Hi, Peter Jones, author, property investor, ex-chartered surveyor.
In this short video I want to talk about 4 reasons why I always refurbish or renovate my buy to let investment properties.
Now, the first 3 reasons you might think ‘yeah, ok, that makes a lot of sense’ but it is probably the 4th reason that’s the most interesting and the most important, so stick with me on this because, hopefully, if you don’t know about this this is going to make a massive difference to the way you do your property investing.
So, the first reason why I would want to refurbish or renovate one of my buy to let investment properties is because I want to make it wind and water tight, in other words I’m going to repair it, and make sure it’s in sound condition
And I’m also going to bring it up to current regulations so it’s safe. So, I’ll attend to things like the gas, if that needs to be sorted out, or the electrics if that needs to be sorted out, or think about the insulation if I need to improve the EPC.
Don’t forget. Under current Regs the Government require rental property to be a minimum of E on the EPC (Energy Efficiency Certificate).
But they are considering raising it to C from April 2023!
So, that’s reason number 1.
Reason number 2 is I want to improve the property to make it so attractive to tenants that I will minimise the void periods that I have with the property.
Void periods are times when the property is empty – when I’m refurbing and between tenants.
Ideally, I want to do the refurb and I want to have tenants ready and waiting to move into the property, even while I’m finishing the refurb, so that there’s no lag time.
But of course, tenants don’t stay forever, unfortunately, and so in between tenants I want the property to be so attractive that I can relet the property quickly as well, so I can get rid of the void periods, the periods where the property is empty.
Reason number 3 is to improve the property so much, and to make it so attractive to tenants, that the tenants will want to pay me a high, or even higher rent then I would normally expect to get in that particular locality.
Now, you have to be a little bit careful about trying to get the highest rent that’s ever been achieved in a locality, because you might not be able to achieve it.
And you may just find that your property sits empty for a couple of months and you end up reducing your asking rent anyway. And the amount you loose whilst the property is empty is far more than the extra rent you would have received if you’d achieved the higher rent.
Or even if you’d just marketed at the lower rent from the beginning but let it straightaway!.
Now, reason number 4, and for me this is the most important and the most exciting reason, is because I want to do a refurb or renovate the property to add value to the property.
My model is to buy the property cheap, we could call buy it BMV if you like, or buy it at a bargain price. I want to buy it slightly below the price that most people would pay for a property, and there are ways and means of doing that, by the way.
And then I want to add value, and I’ll add value through the refurb.
In my world, a simple refurb would be a new kitchen, new bathroom, decorations & carpets, maybe new windows if they’re needed, maybe tidying up the electrics, maybe tidying up the heating system.
But I keep it very, very simple. We are not talking about building extensions or doing loft conversions, we’re keeping it very simple. A simple refurb is usually more than enough, if you know what you are doing.
And that should be enough added value so that after 6 months I can then refinance, and on the refinance I can get all, or most, or at least a lot, of my money back out which I’ve put into the deal.
And any money I get out I can then recycle and use to buy more properties in the future.
And that’s how you can use your money efficiently and effectively, and create exponential growth in your property business.
And that’s how many people, even if they only have a small amount of money to start with, can use their money in a way that will allow them to build a sizeable cash-flowing portfolio.
The great news is, and this is really a subject for another post, that it doesn’t even have to be your cash!
Actually, there are ways of doing it with OPM (other people’s money) so that you don’t even have to put your own money in to do this, but you can still get all the rewards and benefits of using this system.
Here’s to Successful Property investing
Peter Jones
(ex) Chartered Surveyor, author and property investor
http://www.PropertyRenovationProfits.co.uk
- By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Renovator’s Workshop, will show you how to organise and undertake your renovations and guarantee yourself a profit every time – based on the more than 100 property renovations I have undertaken over the last 25 years.
For more details please go to:
https://www.propertyrenovationprofits.co.uk/the-successful-property-renovators-workshop/
And, of course, there’s also 63 Common Defects in Investment Property and How to Spot Them, in which I’ll show what to look for when buying a property, and how I inspect my properties to give myself the best possible chance of understanding the structure and any repairs and improvements.
