Renovating a Rental Property

Every now and then, it’s a good idea to refresh and start renovating a rental property in order to stay ahead of the competition and attract new tenants – however, it’s important that every penny spent is justified by a return on investment. 

Renovation costs for rental property can be quite high so it’s important to consider a few things. What’s the budget? How much value will it add? And what are the best renovations for rental property? 

The right tweaks and changes can help you get the most out of your buy-to-let investment and if you spend the right amount at the outset, you’ll reap the financial rewards further down the line. This guide will help you find the best renovations to increase rent. It will highlight important things when considering renovation costs for rental property.

Where do I even start with the budget for renovating a rental property?

Renovating a rental property is about maths and finance above everything else. Rental yield, which refers to the rent a property can generate as a proportion of its value, is particularly important to consider in all aspects of a renovation. If something isn’t going to add value and generate more money in the long run, is there any point in doing it?

Although it’s vital to be sensible with money and budgets, there are some areas of a property that there’s just no point cutting costs on. This includes carpets and flooring, paints (opt for the reputable brands and splash out on anti-mould paint for bathrooms) and bathroom fittings.

With these, you’ll probably end up spending more in the long run if you go with the cheaper options, rather than splashing out from the outset with good quality materials.

Consider your time frames and schedule. After all, time is money and the longer you spend on your renovations between tenancies, the longer the property will be vacant which is ultimately a financial hit.

Schedule any work the day after the previous tenants have left and try to minimise the timescale as much as possible without rushing your chosen tradesmen.

And speaking of tradesmen, we recommend having a builder you trust to initially look over your property to make recommendations for improvements or upgrades throughout the property.

A professional opinion when renovating a rental property could be the difference between making much needed and beneficial changes to the property, and wasting your money on improvements that needn’t be undertaken for years to come. Sometimes it is imperative to have a professional working on the property, such as when you need to obtain a new EICR.

What are the best renovations for rental property?

These days, the rental market is notoriously competitive and landlords everywhere are looking for ways to give their property the edge, without breaking the bank. There are definitely a few easy and practical wins which could allow you to increase rent.

Although carpet is homely and cosy, it can be easily marked, damaged and worn – buy-to-let properties do tend to take a beating. How about opting for laminate flooring instead? It’s much easier to maintain, looks chic and contemporary and it’s fairly easy to install yourself, saving you money on labour. This will allow you to reduce the renovation costs for rental property.

Best renovations to increase rent

Renovating a rental property can give you an opportunity to increase the rent. This will help protect and grow your investment. Some changes – little or large – can provide a better product for the renters.

Kitchen and bathroom renovations for rental properties

It’s common knowledge in the world of renovations that the money-makers are a property’s kitchen and bathrooms so this is always a good place to start. They can however be the most costly rooms to renovate, so weigh up the pros and cons and be smart with the changes. 

Painting cupboard units is a great way to update and refresh a kitchen. Greys and greens are particularly popular at the moment and will be more hard-wearing than whites and light neutrals. No one likes a dark property, however, no one wants to be installing extra windows either as this is a costly job

Energy-efficient improvements for rental properties

In the modern world, there are often many opportunities to improve the energy efficiency of a building. This can include installing double/triple-glazing windows, adding loft and cavity wall insulations and installing energy-efficient appliances. There are a range of different schemes across the UK to help improve the energy efficiency of homes.

This can help you attract eco-conscious tenants and drastically reduce utility bills.

Adding bedrooms and habitable space

It’s possibly one of the most expensive ways of renovating a rental property, but it’s a change that will allow you to reap the rewards. You could do a loft conversion, add a conservatory, add an extension or change the property layout to create an extra bedroom. 

This could allow more people to rent your property, attract bigger families and even attract university students which can be highly profitable.

Garden renovations

Having an impressive outdoor space is one of the most desired features in modern times. There are lots of garden ideas which will allow your property to be summer-ready for tenants moving in.

Adding an outdoor garden bar with a decking area and lights could make your property very attractive. Fancy adding a hot tub? A pool table? Or a BBQ area? These are all features which will make your property stand out from the competition. Tenants are expected to do minor tasks to ensure the garden is kept tidy. However, landlords are responsible for major garden maintenance, improvements and repairs.

Decoration

Think about adding thoughtfully placed mirrors to create a trick of light, making the room feel brighter. Perhaps you could transform practical items within the property into head-turning design features to give your property the edge. 

For instance, install a dramatic light fixture in the kitchen or living area. Industrial-style lights with exposed filament bulbs look great and are sure to impress prospective tenants. Just remember to maintain a healthy balance between aesthetics and a sensible budget.

Unique selling point for rental properties

Perhaps your property has some kind of selling point that could be maximised. This could be something as simple as a cellar that could be transformed and marketed as a wine cellar. This can be done simply by fitting a few large wine racks to the wall. That way, something not particularly exciting becomes something unique and interesting – and that just might sway it for prospective tenants.

You could also look at turning your property into a ‘smart home’ by installing thermostats such as Nest, or smart door locks such as August to give your property the edge over others. Maybe you could fit an intelligent security system or some other special extras to entice interest.

Renovation costs for rental property

Renovation costs for rental property can be quite high. Make sure you use a reliable tradesperson to carry out the work to ensure it’s high quality. This should also prevent any corner-cutting, which could later increase costs. 

It’s worth doing some research and shopping around. Get a range of quotes from a variety of contractors to ensure you’re not being fleeced.

Rental renovations boil down to balance – aesthetics vs budget. You could blow thousands turning your rental property into a palace, but will your tenants treat it like a palace? It’s not their money that’s been invested into that luxurious carpet or expensive wallpaper. 

Keep it simple, fresh and clean. Make smart changes to add value and turn your property into the most desirable in the area. Once you’ve finished renovating a rental property, it’s important to work out your rental income changes.

Now that you’ve added value to your property, you need to make sure it’s protected. Have you taken out landlord insurance and landlord contents insurance? This will cover you in the event of fire, theft, loss of rent and more. With CIA Landlords, you can compare landlord insurance to find the best deal for your needs. To find out more, contact us or get a quote today.