Should the Property be Fully Renovated Before Renting Out?

Many properties bought at auction are in a state of disrepair. Usually the properties have not been lived in for some time, whether it be because the owner was evicted due to repossession or because the house belonged to someone who passed on and the relatives have not looked after since it has been unoccupied.

This means that while you may well get a bargain at the property auction there’s a chance it will need quite a lot of work doing to it. This needs to be considered when it comes to deciding how much you can spend at the auction itself. If your maximum limit is £200,000 there’s no point getting a £190,000 house that needs £30,000 worth of renovation. This is another reason why viewing the property is so important. You need to know how much work needs to be done at the house before you decide whether or not you are actually getting the bargain you hoped for!

What Rent Do You Expect?

Once you know how much renovation needs to be done you must decide what rental yield you expect before you decide how much to spend on renovation. For example if you are hoping to rent the property to a professional, top-market couple at a high rental cost each month then you will have to undertake some serious renovation. The professional couple will expect their money’s worth when they move in and you’ll find yourself struggling to rent it at the rent you propose if you do not make it top-of-the-market.

If you are looking to rent out the property at a lower rental rate then less renovation will be necessary. You will have to make basic renovations though so that the house is suitable to live in but there is no need to make the aesthetic-renovation required to rent the property out for a high rental yield. Renting the property to students for example will not require the same extensive work as renting to a professional couple for twice the monthly rent.

You MUST however make sure you have made all the necessary renovation for safety. This includes foundation work and correctly installing gas appliances.

Finding Renters

Once the renovations have been completed and you know who you want to be renting the property to you need to find the renters! Where you advertise depends on who you want renting the property however newspapers and internet websites usually offer the best results.

Buying To Sell On

If you are buying the property at auction with no intention of renting it out but plan on selling it on you may not have to do any renovation at all. You could sell the property on to a property investor who wants to do it up in his or her own way.

Renovating the property and how you do it depends on your intentions for the property and also, of course, on how much money you have to spend. Be careful not to get in over your head by undertaking a project that you can’t complete.