If you want to get the most out of your original investment in the buy to let world, make sure you’re thinking about ways to add value to your properties for the future. The rental market easily fluctuates, and you’ve got a lot of competition to run up against. Thankfully, when it comes to adding value to your rental property, there’s quite a few movements you can make.
After all, plenty of renovations exist on the market, and you can add as many as you need to to a rental property. So, let’s delve into some details surrounding the most valuable ways you can renovate or extend your property.
In 2017, a report was released that told the market an average 25 square metres extension can add up to £59,000 to an overall property price. In terms of the rental market, and using the average 1% of the property price for rent, that could seriously up the amount of rent you are owed each month.
Of course, it’s going to depend on the property you’re working with, but an extension is one of the main ways to add more value to a rental property. The average cost of an over the garage extension for example is between £18k and £30k and a wrap around extension can cost between £40k and £55k. Adding a bedroom over the garage will add a lot of extra value to the property. After all, the tenants will have more space to live in, or indeed an extra bedroom to make use of, and that’s something you can always charge more for.
A Loft Conversion
It all depends on where your rental property is placed, and how the rental laws in that area dictate how you can set your prices. Even so, if the property you’re renting out to the market has a loft space, converting this could add upwards of £40,000 (even at the lowest rental price average in the country) to your overall property price.
This will allow you to rent out at a much higher monthly price than before – loft conversions are highly sought after on the market, and a lot of renters and buyers alike desire a loft space to either use as a guest bedroom or a home studio.
A Garage Conversion
The garage can be a room of multiple uses within a property, and thanks to its versatility in the face of modern needs, converting it could add a lot more value to your rental property. And seeing as garages can be converted in a variety of ways, the cost to do so can be cheap, all the way to extremely expensive on the budget you’re working with.
Garages are an important part of modern and/or new builds, so there’s a good chance you’re working with a garage space. Take the time to turn it into extra living space and your rental property could be worth upwards of £20,000 more than what you bought it for. That could be at least double the return of what you put into the original conversion itself, to either turn the space into a storage area, extra bedroom, or working home office.
Landscaping Your Garden
Now comes the time to think about the exterior of the rental property on your books. When putting the property on the market, do you think about the surrounding area? You should, because there’s a lot of secret value in the landscaping of both a front and back garden – the market often looks for more curb appeal, and there’s a huge eco friendly drive that now prioritizes a good amount of backyard space to work with.
In the past, landscaping a garden was often touted as adding about 15% more value to a property. In reality, this percentage can go up and down (to only 5%), but the average sits more between 10% and 20%. And this all depends on the landscaping you’ve opted for – for example, evergreen plants have always rung in on the higher end of that percentage mentioned above, especially when situated outside the front of a property.
Added Value Matters
Adding value to a rental property can be costly upfront, but it’ll garner more and more of a return profit as the years go on. If you plan to hang on to your property for as long as possible, and offer leases on a long term basis as well, there’s a good chance even just a 5% increase could pad out your bank account much better than you ever thought possible.
These are trusty additions, but keep in mind that property value is always determined by local market rates, and local rent price laws, and a safe investment is never quite guaranteed.
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