Property investors leave money on the table during property refurbishment, specifically when they start investing by not being able to think creatively.
However:
It is not that difficult to think about all the different options on paper and make most of each deal.
This post is an attempt to give a start to those creative juices flowing when you analyse a buy-to-let deal.
So:
End game of investment property has to start right from the point of picking a property to view.
- Have an initial idea if you are planning to view during your online research.
- When viewing the property
Pointers to think:
- Can the Buy To Let be converted from 2 bed to 3 bed?
- Is it possible to extend the property?
Here is a property that we have completed. In this article, we will discuss different options on how we are analysing the property renovation
Plan for the completed property:
Investment property that we completed is a two-bed terraced house, about 10-minute walk from Wigan train station.
Property refurbishment option 1: Refurb to plain 2 bed Buy to let Terraced house
Required Property renovation:
To check and understand work involved please check following articles:
- Property Refurbishment – Step By Step Series For Your Refurbishment Project
- How To Structure Schedule Of Works For Buy To Let Refurbishment?
Pros:
- It is a plain vanilla BTL refurb.
- Minimum or no involvement of the council if any for Building regs or planning.
Cons:
Return on investment may not be as good as a 3 bed.
Property refurbishment option 2a: Refurb to plain 3 bed Buy to let Terraced house
In this option, we can convert into 3 bed by splitting the master bedroom into two bedrooms.
Property renovation required:
Majority of changes done on the first floor.
In this option as shown in the picture above
- Remove chimney breasts to create more space in the rooms downstairs and bedrooms.
- Stud wall and doors created to split the master bedroom into two rooms.
- The load-bearing wall on the first floor is not modified.
- Double glazed window added to the newly created room.
- Plumbing will be required to connect with central heating.
Challenges?
- How to create rooms without disturbing the load-bearing wall?
- Add a new double-glazed window to the external wall. It means planning permission and building regs will be required.
- Will the room sizes be acceptable according to regulations?
- Building regs is required for the work to remove Chimney breasts.
- Agreements with neighbours is must as changes done to the party wall shared with the neighbours.
Pros:
- Will be able to take more money out as value of the property will be increased.
- Higher rent means higher ROI.
Cons:
- The additional capital required for the refurb
- Time will be required from the architect and council to get plans approved.
- Dependent on agreement with neighbours regarding the removal of chimney breasts.
Property refurbishment option 2b: Refurb to plain 3 bed Buy to let Terraced house
Converting a decent sized bathroom to a bedroom and add a bathroom to one of the bedrooms.
Property renovation required:
Majority of changes done on the first floor.
In this option as shown in the picture above
- Required plumbing for bathroom.
- Remove chimney breasts to create more space in the room’s downstairs and bedrooms.
- Stud wall is required to split the bedroom into to create a bathroom.
- Exhaust fan fitted in the bathroom.
- The load-bearing wall on the first floor is not modified.
- Plumbing will be required to connect with central heating in the bathroom.
Challenges?
- How to create rooms without disturbing the load-bearing wall?
- Add a new double-glazed window to the external wall. It means planning permission and building regs will be required.
- Will the room sizes be acceptable according to regulations?
- Building regs is required for the work to remove Chimney breasts.
- Agreements with neighbours is must as changes done to the party wall shared with the neighbours.
Pros:
- Planning permission is not required. Building regs is required as changes are all internal.
- Will be able to take more money out as value of the property will be increased.
- Higher rent means higher ROI.
Cons:
- Tenants or buyers may not prefer a bathroom without window.
- There will be tricky maintenance challenges if build and plumbing work is poor.
- The additional capital required for the refurb
- Dependent on agreement with neighbours regarding the removal of chimney breasts.
Conclusion:
Property investment is a game of thinking creatively and adding value to property and community. End goal is to create win win for all the parties involved property investor, vendor, tenant or buyer.
Ultimate Property Viewings System For Serious Investors
A cool guide that will give you a property viewings system that just works and a handy checklist of what you need to view in a property to assess your refurbishment properly.
