Throughout my career in property I have bought many properties that have needed refurbishments doing to get them to a suitable standard for letting. These refurbishments have required things doing such as new kitchens, bathrooms, décor and other cosmetic work. However I do not tend to touch anything with structural issues. I personally believe that especially when you are just starting out you should stay away from anything structural if you do not have the experience. If you happen to be experienced in this field or know anyone who is then this would be fine, however I have seen people new to property take on major structural refurbishments in the past. If you do not have the relevant experience then this can end up costing you a lot of money, time and heartache.
When buying buy to let properties I always find it best to look for properties that may need smaller refurbishments doing. This can mean décor, new kitchen, new bathroom suite and new fuse board as an example. I personally would not be looking for any more than this for two reasons. Firstly cost, as this would not cost tens of thousands of pounds but would still add value to the property, alongside a good bargaining tool when dealing with the agent or vendor. Secondly time scales – the last thing you want when renting property out, especially at the start, is to take on a big refurbishment that takes months, and leaves your property empty with no rent coming in. Remember that the day you complete on the property the mortgage payments will start, and you want to be able to refurbish the property to the standard required, as quickly as possible, so that a tenant can move in and you can begin to receive rent.
If you are looking to flip properties on the other hand, then often buying very distressed properties and renovating them to add value and sell can be very lucrative. However this is a different skill set and if this is what you want to do, then it is important to research this well. You will often be looking to renovate a property to a higher standard if your plan is to sell on for profit. In this case you will need to look at the refurbishment project as a whole, and look at what time it will take and money it will cost. I would personally say though that if you are starting out, then looking for a smaller project would be vital. If you were to take on a very rundown property, with structural issues for example, then you need to make sure that you are experienced with this, or have somebody with experience who can guide you in the right direction. This is vital as otherwise you could end up spending a lot of money you did not plan for, and it could take a long time to do – potentially eating in to, or completely erode your property investment profit.
- Peter Iwaniszewski