Article: Best and worst upgrades to your Residential Property Investment
Upgrading your residential investments can get pricy, but do these upgrades really increase the value of your property? Recent studies claim British people spend £83billion pounds per year on refurbishments for their properties.
We see a lot of clients coming to us for finance for their residential property investments. There are some common ways to boost the value of your Residential Investment Property, and we have four of the top suggestions here, plus three big mistakes to avoid! These are general ideas; each property is specific and should be considered on its best merits.
Upgrade the kitchen (Up to 20% increase in value) – It is one of the most important areas of the house, and a deal breaker for many so it must be a first smart investment. Having a new, upgraded kitchen can give that immediate impressive appearance – Even only upgrading worktops and cupboards can bring a healthy boost!
Convert the Loft into an office (Up to 15% increase in value) – Working from home is here to stay, and for many people looking to rent another house, having an office or workspace area can significantly increase the property’s value – Especially in post-Covid times!
Increase natural light (Up to 8% increase in value) – Natural light has always been in demand, and even more so post COVID, as it makes rooms feel more spacious and brighter – The time spent at home has made people change their mind in what to look for in a property.
Add an En-suite bathroom (Up to 5% increase in value) – There is also a growing demand for built-in bathrooms, so this can help to maximise your return on your rental property.
What though might not be worth it? Or might have less potential to add the value you are looking for?
Converting a garage – often this does not appeal to renters, as many people find the space to park their car as important. For something that costs over £5,000, it might not help to increase your rental income for those that prefer the parking. Others will prefer the living space, there’s no one solution.
Upgrading the utilities – such as a boiler, electrical wiring, or new plumbing are considered house maintenance and not necessarily value-adding upgrades Possible expenses can get to over £10,000 and it is unlikely that will add much to the total possible rental income (unless of course anything is broken in which case you will need to upgrade regardless of cost)
Interior decorative trends – these can certainly make your property look very stylish, but it does not guarantee that your would-be renters will like your taste as much as you do! Interior fashions do not really last very long, and green bathrooms are not for everyone, especially as potential expenditure can be over £3,000.
As every residential property owner wants to receive the best possible monthly rental income, investing in the interiors should be well-thought and upgrades should also be considered in terms of their financial impact. We often see that whilst seasoned developers and property owners have their system in place that works, others who are newer to these markets can get more carried away. Take a step back and see what savings can be made.
Henry Ejdelbaum, MD, comments “It’s always worth thinking about the positive impact a refurbishment can have both for the short-term and the long-term. Short-term, the property value will increase, and in the long-term, there will be more income generated. “
Once you know what improvements you want to make to your residential property investment, speak to an expert to help you get finance to make the improvements.
ASC was established over 50 years ago; we are independent business finance brokers. We have developed a successful record of accomplishment helping businesses across the UK secure finance by removing the hurdles put in their paths. We have extensive knowledge of the financial products available from lenders and can approach them to help businesses find the right finance for their projects.
Our local directors are highly experienced and have a strong commercial background which will help your business increase their chances in securing finance. ASC enables businesses to have more free time to focus on and develop their business.
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