.

Partly furnished

The main items are present, but the apartment is not equipped as a complete household.

Appliances only

The kitchen, air-conditioning, refrigerator, washing machine and built-in storage are ready, while the tenant brings movable furniture.

Unfurnished

The apartment contains the finishes and built-in elements only, although market practice may still treat air-conditioning or basic kitchen fittings as standard.

A decision should compare the exact inventory, not just the labels *furnished* and *unfurnished*.

The tenant segment determines the product

Relocating foreign professional

Often wants to move in immediately and does not want to buy a bed and sofa for a 12- or 24-month assignment.

Corporate employee

May expect a specified furniture package, reliable maintenance, clear expense documents and sometimes household items.

Long-term family

May already own furniture and prefer the flexibility to arrange the home itself.

Local professional

May prioritise a lower rent and accept a partly furnished or appliances-only apartment.

Student or temporary worker

Usually values low initial cost and a small ready-to-use unit.

Diplomatic, NGO or international-organisation placement

May have detailed standards for furnishings, security and service.

A studio for a single consultant should not be furnished like a family apartment. A family apartment should not be designed like a hotel room.

Phnom Penh already has substantial move-in-ready competition

Current residential and relocation guides describe a broad supply of modern condominiums, serviced apartments, villas and traditional apartments in Phnom Penh.

For a relocating tenant, merely providing a sofa and bed is no longer a distinctive advantage. The unit competes on:

• mattress and furniture quality;
• work space;
• internet;
• storage;
• lighting and curtains;
• layout and view;
• building operations;
• total monthly cost.

A cheap developer furniture pack may satisfy a checklist while performing poorly against nearby alternatives.

The rent premium needs evidence from close comparables

The owner should compare:

• the same building;
• the same layout;
• similar floor and view;
• furnished and unfurnished variants;
• the same lease length;
• the same included services;
• achieved rents rather than advertisements;
• time needed to secure a tenant.

Suppose an unfurnished apartment rents for USD 600 and a furnished one for USD 750. The headline premium is USD 150.

The furnished model may also require:

• internet: USD 25;
• higher management commission: USD 12;
• maintenance reserve: USD 30;
• replacement reserve: USD 60;
• extra turnover cleaning: USD 10.

In this simplified example, most of the apparent premium disappears.

Not every expense occurs each month, but the calculation should recognise the full operating cycle.

Calculate payback using the net premium

A simple formula is:

Total furnishing cost / additional monthly net income

Example:

• furniture and appliances: USD 8,000;
• delivery and assembly: USD 500;
• styling and photographs: USD 300;
• total initial cost: USD 8,800;
• extra rent: USD 180 per month;
• extra monthly expenses and reserves: USD 60;
• net premium: USD 120.

8,800 / 120 = 73.3 months

The simple payback period is approximately 6.1 years.

If a substantial portion of the furniture must be replaced within five years, the economics are weak unless furnishing also reduces vacancy or improves the resale process.

Faster leasing may justify the capital cost

An unfurnished apartment takes four months to rent, while a furnished one takes one month.

At USD 600 per month, the three months of avoided vacancy are worth USD 1,800. That meaningfully reduces the economic cost of furnishing.

The assumption must come from the specific building and target market. Full furnishing does not always shorten vacancy. In a family segment, it can reduce demand because prospective tenants already own furniture.

Measure three separate returns

Rent premium

The extra monthly net income after all furniture-related costs.

Occupancy effect

The change in days vacant and the probability of securing a suitable tenant.

Resale effect

Whether the furnishing helps market the apartment and how much of its cost is actually recoverable on sale.

Furniture generally has weak second-hand value. A USD 10,000 package rarely adds the same USD 10,000 to the property sale price.

Developer furniture packages are convenient but not automatically good value

Advantages include:

• immediate readiness;
• one supplier and one installation process;
• coordinated design;
• simplified remote ownership;
• possible warranty and project access.

Risks include:

• markup;
• generic quality;
• uncomfortable mattress;
• impractical pieces;
• difficulty replacing exact models;
• identical interiors across many competing units;
• incomplete inventory;
• warranty dependence on the developer;
• poor fit with the target tenant.

