Buy and Hold, when carried out correctly and professionally, can be a great investment opportunity, bringing in solid rental returns and a very handy second income. With rising property prices making buying a house unaffordable for many, people are turning to renting for the long-term, which means landlords now have a much greater pool of tenants to pick from.
Improving your buy and hold property will not only increase its value, it will also allow you to charge higher rents – in other words, a win-win situation.
There are a number of ways in which you can hone and enhance the quality of your buy and hold home. Below, using our experience as a property lettings and management company based in East London, we detail what some of these are.
Most tenants, especially professional tenants, will appreciate a modern, chic, well-furnished bathroom. A relatively cheap way to add value, the trick here is to keep things simple and minimalist: a new set of taps for as little as £20, a heated chrome towel rail (£50-£100) and a power shower (from as little as £75-£250) will give your bathroom a cool, clean, contemporary vibe, helping it to stand out from the competition.
The kitchen is now often viewed as the most important room in the house. Tenants are likely to spend a lot of time cooking, baking and socialising here. So, if you’re only going to improve one area, you should definitely focus on the kitchen. Make it look attractive, up-to-date and homely; and, where possible, ensure it is as spacious and functional as possible. There are many high street kitchen brands that provide ranges starting from as little as £600 for an eight unit kitchen. It is advisable to go for a contemporary look with bold colours and clean lines, giving your kitchen a modern streak. To top this off, you can install vinyl floors that create a tiled look. These are quicker and easier to fit and, of course, are cheaper than tiles themselves when considering labour costs.
This won’t be cheap, but could help to add serious value to your investment in the long-term. As well as this, a loft conversion is the simplest way to add an extra bedroom or bathroom. If you decide to rent by the room – house sharing is, after all, very popular in London and its suburbs – this would help to increase your profit margins as your rental incomes will be higher. For tenants with younger children or teenagers, a loft conversion would be appealing for the extra space and freedom it provides. Loft conversions start at around £30,000 where you could build two extra rooms and a shared bathroom. If planning permission is permitted for a dormer type loft conversion, this involves extending outward in a box shape from the side or black of a sloping roof. Typically a double room in Leyton or Walthamstow rents at £550 – £650 on average per month. Therefore, a two bedroom loft conversion could add up to £1300 to your rental income per month. In this case, the investment would pay for itself in less than two years – not bad!
Again, this won’t be cheap, but the potential rewards are obvious. An extension provides bigger, better living space, which could be used for a larger kitchen, an extra bedroom, a dining room or a sitting room. Additionally, a conservatory overlooking the garden can really transform a property. It is, however, important to match the conservatory with the style of the rest of the house so it doesn’t just appear tagged on. A further advantage of a conservatory is that it doesn’t usually require planning permission. Conservatories are generally cheaper than loft conversions and can help create space in other areas of the property e.g. open plan kitchen and dining area or an additional reception. This could add up to £300-£500 in your rental value per month, especially for town houses in areas like Stratford and Hackney.
Sprucing up your garden or outdoor space will keep tenants happy by providing them with somewhere to sit, relax and entertain on those long summer days. Tenants with kids, too, will be delighted with somewhere safe for their children to play. This won’t cost much but will help increase the chances of your tenants staying put for the long-haul.
On the other hand, garish, out-there and unique décor will not go down well with most tenants. They probably won’t appreciate slow broadband or a lack of storage space either. These small considerations need to be factored in to ensure your rental property is in the best shape possible.
Derrick is a Memphis native specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com