5 helpful tips on getting the best out of your refurbishment in Clapham
Any astute investor will know that one of the ways to make a profit from property is to add value by improving the property. Often times investors will look to significantly improve the property before they offer it back to the market for rent. After all, there should be some "sweat money" factored into the purchase price. So if you are buying right a £400,000 should be worth significantly more than £420,000 if you are looking to spend £20,000 on improvements.
So here's 5 improvements that will add the most value to your next refurbishment (weigh up the costs vs the extra you will achieve in rent though, each project is different):
1. Redecoration - nobody wants a tired looking property. The attraction of shiny new builds is real for tenants. The kitchens, bathrooms and all the finishes are brand new. They however do not present the best investments for landlords. If you are looking for better returns a simple coat of paint with perhaps a feature wall thrown in will work miracles. Go ahead and match some of the soft furnishings too, you'll see what difference it makes in rent. Here's an example of a bedroom I did recently. See how just adding a neutral coat of paint and tying the curtains with a simple touch light gives it a slight edge?
2. Square footage. Can you add or re-purpose the space? This is key really. An investor client of mine recently purchased a house and by going into the loft he was able to add another two bedrooms and a bathroom (and achieve an extra £20,000 in rent). The result was that the loft alone yielded a 40% return on his money! If the floor space can't be increased can it be repurposed? For example I am creating an open-plan living/kitchen in one of my latest additions. This will add another bedroom to the property and thus increasing the overall rent by roughly 1/3. The kitchen was due to be replaced anyway, so my only additional cost will be plumbing and a letter to the freeholder for permission.
3. Kitchens and bathrooms. These are absolutely crucial for successful letting. With kitchens and bathrooms available at rock bottom prices these days there is absolutely no reason your property should not have nice, modern kitchens and bathrooms. If you would like me to help you get the very best in discounts then do get in touch. Here is a picture of the next kitchen going into one of my properties and I sourced this for under £1000 (add £800 for all the appliances).
4. Flooring. old, tired carpets are a no-no in any property, let alone if you are looking to attract professional tenants to your newly acquired property. Durability is the key of course, but it's got to look good. No point therefore in going for the cheapest, thinnest carpets - this is an investment. Have you considered something more hard wearing for communal areas and limiting carpets to the bedrooms? Wood or tiles work miracles in hallways and living rooms (or tiling that looks like wood, I'm trialling this myself so stay tuned for more on this to see how it works out - I'm optimistic). You should be aiming for £15psqm. Cheap doesn't equal nice though, so beware to choose something nice.
5. Your builder. This is key to your overall success. Having a good relationship with your builder is key. After all, it's him doing all the hard work, not you. Draw up a schedule of works - everything that you want doing. Write it down and even have it to hand to give to him at the quote stage. This will make things easier as nothing can be forgotten! Furthermore payment terms are to be laid down in writing. X% in advance if he is sourcing materials, but labour can be done weekly in arrears. Remember to allow time for him to fix any snagging, and define a time period. For example if you are supplying the materials and it's a 4 week job expect to pay him 25% each week bar the last week where you hold back 10% for a period of say 2 weeks in case of any "snags," or things that come up after he's walked out the door. If there is a particular element you are not happy with, reduce the payment accordingly, but do not withhold all the money - after all 90% of it will be done to satisfaction.
If you are looking to purchase a property with letting in mind and you would like an expert opinion then by all means get in touch. Perhaps there is an angle that you haven't thought of that could yield you better returns. Just start the conversation via email. You can also have a look at some of my recent projects here and here. Are you interested in having me source high yielding investments for you? Manage your refurbishment projects? Help you get the very best trade discounts? It's time you got in touch.