Request a detailed specification covering brands, models, materials, dimensions, quantities, warranties and delivery conditions. “Premium furniture package” is not a specification.

Individual furnishing can differentiate the apartment but requires control

Useful improvements may include:

• a real work desk and ergonomic chair;
• a standard-size, replaceable mattress;
• blackout curtains;
• durable sofa;
• practical storage;
• good task lighting;
• essential kitchen appliances;
• usable balcony furniture.

The owner must control:

• budget and supplier selection;
• measurements;
• building delivery rules;
• installation damage;
• warranties and receipts;
• inventory updates;
• availability of replacement parts.

The interior should solve tenant needs rather than express the owner's personal taste.

The mattress can matter more than expensive decorative details

A tenant may ignore a designer side table but reject the apartment because of an uncomfortable mattress.

For a rental unit, practical features include:

• a common size;
• durable construction;
• replacement availability in Cambodia;
• medium firmness suitable for a broad audience;
• a protective cover;
• documented purchase date and model.

The cheapest mattress produces complaints and turnover. A luxury mattress does not always generate a matching rent premium.

A proper workspace can improve competitiveness

Relocating professionals often value:

• a desk large enough for real work;
• a supportive chair;
• accessible sockets;
• stable internet;
• neutral lighting and background;
• blackout curtains;
• a quiet location in the apartment.

A decorative console is not a work desk. In a one-bedroom unit, a functional workspace can add more leasing value than a second television.

The kitchen package should match the lease term

A long-term tenant may bring cookware, plates, small appliances and linen. Every additional item increases inventory, cleaning and deposit disputes.

A useful core package often includes:

• refrigerator;
• hob and extractor;
• washing machine;
• storage;
• microwave where expected by the tenant segment.

A complete set of kitchenware makes more sense for serviced or short-term accommodation than for an ordinary annual lease.

Providing linen changes the operating model

Sheets, towels, pillows and duvets improve immediate readiness but create cleaning, hygiene and replacement obligations.

For a twelve-month tenancy, many owners provide the bed and mattress but not the linen. For short stays or serviced apartments, linen is part of the hospitality operation.

An owner should not accidentally convert a normal long-term rental into a hotel-style service without pricing and managing that responsibility.

Furniture quality should match the ownership horizon

Budget package

Low initial cost, faster wear and easy replacement.

Durable mid-market package

Often the strongest fit for a long-term investment unit.

Premium package

Can support executive accommodation only where the building, location and service level justify the segment.

Expensive furniture in a weak building rarely creates a premium rental. The building establishes the upper limit of what the fit-out can achieve.

Start the replacement reserve on day one

Illustrative management lives may be:

• mattress: 4–6 years;
• sofa: 5–7 years;
• curtains: 4–6 years;
• washing machine: 5–8 years;
• refrigerator: 7–10 years;
• television: 5–8 years;
• dining chairs: 4–7 years;
• small appliances: 2–4 years.

Actual life depends on product quality and use.

If the package costs USD 9,000 and the average replacement cycle is seven years, the annual management reserve is approximately USD 1,286. This is a planning figure, not necessarily a tax deduction or accounting depreciation rate.

Ordinary wear and tenant damage need different treatment

Cambodian lease principles distinguish normal wear from damage caused by the tenant.

The lease and move-in inventory should record:

• each item;
• brand and model where relevant;
• condition and age;
• photographs;
• existing defects;
• replacement evidence for higher-value items.

The owner should not charge the full price of a new sofa to replace a five-year-old one. The tenant should not describe a broken table caused by impact as ordinary wear.

The larger the inventory, the harder it is to manage

A fully furnished apartment can contain 100–200 identifiable items. “Fully furnished” is not a useful inventory description.

A practical inventory can group:

• furniture;
• appliances;
• kitchen items;
• electronics;
• keys and access devices;
• balcony items;
• linen where provided.

Record serial numbers for expensive equipment. When the manager repairs or replaces an item, the register should be updated rather than leaving the original description unchanged for years.

Contents insurance should match the furnishing model

The building policy may not insure the owner's movable property.

