Property Refurbishment– What Landlords Need to Consider?
Amongst the property market surge in 2020, many landlords or aspiring property moguls took advantage of the Stamp Duty holiday to expand or start their property portfolios. Many would have snapped up fixer-uppers at a steal, which will now need refurbishing.
As many career-hardened landlords will know, property refurbishments can be costly and time consuming. This time and money, especially if you are reliant on generating income from your property, can put landlords off from undertaking vital refurbishment projects until they have the cash.
However, getting your property refurbishments completed before your first tenants move in is extremely important for your business. From driving revenue to lowering insurance premiums, here is why you need to get your refurbishments right from the start.
Why is property refurbishment so important to profitability?
Getting your investment property refurbished to a high standard is important if you plan on running a desirable and profitable property business. If you own a property portfolio, it is essential to your income generation that your properties are refurbished to a high standard.
First, a well-presented property with a good finish and decent insulation, heating and plumbing will attract more tenants. This in turn will enable you to charge a premium for your properties, resulting in higher revenues for your business.
Second, refurbishing properties allows you to address any structural issues with the property before you have tenants living it. Meaning your tenants will be safe and happy, likely staying in their lease for longer.
Third, having well cared for and refurbished properties with save you thousands of pounds in maintenance fees over the years. Dealing with issues in older properties during refurbishment is much more cost-effective in the long run.
Finally, the higher standard your properties are refurbished to, the lower your landlord insurance premiums will be. As well maintained, modern and high-spec properties are unlikely to have major incidents that require insurance. This will help you to save money and hopefully bring those premiums down year after year.
What do landlords need to consider when refurbishing properties?
There are several areas that landlords such consider when refurbishing properties. Considering the entire experience of your tenants and focussing on major structural concerns should be top priorities.
The Essentials
Get the most urgent rooms of a property up to code as quick as possible and to a high specification. This includes bathrooms and kitchens as these will likely be heavily used rooms.
Keep It Simple
Remember that the property is to be rented for profit and is not your home. Many first-time landlords get carried away on the details. Keep it high quality but simple and be dispassionate about your refurbishment.
Fix the Defects
If your property has structural issues or damp problems, fix these as a priority. No shiny new interior can compensate for horrible structural issues, fix these first for maximum profitability.
Remember the Value
Regardless of how much refurbishment you do, their will always be a value ceiling, that is a top market price for your property. Know when to stop spending to save money in the long run.