How Should a Landlord Refurbish a Rental Property?
One of the best ways to overcome the recent landlord tax relief cuts is to increase the amount of rent your property brings in.
That’s all very well, but in order to do this, either all the rents in the street will have had to miraculously increase in value in recent months.
Or you could add value to your own rental property. What we mean by that, is to refurbish to a high standard.
Convert the kitchen
You could, for instance, turn a large dining kitchen into a second bedroom and move the kitchen to the living room to make an open plan living room/kitchen or move the kitchen to an internal box room if there is one.
That would bring you in quite a bit of additional rent since you would then be able to advertise your one-bedroom property as a two-bedroom instead.
Add an extension
If your rental property is a house then another way to add a bedroom, office or second sitting room etc is to add an extension, or even convert the garage.
The former can be pricey but you will recoup the costs, not just in additional rent, but when you come to move on since the extra room will have added to the overall selling price of the property.
Not only that but there is also the added bonus that the capital expenditure will also be tax deductible – meaning you win on both counts!
Create a loft conversion
Then again, instead of going sideways or behind the house with the extension, you could always go ‘up’ by creating more living space in the loft.
Whatever you decide to do though, you need to put on your business hat first and foremost. As well as attracting a wealthier tenant, your additional room will probably entice him or her to stay longer, since they are perfectly comfortable with the space.
That certainly makes good economic sense, since you won’t be having to market for new tenants every six months or so.
Get the cash in the bank
Before going ahead, make sure you have the money for the extension beforehand. Taking out additional loans can really add up.
And, there’s no point starting a big refurbishment project and finding out you don’t have the funds to finish it.
That way you won’t be able to rent out the property and will suffer considerably from lost rental income.
Another pointer is not to overspend. It can be easy to go overboard with a new extension etc but getting pricier fittings than you normally would because they look great.
Just remember, you’re not going to be living there, and you have a refurbishment budget to stick to in order to make a decent rental profit. The more expensive your refurbishment, the longer it will take to pay off in rental income.
If you can’t afford to add another room to your rental property why not refurbish to a more minimal extent?
You could, for instance, get the garden landscaped, fit new doors throughout, improve the current heating system or put in a new kitchen or bathroom?
This costs less but could make a huge difference to tenants, and allow you to charge a bit more rent.
Get more hints and tips for landlords from our property experts here at Clan Gordon Letting Agents, Edinburgh.