The UK property market continues to be ripe with opportunity. Whilst the heady days of double digit growth are behind us (perhaps excepting London) there is still plenty of profit available for investors willing to put in the hard graft. Buy to let is a popular avenue for property investment, and as a passive investment is a perfectly safe and sensible option. Returns are usually in the 3-6% bracket once costs have been accounted for, and it requires little input on the behalf of the investor. However, if the bottom line is what you’re chasing, renovation can boost your income and the value of your house. It will require time and effort, but done right it should increase your income and your properties value.
A small caveat. what I’m about to write shouldn’t be taken as a given for all types of properties. For example, premium family homes will not benefit from what I propose, because they are generally large spaces inhabited by fewer people who are willing to pay a premium for that fact. But it’s unusual to own these as a buy-to-let. Rather, what I propose specifically benefits those who rent to students and sharers.
Space is king in the buy-to-let game. Look at the floorplan of your property. Is there anyway that you could make an extra bedroom? Students and sharers pay by the bedroom, so if you have a three bedroom flat and you can make it into a four bedroom flat, you will increase your revenue by roughly one third of what the tenants were previously paying. If that room is worth an extra one hundred pounds a week, that means you’ll make an extra £5200 in a year.
Where can you find that space? First consider the kitchen. Does your flat or house have a kitchen and a separate living room? If so, consider moving one into the other. If you move the kitchen into the living room, or vice versa and create a living room/kitchen space, you can create an extra bedroom in the space you’ve freed up. This works particularly well when the kitchen is adjacent to a large living room- then you can knock down the wall between the kitchen and living room, and put up a wall deeper into the old living room, creating an extra bedroom. This way there’s no expense in moving the kitchen, and all it costs is the removal of one wall, the fitting of a new one, and replastering and painting.
Another easy way to maximise space is to put up walls where they have been removed by previous owners. Many terraced houses have had the front room knocked through to the back room to create one large living space. That’s all very well for families, but if your focus is on sharers then putting the wall back up creates an extra bedroom, whilst still giving tenants a living area. These tips work especially well with properties which are likely to be bought by other buy-to-let investors. They’ll be looking at return, so increasing the rental value increases the value of your property.