The end of the year is an ideal time to review how your property portfolio has performed through 2016. Are there some properties which are more profitable than others? Do some homes need an overhaul, modernising or upgrading? Can any be extended or revamped? Do some need offloading because they are a drain on financial resources? If a property seems unprofitable, it is good to see why this could be. It might be in the wrong area and so it would be better to sell it, or it may be that a bit of investment could pay dividends. Adding a bedroom, shower room or conservatory could create more space in a family home, or maybe the kitchen needs upgrading with better facilities or to make greater use of available space.
It can be cost-effective to add an extension or loft conversion, rather than buy a bigger family home to rent out. It will also save on stamp duty and estate agent’s fees, as well as adding to the value of the property, with the additional bonus of being able to charge more in rent. An overhaul or refurbishment could also attract a better quality tenant, who will look after the property because it looks good to start with. They may like it so much that they never want to leave, which is another bonus. Your accountant can also advise on any tax advantages for carrying out repairs or refurbishment.
The most important areas to invest in are the kitchen, living room and bathroom. The kitchen is often the hub of a home and so needs to have all the right facilities, plus room for a dining table or breakfast bar. If you have a large hallway between the living room and kitchen, you could look at putting a breakfast bar there. This makes use of redundant space, creating an area where tenants can gather, whether that is a family or a group of friends. A family bathroom needs a bath and shower, while a separate shower room or downstairs toilet is always handy. Colours should be kept neutral to cater for all tastes, but that does not necessarily mean white or magnolia. Subtle colours can be added, so the property does not look cold or sterile. Before starting work, consider who you are targeting – do you want to let to a group of young professionals, or a family with children?
Also, investing some time and money into the garden will pay off. The front should look inviting with a smart front door, because first impressions count! Building a barbecue area or a patio for entertaining is also a shrewd move, particularly if the garden is south-facing.
Plan the works while the property is between tenants so it does not disturb anyone, and have everything in place so the work does not go overtime. The refurb should pay dividends when you come to let it out a few weeks later. Your property will look fresher and more modern and will show that you are a responsible landlord too.