Property Refurbishment – Thinking Creatively To Add Value To Property

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    property-refurbishment-creative-refurb

    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:

    1. Can the Buy To Let be converted from 2 bed to 3 bed?
    2. 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:

    Property refurbishment - Creative Refurb 1

    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:

    1. Property Refurbishment – Step By Step Series For Your Refurbishment Project
    2. 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 refurbishment - Creative Refurb 2

    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 refurbishment - Creative Refurb 3

    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.

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