Landlords that regularly refurbish could get a better return on investment

A new study from InterBay Commercial has suggested that regularly refurbishing a lettings property is a good all-round strategy. We have of course, written before about the necessity to act on repairs and maintenance needs quickly to avoid any costly damage to a property. But what’s up for discussion here, is investment into improving the property, such as fitting a new kitchen or bathroom, or upgrading the windows and doors, fitting new carpets or giving the place a thorough repaint, woodwork included.

In between tenancies, this type of work does obviously improve the property’s appeal during the viewings process, and thus helps to minimise void periods. It’ll help the property stand up to local competition since the overall quality of lettings stock in the UK is improving now that landlords are paying greater attention to providing homes rather than just “accommodation”. It also means that the property will better withstand wear and tear during tenancies and that your tenants are more likely to take care of the property. According to Property Wire, the percentage of “non-decent” homes in the lettings market has almost halved over the last decade meaning that clean, smart homes are what's in demand. 

There is an investment strategy underlying the improvements too. The research found that spending the typical £12000 on renovations can increase the rental yield by around 8%, which equates to around an extra £81 per month, and where landlords spent roughly £5000 to £1000 on refreshing, the property value rose by an average £13000.

The research also considered larger refurbishments such as extensions and loft conversions and found that a spend of £40,000 would return on average a property value increase of £96,000. This is good news in the current economical climate when it is cheap to borrow funds for such improvements.

However, every location does have its own ceiling price and there is always a tipping point where spending excessively on renovations won’t be offset with an increase in value. If you’re unsure whether a renovation is worthwhile to increase both property value and rent, then do speak to our lettings team, who will be happy to offer you some friendly advice on what works well in our local areas of Brighton, Hove, Shoreham, Worthing, Lewes and Seaford. You can find out more about our services to Landlords here.