Do you need to Extend your southend Investment Property?
Last week, a landlord from Southend e-mailed me to ask, after reading the leigh Property Blog, if he should extend his terraced house by making an extra bedroom in the loft. He had a builder friend who owed him a favor, and thought it would be a good way to get an ‘inexpensive’ extension.
Having more usable space is generally thought to be consistent with better quality accommodation and home owners and tenants are prepared to pay for it. If you added a bedroom to a two bed terraced to make a three bed terrace, it will add, on average, around 10% to the value of the property. Turn a three bed terraced into four bed terraced, and 9% will be added to the value. Looking at semi detached properties, if a two bed is turned into a three bed then 12% will be added to the value, whilst making a three bed semi into four bed will add 9%.
However, before you rush off to the planning department or contact ‘Loft Conversions R Us’ there are some important considerations, whether you are a home owner or landlord. What would be the cost of making that extra bedroom? You have to seriously consider whether the outlay is worth the potential benefit.
The average value of a terraced house in Southend is currently £180,600 whilst the average value of a semi detached house is £211,900, meaning to make money the cost of the extension would need to be less than £9,965 on the terraced property and £15,949 on the semi detached house. Talking to a number of trade’s people in the town, most are booking up into the New Year. Also, no matter how good a friend he was, I know of no builders that would charge as little as that. Maybe the builder was just thinking of a bit pointing work on the chimney!
Well, that got me thinking about how bedrooms affect rental prices and rentability as well. Interestingly below, you will see that whilst bedrooms do have an effect on the rent that can be achieved and the rentability of the property – the difference does not warrant the expense, hassle and trouble of extending.
· 45.1% of the one bed properties on the market to rent in southend have a tenant with an average rent of £600 per month
· 47.6% of the two bed properties have a tenant with an average rent of £750 per month
· 52.1% of the three bed properties on the market to rent in westcliff on sea have an average rent of £1100 per month
· 35.7% of the four bed properties, an average rent of £1300 per month
Now, if you do want to increase the value of your property, be you a southend landlord or homeowner, there are things that cost a lot less than building extra bedrooms. Spruce up the exterior, decorate all the rooms, install fresh carpets and curtains. For homeowners, a matter of a few hundred pounds will add thousands whilst for landlords, these things can add an extra 10% to the rent that you can achieve.
