This is very dependent upon the situation. The type of property investment you have will determine whether or not you need to furnish it.

Single Lets

If you’ve got a single let and you’re going to get a family to move in, they will likely have children and want to make the house feel like home. So they will probably want to bring their own stuff, meaning you wouldn’t need to furnish that location. I’d even recommend giving them some flexibility when it comes to decorating the property (with the caveat that it has to be returned to it’s original conditions). As all of this stacks up to creating an emotional attachment to the property and reduces your tenant turn over. Plus they will probably do a better job of keeping the property in a good condition because it feels like their home.
Alternatively if you’ve got a flat in the center of a city, you’re probably going to want to furnish it. Typically in flats people are a little more mobile, maybe their business men or business women, they’re moving a lot, they probably don’t have a lot of stuff. So furnishing the property will go in your favour, even if all you do is put in the bare minimum (like white goods etc). Something that I’ve recently considered, is giving tenants the option. So having it dressed for viewings, so that tenants can virtually move in. Then giving them the option of renting the internal furnishings. The only thing you have to consider is that they say “no”, as you’ll need storage space or another empty property to go and put the stuff in for the next rental.
Remember though, you go the full hog and deck it out, you need to make sure to leave a little bit of space for tenants to add their own flare. Leave some space for them to put some pictures up on the walls or to add some of their own decorations, it will make them feel like they’re living at home in their own space and they’ll stay longer. Again building emotional attachment with the property.

Multi-Lets

People are renting rooms because they are either very mobile (work contracts etc) or they don’t have the money to rent a full residence. Which means they likely don’t have the capital to buy/transport their own furnishings. It is almost always expected that you will furnish these properties. (You can always give the option as above, for tenants to rent the furnishings).
If you want to generate a better capital I would recommend decorating the place well, it’s a mind boggling fact that if you put some little trinkets up and some pictures on the wall, you’re rent will go up considerably and the turnover rate of tenants will drop too, compared to leaving it empty. Again this is because it builds an emotional connection with the property, tenants feel proud of calling it their home and becomes a place that they enjoy to be rather than a place they just need to be. If it’s just empty and cold, sure it looks good on paper because you don’t have to spend as much money, but people wont stay there long term and they won’t hesitate to leave either. 
All of these things add up to you generating a better capital return long term by expending a little bit of expense at the start. Why would you not want to do that?
All of these things add up to you generating a better capital by expending a little bit of expense at the start. Why would you not want to do that? Furnishing is referred to as “dressing the property”, you have to dress it up, even in an serviced accommodation unit thats more like a hotel business because people are only staying the night or a few nights time. You still want to make people feel like they can relax there, because that is how you get repeat bookings (without the huge fee’s charged by booking portals – kerching).  Also having professional photos taken and making the place look beautiful online will also allow you to charge a little bit extra for your rent which makes your margins a lot nicer, prevents damage to the property, all of those great things.