If you’re looking to make money by renovating a property, there are some important factors to consider. So, how do you refurb and rent a property in way that will achieve a healthy level of profit? It’s all about understanding your numbers and having a skilled team to help you carry out the renovation and any modernisations. In this guide, we explain what you need to know, so you can avoid making costly mistakes.

CAN YOU MAKE MONEY FROM PROPERTY DEVELOPMENT?

There are different ways that landlords and aspiring property investors can make money from developing a rental property when done correctly. Your aim should be to increase the property value and prove to lenders that the new value justifies any refinancing loan amount.

When calculating your investment, you’ll need to include the purchase price (if applicable), stamp duty, legal fees, refurbishment costs, and other expenses. Set a realistic budget, along with some contingency costs. Before you rent your property, you’ll also need to get to grips with the new Renters’ Rights Bill that’s due to come into force.

Here are seven things to consider when refurbing a property for rental:

1. Only focus on upgrades that add real value - for example, a modern kitchen or bathroom, energy efficiency improvements, and curb appeal. Some properties benefit from opening up rooms or converting areas into extra rooms.
2. Create a detailed schedule of works and include any old fittings that need stripping out and any unwanted structures that need removing. Address any structural issues and carry out essential repairs.
3. Start with “first-fix” works - for example, plumbing and electrics behind wall surfaces. Once these are done, some areas might need re-plastering, re-flooring, and decorating.
4. Next, look at “second-fix” works, such as kitchen, bathroom or socket installations.
5. Check any snagging - In the final stage of your refurbishment, fix minor issues and carry out a thorough clean.
6. Make sure all works are fully compliant with UK building regulations. Install smoke alarms and carbon monoxide detectors.
7. Arrange health and safety checks and obtain the necessary certificates for Gas Safety, an Electrical Installation Condition Report (EICR), and an EPC (Energy Performance Certificate).

For more guidance, read Our Guide: Property Development For Beginners.

YOUR PROPERTY DEVELOPMENT EXPERTS

To conclude, to achieve a good return on investment (ROI) on refurbing and renting a property, you need to know your numbers. Without the right knowledge or experience, it’s easy to go over budget. You need a skilled and reliable team of tradespeople who you can trust to carry out your refurbishment works as cost-effectively as possible. Because when the numbers don’t add up, neither will your profits.

At RJJ Developments, our proven method is to refurb, rent and refinance properties to ensure lucrative returns on property investments. We have decades of combined knowledge, skills and expertise to source suitable properties.

Are you a landlord looking to make more income from your property or portfolio? Why not talk to us about ways to improve your profitability? We might also be able to offer finance options that you haven’t considered. If you’re at the start of your property investment journey and you’re interested in partnering with us, Download our Investor Pack.

If you have any questions about this article or you would like a chat about property investing, please get in touch.

Thank you for reading our latest blog, How Do You Refurb and Rent a Property?

RJJ Development