That should go without saying, but we are all aware of horror stories that blight the rental sector. As more and more people rent properties, especially in Nottingham, the industry must continue to keep a focus on ensuring properties are fit for purpose and as a regulated letting agent, I am working with the sector regulator ARLA Propertymark to support Government calls for mandatory regulation of all letting agents.
For those thousands of excellent landlords across the country, funding for repairs will be included in their budget, as they want a strong rental demand for their properties and happy tenants.
In addition, we advise some of our clients to undertake more widespread refurbishments to their property as, not only will this ensure their tenant is satisfied, but a well considered upgrade may also add capital value to their ‘asset’, reduce potential void periods and increase potential returns through increased rental income whilst also reducing maintenance costs.
Sounds like a win win situation for landlords but we also recommend that careful research is undertaken before hammers are taken to walls or paint brushes are brandished. In our experience the small-scale property investors, often the accidental landlords who’ve inherited a property and are waiting for market values to rise, can become over-enthusiastic with upgrades to their buy to let. Their lack of business acumen can reduce the profitability of their asset.
To maximise on the value of renovating a buy-to-let property at Kingswood we recommend the following steps are taken.
Adding Impact – £0Whilst there are no guarantees, in general in my 13 years in the property letting market, I’ve had the pleasure of seeing first-hand how landlords transform their properties to meet the needs of tenants across the market. Budgets may vary but there is a common approach to targeting key areas in any property.
Planning and prioritising is key so that void times are reduced and the work is completed as soon as possible. It’s also important to get the basics right, so that, for example, safety and building worthiness issues are addressed before the budget is spent on designer fixtures.
The two areas which make the most impact on potential tenants are the kitchen and the bathroom. These areas usually provide the greatest “wow” factor and if room upgrades are being considered, are the best place to start.
Costs for this kind of project will vary tremendously according to the target renter but as a minimum, we know that all tenants expect both rooms to be clean and in good order. A new kitchen or bathroom should give a return on investment of around 10% because you can expect to have to replace it every ten years.
Other areas which prospective tenants comment on are:
If the above areas are improved upon, not necessarily by replacing, as often a thorough clean can suffice, it can result in increased yields for landlords. For example, a recent refurbishment overseen by us in Nottingham saw a project of replacing the kitchen, bathroom, flooring and decorations totalling £37,000. This has increased the rental income for out client by £3100 per month/ £31200 per year. We also managed a similar schedule refurbishment of 5 flats in the same block which all needed the same general overall to improve their standard which in turn increased the rental income by £3100 per month per flat after a similar amount of expenditure was spent per flat.
In my experience ensuring your property is well maintained is essential if you want to succeed in property investment. Your ‘asset’ will be sustainable, the tenancy should run more smoothly and you can increase your rental income, and capital value. These are all significant factors in helping to secure the long term viability of your investment.
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For further advice regarding this, please do not hesitate to contact us.
Adam Kingswood MARLA
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If you have a question or would like any other details please just get in touch.