The owner should review potential cover for:

• contents and internal improvements;
• fire and water damage;
• theft;
• liability;
• power-surge or equipment damage where available;
• tenant-related risk;
• vacancy and short-term use;
• loss of rent after insured damage.

Deposit security and platform protection are not substitutes for a properly structured policy.

The deposit should reflect risk but remain commercially realistic

A premium contents package can justify stronger security, but an excessive deposit may increase vacancy.

Other protections include:

• employer guarantee;
• detailed inventory;
• insurance;
• pet-specific security;
• advance rent;
• careful tenant screening;
• periodic inspections.

Two months of deposit do not fully protect USD 15,000 of contents.

Management quality matters more in a furnished apartment

The manager should be able to:

• perform and document inspections;
• track warranties;
• manage suppliers and repairs;
• maintain the inventory;
• organise cleaning and turnover;
• retain invoices;
• distinguish age from tenant damage;
• disclose contractor markups or conflicts.

A manager who only collects rent will allow the contents to deteriorate until the apartment no longer achieves its expected premium.

Storage can eliminate the benefit of switching models

A strong tenant wants to use personal furniture. What happens to the owner's sofa, bed and dining set?

Options include:

• paid storage;
• transfer to another unit;
• sale;
• disposal;
• retaining selected items only.

Storage fees, transport and damage can cost more than the rent premium. Flexibility is higher where furnishings are modular, durable and easy to sell.

Part furnishing is often the strongest compromise

A practical package might include:

• fitted wardrobes;
• kitchen;
• air-conditioning;
• refrigerator and washing machine;
• curtains;
• bed frame, with mattress by agreement;
• limited essential furniture.

Advantages include:

• lower capital outlay;
• wider tenant pool;
• fewer damage disputes;
• easier replacement;
• flexibility for long-term residents.

The trade-off is that a professional arriving with two suitcases may select a fully ready alternative.

Appliances-only units can suit families

Families often own beds, sofas, dining furniture and children's items but still expect:

• installed kitchen;
• air-conditioning;
• refrigerator;
• washing machine;
• water heater;
• curtains.

This structure reduces the owner's investment while preserving immediate functionality. A longer tenancy may compensate for a lower headline rent.

Furniture improves photographs but may add little to sale price

A staged apartment is easier to understand and can photograph better. Yet the buyer may dislike the style or view the furniture as a removal cost.

The sale should distinguish:

• the real-estate price;
• the agreed value of included contents;
• the inventory;
• whether the seller will remove unwanted items.

Furniture can accelerate a sale without recovering its original cost.

An unfurnished unit also creates moving risk

Tenant-owned furniture brings its own costs:

• service-lift bookings;
• move deposits;
• scratches to floors and walls;
• bulky waste;
• items abandoned at move-out;
• delayed handover.

The lease and building rules should regulate moving, common-area protection and restoration of damage.

Corporate tenants often require a specific standard

A company may expect:

• specified bed size;
• sofa and dining group;
• work desk;
• television;
• kitchen appliances;
• blackout curtains;
• internet;
• rapid maintenance;
• sometimes a safe or other security feature.

Before furnishing for this segment, request the real corporate or relocation checklist. Do not spend money on items that do not affect approval.

Corporate tenants may pay more for reliable service rather than for decorative design.

A short ownership horizon weakens the case for expensive furnishing

A future owner-occupier often wants to choose the interior personally. Ageing furniture can make the apartment feel tired and create removal cost.

If the investment horizon is short and the likely buyer is an end user, expensive bespoke furnishing may have weak recovery prospects.

Management accounting and tax accounting are not the same

Rental income and any applicable Cambodian tax follow current rules. Furniture purchase, repair and replacement may be treated differently depending on whether the owner is an individual or a company.

A management reserve is not automatically a tax deduction. A company may need formal depreciation and expense records. Keep invoices and obtain advice for the owner's actual structure.

Worked comparison

Unfurnished model

• preparation: USD 1,500;
• rent: USD 600;
• vacancy: 1.5 months per year;
• annual collected rent: USD 6,300;
• no furniture replacement reserve;
• lower contents-management cost.

