Landlords wanting to upgrade their rentals properties often make the wrong decisions about how to spend their cash because some improvements are more cost effective than others.
Around one in four home owners make improvements to increase the value of their homes or the rents they can charge, but make a loss by opting for the wrong moneymaking projects.
Spending on upgrading flooring, bathrooms and kitchens may well outweigh any added value, says a study by financial comparison web site GoCompare.
The projects returning the most profit include installing a new boiler or heating, energy saving improvements and upgrading security, they say.
Their Property Investment Calculator gives the estimated price boost – and reduction – related to most common improvements.
Here’s how the spending works out on a property valued at the Land Registry average price for January 2018 of £225,620:
|Average cost||Estimated increase in value||Estimated profit or loss|
|New boiler||£1,995.00||£9,024.84 (4%)||£7,029.84|
|Fit central heating||£4,250.00||£9,024.84 (4%)||£4,774.84|
|Garden make-over||£1,500.00||£2,256.21 (1%)||£756.21|
|Knock through rooms||£1,750.00||£4,512.42 (2%)||£2,762.42|
|Fit double glazing||£8,450.00||£9,024.84 (4%)||£574.84|
|Paint and decorate||£2,500.00||£2,256.21 (1%)||-£243.79|
|New flooring||£2,200.00||£0.00 (0%)||-£2,200.00|
|New bathroom||£4,250.00||£2,256.21 (1%)||-£1,993.79|
|Fit new kitchen||£7,000.00||£4,512.42 (2%)||-£2,487.58|
|Fit solar panels||£5,000.00||£-4,512.42 (-2%)||-£9,512.42|
Ben Wilson, the company’s home insurance spokesman, said: “Our calculator gives homeowners an understanding of the typical costs and benefits of undertaking a range of projects before they start the work, allowing them to see the potential financial benefits.
“Our calculator provides valuations and estimates based on national data. Depending on local housing market and labour conditions, the extent of the work undertaken, and materials used, figures for individual projects will differ and we always recommend people shop around to get quotes for work as well.”