Why Renovate A Property For The Rental Market?

If you're investing in property, you will usually choose to do one of two things: renovate the home to ensure a quick, profitable sale, or carry out improvements to enter the rental market. Both can provide exceptional returns, but in very different ways. You will also need to consider your approach, including budget and level of finish to suit your target market.

But why would you choose to renovate a property specifically for the rental market?

Finding tenants for a property rather than selling it outright can provide you with an ongoing source of income. Whilst it will pose a number of unique challenges, it can be a hugely lucrative and long-term investment.

However, in order to rent out a property, you may first need to carry out some renovations. Whether these are extensive or relatively minor will be entirely dependent on the state of the house and the kind of occupants you're seeking. For example, a high-end luxury apartment will have a much higher demand than an inner-city terrace house. Whilst one will attract high-earning professionals, the other might be better suited to students. So always renovate with your desired tenants in mind. However, this doesn't explain why exactly you'd want to do this, so let's take a look at some of the advantages of renovating and renting properties.

The biggest issue that any landlord faces is having their property empty for extended periods. With no rent coming in, the cost of maintaining the home is placed squarely on the owners. So you could end up spending hundreds in utility bills, council tax and mortgage repayments without any compensation. Therefore, having a presentable property that people will be happy to move into is essential at all times.

Whether you're taking the property on as a new investment or it has been a part of your portfolio for some years, there's a good chance that some modernisation may be required. Sometimes, major refurbishments can be restricted to an individual room or the part of the home that is most in need of updating. However, if you are looking to maintain a cohesive theme and ensure the same level of finish throughout, then sometimes it will prove to be much more beneficial to do everything all at once.

As well as taking care of any styling issues, a refurbishment can also provide you with an opportunity to carry out structural changes. So if you want to create an open plan living area, put in an en-suite, or even extend the property, this provides the perfect time to do so.

No two renovations are ever the same. As mentioned earlier, landlords have to consider a number of factors, often putting their own personal taste to one side. Therefore, it is vital that they design and carry out work on an individual basis and with their income in mind. After all, the more money you spend on buying and developing a property, the more you need to recoup. If you can't achieve the rental price you're seeking, then the overall investment will suffer. This is why it is so important to do your sums beforehand.

Buying a house, renovating it and then selling it again is often seen as the quicker and more effective way to build up funds. However, if you have the capital to continue reinvesting, entering the rental market can prove to be equally effective. Over time, the income will pay off the mortgage and allow you to build equity in the properties, ensuring a healthy profit if you ever come to sell it in the future.

In the meantime though, you need to make sure that your property offers potential tenants everything that they're looking for. This means meeting and even exceeding the expectations of your target market. This can be achieved through a well-planned and effectively budgeted renovation project.

Get Free Quotes From Selangor Top Home Renovation Companies…Call 012-2988560.