Furnished model

• furnishing: USD 9,000;
• rent: USD 750;
• vacancy: one month per year;
• annual collected rent: USD 8,250;
• replacement reserve: USD 1,200;
• additional management and repair: USD 300.

Additional annual result before finance and tax:

8,250 − 1,200 − 300 − 6,300 = USD 450

Additional initial investment compared with the unfurnished preparation is USD 7,500.

7,500 / 450 = 16.7 years

In this example, full furnishing is unattractive. A larger rent premium or stronger vacancy reduction would change the conclusion.

Choosing the model

Fully furnished works best when

• the target tenant is a relocating professional or company;
• demand for move-in-ready units is proven in the building;
• the rent premium is based on achieved leases;
• furnished units lease faster;
• management is competent;
• the owner has a long investment horizon;
• replacement reserves are funded.

Partly furnished works best when

• demand is mixed;
• the owner wants lower capital exposure;
• leases are long-term;
• appliances are expected by the market;
• flexibility matters.

Unfurnished works best when

• the target market is families or local long-term residents;
• tenants normally own furniture;
• the achievable rent premium is small;
• the holding period is short;
• the owner wants fewer contents-related disputes.

Common mistakes

• buying a developer package without specifications;
• calculating only the gross rent premium;
• failing to fund replacement;
• choosing a poor mattress;
• omitting a usable work area;
• providing unnecessary hotel-style contents for a long lease;
• using an incomplete inventory;
• failing to insure contents;
• installing an expensive interior in a weak building;
• paying storage for years;
• charging a tenant the full new price for an old item;
• assuming furniture adds its cost to the sale price;
• ignoring vacancy effects;
• furnishing only to the owner's personal taste.

Conclusion

The correct question is not simply whether a furnished apartment rents for more.

The owner should ask whether the furnishing creates enough additional net rent and vacancy reduction to cover the full cost of purchase, maintenance, insurance, replacement and disposal.

Move-in-ready apartments can be strong for relocating professionals and corporate housing in Phnom Penh. Long-term families and local tenants may prefer an appliances-only or partly furnished unit.

In many cases, a practical partial package creates broader demand and lower operating risk than either an empty shell or a hotel-style inventory.

This article is for general information and is not investment, tax, accounting or property-management advice. The furnishing decision should be based on current achieved rents and the actual tenant profile of the specific building.

Sources

1. Knight Frank Cambodia — Cambodia residential and relocation guides for 2026–2027, used for current Phnom Penh housing and relocation context.
2. Knight Frank Cambodia — Cambodia Real Estate Highlights H2 2025, used for current competitive-supply and price-sensitivity context.
3. JICA Legal and Judicial Development Project — Civil Code of Cambodia, lease provisions on use, care, repairs, ordinary wear, damage and return of property.
4. General Department of Taxation of Cambodia — Prakas No. 169 on Tax on Property Rental, listed as valid.
5. RICS — Property Agency and Management Principles effective from 1 January 2025, used for professional context on inventories, reporting, repairs and conflicts of interest.

Frequently asked

Does a furnished apartment always rent for more?

The advertised rent is often higher, but the premium depends on the area, building, tenant segment and furniture quality. Higher gross rent does not guarantee better net income after furnishing, maintenance and replacement.

How should the payback period for furniture be calculated?

Divide the total furnishing cost by the additional monthly net income after extra management, repairs, replacement reserves and any effect on vacancy. If furnishing costs USD 8,000 and adds only USD 100 net per month, the simple payback period is about 80 months.

What usually works best for a relocating foreign professional?

Many relocating professionals prefer a move-in-ready apartment with a bed, sofa, appliances, curtains, a proper desk and reliable internet. The exact package depends on the lease term, household and employer requirements.

Who repairs the furniture and appliances?

The lease and inventory should distinguish owner maintenance, ordinary wear, tenant-caused damage and consumables. The owner normally bears replacement caused by age, while the tenant may be responsible for proven damage caused by misuse or negligence.

Can an apartment be rented without furniture but with appliances?

Yes. An appliances-only or partly furnished model often suits families and long-term tenants while keeping the kitchen, air-conditioning, refrigerator and washing machine ready for use.