Rental House Renovation– How do I make the most return on my investment?
The rental market has been notoriously difficult to make a return on recently. Here is how Mr. Budget and I achieved great returns when renovating rental houses.
Rental House Renovation Tip 1 – Preserve your Main Income by Keeping a Balance
In terms of rental house renovation I am a newbie. First of all, as you have probably gathered, I am a passionate believer in income preservation. Well usually our rental houses tick over so nicely (we have been really lucky) that it is an abstract concept, showing as figures on our bank account.
However, at the end of June, we were presented with a smelly, dirty, flea infested wreck that let’s say needed a lot of work. We can’t moan – we bought the house for an exceptionally good price, but knowing that the landlord wanted a quick sale. Therefore he dropped the price, as the tenants hadn’t paid a bond, and he was also subject to decreasing health.
We took a balanced approach to this. My income – the main income is so essential to preserve, requires at least 60 hours a week. So we both talked about realistically how many hours we could devote to this every week.
Rental House Renovation Tip 2 – involve an agent
First of all we invited the agent we have built a good relationship up with over the years, to appraise the property.
For every room, we walked through and discussed what needed doing/changing/renovating. I firmly believe in always asking experts for their advice. It is crucial in my mind, as it allows you to avoid any major overspends.
Our agent also given us different rental estimations based on different scenarios – for e.g a price for a higher level finish, new bathroom and kitchen sink.
Also a price for a quick paint up throughout, leaving existing cat-scratched wallpaper on and existing fittings.
Rental House Renovation Tip 3 – try to do as much of your own DIY as possible – it’s cheaper!
How much money have you got to spend? How much time can you commit? How are you diy skills? How willing are you to learn renovation skills?
Time for a tradesman can be approx £20 an hour. If you do the work you can yourself, this is in your pocket not theirs.
Some things, such as painting, filling, cleaning and garden renovation were easily done by balancing work commitments with a couple of hours after work/weekends. If we hired a tradesman in for this it would have added an extra £2000 to our costs. Shocking I know, but this is the bonus of writing everything down, and also asking local tradesman for quotes. This allowed us to weigh up all the options.
Rental House Renovation Tip 4 – draft up a budget, job list and stick to it!
The new bathroom and tiling it needed we decided to get a tradesman in to carry out the work. The kitchen needed renovation too, that we just didn’t have the time to do. Overall the cheapest tradesman’s quote was £2000 for all the works necessary. We asked for 3 quotes, so we could assess how fair they were. Our budget overall for the renovation was no more than £3500 inc carpets, tradesman work and tools, materials etc.
We also factored in 10% contingency for unforseen things – this was on advice from our agent. Since we weren’t familiar with the house, for example, the boiler could need replacing or other things such as damp could have been present. Many of these things you tend to discover mid renovation!
Rental House Renovation Tip 5 – use youtube videos to help you learn new skills.
We decided to go for the higher level finish. This meant that I had to be positive and learn how to fill a wall professionally (haha) and not be afraid to try skimming as in the case of the wreck of a front bedroom.
I have no affiliation to anyone on youtube, but Paul Peck and the Ultimate Handyman have amazingly easy videos to help with all aspects of the diy skills you will need to use when preparing a house for rental.
Rental House Renovation Tip 6 – Time is money
Remember – every day you are preparing your house for rental, it is not on the market, or making any money. Draw up a schedule of works targets and stick to them. Research a couple of weeks in advance 3 agents to appraise the property once it is done.
Good Use of Your Time
The rental business is all about minimising void periods, so be decisive when decorating. If there is a method of renovation that you can do quicker, then do this and stop the method that was less efficient.
Scenario 1 – I filled plasterboard walls with polyfilla, then painted over minimal damage with an undercoat. One medium sized room took me 1 day to do this job.
Scenario 2 – I used ready mixed plaster to cover all bigger and minimal damage. I put two layers on and sanded between coats. This took me 4 days.
At the end of the week,I decided, for the rest of the rooms, I would go with the filler approach and only use the ready mixed plaster for really damaged areas. As a result, in week 3, I saved myself 3 days time. I was also achieving an excellent finish for rental.