More often than not, flats will require at least minor improvements in order to prepare them for rental.
This may involve quick fixes like simple redecoration or tiling to perhaps a more comprehensive refurbishment requiring new kitchens and bathrooms.
When sourcing properties that require work, we will always supply clients with an estimate of what we calculate the costs of any works may be, well before they make an offer on a property. We have formed a team of fantastic tradesmen and building contractors that we trust to deliver good value for money and quick turnaround at high quality.
It is all too easy to 'throw' money at an investment property when often it's not always necessary. In order to protect net yield we will often encourage changing individual things like tiling in a bathroom, or painting kitchen cabinets and replacing white goods rather than ripping something out thats of perfectly good quality.
A lot comes down to identifying the ceiling rental price and making sure that you don't overspend on something that won't necessarily bring you more rent, whilst ensuring that the quality is always high.
Buchanan Street, Leith, 1 Bed Top Floor Flat - Purchased May 2021
LINK to original brochure:
Property Bee sourced this well located property for an investor for £137,000, £3000k below Home Report valuation. This in a market where properties are currently selling 5-10% over Home report value and average prices are £160-170k for similar properties. The project aim was to refurb the flat to a level that resulted in over £800pm for the property and with a strict budget that resulted in a gross yield over the 6% mark, rather than needlessly change everything.
The property had a grade '3' in the home report under windows which had - as a result - put many buyer off. However as these are 'sash and case' windows, they can often be refurbished and our sash and case specialist was able to confirm in writing that this could be fixed very easily, hence satisfying the buyer's mortgage provider and enabling the purchase.
The flat had used as a buy-to-let property but was in need of redecoration and part renovation. The previous owners had not been letting the property with appropriate legal rental certifications and the flat required rewiring to satisfy EICR regulations plus new linked smoke alarms to be fitted.
The EPC (Energy Performance Certificate) was of 'F' grade hence not of a legal standard to let. Consultation with expert recommended at least new high efficiency electric heaters, 27mm loft insulation and 100% energy efficient lighting to get it up to a D rating.
Client required to work within an extremely tight budget and so only absolutely necessary alterations were to be made which was decided would be mainly the windows refurb, kitchen partition removed and new fully fitted kitchen installed and re-decoration throughout - but retaining existing wall coverings where possible. Remedial work was also required to even out unstable flooring in certain parts of the property, plus a problem beneath the shower tray in the shower room.
The client was estimated a cost of £14,000 for the works, of which £1000 acted as an inevitable contingency. On commencement of the works, the team indeed encountered various hidden plumbing and electrical problems which meant that we would rely on the pre-agreed contingency fund. as is invariably the case on most renovations.
Pictures on brochures rarely tell you the whole story and this flat was very much one to not look too closely at!
Poor electrics throughout flat meant around £1200 required to be budgeted. We managed to bring the electrics cost in below budget.
On closer inspection some walls were in very poor condition and needed stripped and lined
Old rotten unstable floor levelled and shower tray secured and re-sealed.
The old stud partition between Lounge and Kitchen was removed to create a large open plan kitchen/living room and brand new Howdens kitchen installed, salvaging the old extractor fan and washing machine to cut costs.
Results:
With the kitchen partition removed, the living area is much more open and spacious. Decorated in neutral grey to match the dove grey kitchen, with (surprisingly affordable) contemporary high efficiency gloss black heating the property has been transformed from a very tired low rent investment into an aspirational space which has been conformed by agents to be marketed at £825pm and returning a gross yield after refurbishment of an impressive 6.6%
BEFORE
AFTER
Simple fixes have dramatically improved the bathroom and shower room and all internal walls have clean lines in contrast to torn wallpaper and textured coverings. Any walls that didn't absolutely require improving were simply painted to avoid unnecessary costs.
Windows are completely refurbished and draft proofed and electrics replaced up to EICR pass standard.
Property Bee also oversaw furnishing and dressing of the property. To save costs we loaned client rug and lamp in living space and all soft furnishings and plants to help really 'sell' the property top prospective tenants.