Buying, renovating and potentially furnishing a property is an expensive process and it’s natural to want to keep costs as low as possible, particularly if you are trying to make a limited amount of capital stretch far. However, as legions of landlords before you have learned, if you spend the right amount at the outset, it will pay dividends down the line. Taking the time to analyse a refurbishment properly and really understanding not only what needs to be done, but also what should be done, can save you a lot of problems and expense over the coming years.
Every time something needs repairing, refreshing or upgrading in the future, you will have to either inconvenience tenants or, what’s more likely, keep the property vacant while the work is carried out. That means losing valuable rental income on top of the cost of the work, so it’s vital to plan ahead well and do as much as you can to ensure you don’t incur any more maintenance costs than necessary.
The first thing to understand is what works and costs are considered ‘normal’ over the lifetime of your investment. As a guide:
Ideally, what you need to insulate yourself against is having to do more than minor redecoration in the first five years and any major works within the first ten, unless you intend to make part of your money from property renovation.
Initially, make sure you address any issues highlighted by your surveyor. Also, ask a builder who’s experienced in buy to let renovations to advise what should be done to minimise the chance of any further work needing to be carried out on the fabric of the property over the next 10-15 years. For example, if there is plasterwork on the walls that currently only needs patching, it may be more cost-effective to replaster the entire wall to avoid further patching in five years’ time.
One of the biggest problems highlighted by the English Housing Survey in rental properties is damp and mould caused by condensation, so when you’re refurbishing and bearing in mind make sure:
- The cause of any existing damp or mould is correctly identified. You can’t just ‘paint over’ or ‘wash’ off damp and mould and expect the problem to be solved.
- You have a specialist contractor inspect the damp course and renew it if necessary with guarantees and warranties that survive the company going bust.
- Cooker hoods and bathroom and kitchen extractor fans are good quality and vented to the outside
- Double-glazed windows have trickle vents to let the air circulate.
- Tenants can afford the rent and to heat the home
From April 2018 it will be illegal to let a property rated F or G on the EPC and this is something that may well be tightened up again in the future. It’s therefore advisable to do as much as you can to get the energy rating up to D or above to give you the best chance of not having to carry out any further energy efficiency improvement works in the next five to ten years.
An additional benefit of a low utility cost rental for a landlord is it should give the tenant more disposable income to help support any increases in rent and avoid rent arrears should utility costs continue to rise.
Have an electrician carry out a full domestic installation check and if there’s anything that they think might need upgrading within the next 10 years, it might be worth doing it at the initial refurbishment stage, depending on how disruptive the work might be. Then have a gas engineer flush the heating system and service the boiler. It’s important to tell these contractors how many and what kind of tenants you plan to have in the property, so they can estimate the ‘weight’ of usage and ensure the systems are robust enough. This is particularly important if you plan to let the property as a House in Multiple Occupation (HMO), as you will almost certainly need a specific type of boiler.
Fittings and furnishings need to be hard wearing, modern and visually appealing and must be appropriate for your target tenant. A good local lettings agent should be able to advise you on this, but here are some tips:
- Go for simple, unfussy fittings and don’t be tempted to squeeze too much in – the property needs to be easy to keep clean and looking good for as long as possible
- When fitting WCs, showers, boilers, etc., make sure the workings are easily accessible for repairs, i.e. don’t be tempted to conceal cisterns and shower units behind sealed walls or tiles
- Invest in good, strong hinges for kitchen cupboards, as they get a lot of use and will look old before their time if the hinges fail. Ideally ensure you can just change the doors and worktops when needed, not the whole kitchen
- Choose carpets that don’t show dirt and stains easily, or choose a hard wearing wooden/wood-effect floor, if allowed, in the property
- Paint the whole property in the same neutral colour, so that it’s easy to refresh; use hard-wearing gloss for woodwork and moisture-resistant paint for kitchens and bathrooms.
It may sound obvious, but do make sure that all the contractors you use are qualified to carry out the work and belong to a relevant trade body or association for their trade. Always obtain guarantees/warranties for work and hold back 10% of their final bill until you are happy that the work has been finished to your satisfaction. The work you will be undertaking will almost certainly have to comply with building regulations as well as letting laws, so do liaise with your local council before you start the renovation to make sure you and your contractors are clear on what needs to be done and there’s no chance you’ll be required to re-do any work at a later date.
Finally, once your buy to let is up and running, remember to schedule regular maintenance checks either yourself or via an agents period visits and tackle works before they become big problems. That way you’ll attract and keep the best tenants, protect the capital of the property and ensure you don’t spend more than you need to.
Top tips for a buy to let renovation:
- Address any issues brought up on the survey – major and minor
- Ensure any trades people who work on the property are experienced in renovation to letting legal standards
- Have a builder look over the property to make recommendations for advisable improvements or upgrades
- Have a building inspector from the local council visit the property before any work begins to advise what building regulations will need to be satisfied
- Speak to your local Environmental Housing Officer about the key issues they look for when assessing a rental property for being safely let
- Always use tradespeople who are registered with their relevant trade body, are properly insured and will provide you with guarantees/warranties for their work, even if they go bust, close their business
- Make sure the fabric of the building is sound before you start plastering, decorating and fitting out
- Create a comprehensive plan of works so that you can budget properly and nothing gets overlooked or forgotten
- Have a full inspection of the electrics and plumbing and make sure the systems are appropriate for the number of tenants that will be living there
- Make the mechanics of fittings easily accessible and not concealed behind tiles or walls, this allows for faster and more efficient fixes if something goes wrong
To read more tips on investing in property, read our ‘Are you investing or simply keeping your fingers crossed’ article, or to speak to a buy-to-let mortgage adviser, please contact us today.