If you are thinking of becoming a landlord, or maybe you have a portfolio already and you are looking at adding more properties, then one of the best strategies for entering the market is to find a house in a state of disrepair and fix it up.
This involves buying a run down house, carrying out the repairs quickly, increasing the value of the property and then renting it out.
It’s becoming more popular to totally refurbish a property, extend the loft, build an extension and add extra bedrooms to increase rental income.
Planning is key
Before you undertake any refurbishment work, you have to make sure you plan ahead, you need a project plan in place to make sure you are working to a timeline and a budget.
Your project plan needs to include all of the tasks you have organised for each room, what order you are going to carry them out, and how much you plan on spending for each room
Budgeting is extremely important, especially on room-to-room basis, you would be amazed at the amount of people who don’t do this correctly, and end up over extending themselves financially.
If you budget by room, then once you have completed one, then you know how much you have spent and you can control your budget more rigidly.
The typical scenario for bad planning involves starting with a budget in mind, then going to B&Q and getting excited when you see the additional fittings you can have, so you choose the most expensive taps, and worktops etc.
The next thing you know you are 5 grand over budget, and you have eaten into your potential profit from the refurb.
Worst case scenario, you run out of money and can’t complete the project, leaving the property standing empty with no rental income.
This is why good planning is key, and sticking to your budget even more so.
Its very important to organise tasks in order, and prioritise key elements such as structural defects to make sure you get the big jobs out the way first, as they tend to be the most time consuming and costly.
Now for the décor
Once all the big messy jobs are out of the way its time to add a bit of sparkle to the property.
Making the house look nice on the inside will not only add value to the property, but it increases the chances of renting out the property quicker for a higher rental value.
Fittings and furniture should be seen as an investment, as these are the eye catching elements of your property that make the house more appealing to tenants.
The thing to keep in mind here is that you are not decorating the house for you, so you have to be more neutral in your choice of colours and fittings.
What appeals to you may not necessarily appeal to your prospective tenants, so if you have a particular favourite colour, you best think twice about doing the whole house just to satisfy your own tastes.
Fixtures and fittings is the most common area for people to go over budget. This is when people get over excited as the walk around B&Q, and pay over budget for swan neck taps, and expensive light fittings.
You have to keep in mind that you will have to replace these if a tenant damages them, so find the middle ground where you can get nice looking fittings that don’t break the bank, and stay within your budget.
Finding the right tradesman
To carry out a refurbishment to a high standard means you will have to find good tradesman, electrics and gas in particular require certified professionals to sign off any work, and you will need a gas safety certificate before you can rent out a property.
Finding good reliable tradesman can be a skill in itself, so make sure you take advice from friends and family, ask around to see if you know anyone who has had work carried out recently, who where their contractor? How much did they cost?
Asking these questions and doing your homework before you undertake any work can save you a lot of time and money in the long run.
Ideally it would be best to use a good refurbishment company from Liverpool to carry out the work, a good team can take care of everything for you and complete the work quickly, and to a high standard.
So your newly refurbished property can be let out to the right tenant.
If you are thinking about doing a renovation, or becoming a landlord and need advice, then the staff at James Kristian are on hand to discuss the process with you, and we can even recommend some good reliable tradesman to help you on your way.