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Expanding your portfolio?

September 18th 2014
By: Jon

Recent research from HSBC has shown that buy to let properties which have already been renovated are on average 43% more expensive than one which has not been updated.  The average yield for properties that are ready to move into are 1% higher.  In spite of the higher initial outlay, refurbished properties are generally better investments in the long run.
 
Almost half of UK landlords have one buy to let property and of this, 43% are planning to purchase a fully renovated two bedroom flat.  Only 38% of landlords are prepared to purchase a property that needs work doing.
 
Peter Docker, head of mortgages at HSBC has said “ready to move into properties are often the savvier choice for landlords looking to purchase additional buy to let properties. Not only does this avoid the need for lengthy and expensive renovations, it can also result in higher yields in most areas of the country.  Whilst the initial purchase price will be significantly higher, rental returns are also improved, making monthly mortgage and maintenance costs more palatable.”
 
If a landlord doesn’t mind some DIY then a property that needs refurbishing could be the short term cheaper option.  Spending money on a new kitchen, bathroom and redecoration of four rooms could cost about £10,500 with the potential of adding nearly £60,000 to the value of the property.
 
It’s important for any landlord to maximise their investment – renovated properties to high standards will ensure that maximum rental income is achieved.
 
Goodfellows use a tested list of contractors and regularly take on refurbishment works on a client’s behalf.  To talk in the first instance, please call our Property Management team on 020 8687 8345.