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How To Renovate A House On A Tight Budget

February 21, 2023
Home insurance

Considering buying a house for renovation? In this article we look at how to renovate a buy to let on a tight budget, with tips on how to make the most of your investment, and reminders of the key things to consider, and hopefully, you’ll soon have tenants lining up to rent your newly refurbished property.

Large bedroom with high ceilings being renovated

If you’re a landlord, and you think you’ve found a great buy-to-let property but it needs a bit of work, the potential cost of getting it up to scratch can be a bit daunting. Apart from the cost of buying the property itself, there are lots of other expenses to consider too, for example, the materials, the labour, landlord insurance and if you decide to keep it for yourself then a suitable house and contents insurance.

Plan your renovation

Whatever your budget, it is important to make sure it doesn’t take longer than needed because, the longer you spend renovating, the less rent you will receive, so it is key to plan to make sure you are able to get the maximum return on your investment. Set yourself a timeframe, and then work backwards, making sure you get contractors lined up, and buy or hire any tools and materials you need in advance, so everything is ready to go when you want to start. If you have one part of the work which is reliant on another being completed, then have a contingency plan in case anything is delayed, or contractors let you down.

First impressions

The first thing letting agents and potential renters will see when they come to view a property is the outside of the house, so make sure it has plenty of curb appeal. That might mean replacing the front door, or giving it a lick of paint, and making sure any cladding and facias are neat and tidy. These changes are usually not expensive– and may just involve a good clean - but can make a huge difference to the rentability of the house.

Room mid renovation with bare brick walls

Keep it simple

When looking at upgrading the inside of the house, don’t try and do anything too fancy. People’s tastes are different, and there is no point paying for a top of the range kitchen in a colour you like, as it will not be to everyone’s taste. Think about simple and timeless styles – magnolia walls, white bathroom suites and kitchen units – white is the cheapest, and easiest for people to imagine putting their own stamp on, so it is a win win situation!

Keep it cheap

If you cannot afford to renovate the entire property, focus on the key spaces – the kitchen and bathrooms. If you can get second hand units – or ex-display - this will save you thousands and if you are able to fit it yourself, even better! It will generally be cheaper to buy a kitchen or bathroom suite separately, and then pay a tradesperson to fit it, rather than pay for the materials and fitting with one firm. To really save cash, think about just replacing doors, rather than the whole unit, or even getting them sprayed, which will give them a fresh new look without the expense – something as simple as replacing the handles can also make a real difference.

Tiles are king

Try and use tiles as much as you can in kitchens and bathrooms because they look stylish, can be very cheap – especially white ones - and they keep mould at bay. This makes it much easier to keep the rooms looking clean and tidy and means you can leave it longer between touch ups. Obviously, you can’t tile the whole house, so where you do paint, a good tip is to use kitchen and bathroom paint – these types of paints are mould resistant and wipe clean, meaning you can wipe off any marks without having to repaint.

Check planning status

When it comes to renovating a house you may be thinking if you really need planning permission? In most cases, you just need to ensure you stick to the guidelines laid out by your Local Planning Authority (LPA). Each LPA’s rules will be different, so if you have done a renovation in one area before, don’t assume it will be the same, so always check before you start. This is really important because if your project does need planning permission and you didn’t get it, you can be forced to undo all the changes you have made.

If you are renovating a listed building, the rules will be different, and in many cases, you will not be able to make any changes, or any that you do make will have to be in keeping with the property’s original features, so it is vita you check before you do any work.

Claim back VAT

When it comes to VAT (Value Added Tax) the rules for landlords are quite complex – that’s because while the letting of the building is exempt from VAT, if you are refurbishing a property, the standard rate applies, and you may be able to claim some of it back, e.g if you have paid VAT on building costs and materials for renovation works carried out. Rules may differ depending on whether you own the property privately or via a limited company so speak to an accountant or tax specialist to check what you are eligible for.

Modern living room with white walls and maroon chairs

Apply for Council Tax exemption

If during the renovation, the property is unfurnished and unoccupied, it could be exempt from paying council tax; contact your local council to see if your property qualifies, and then apply for landlord Council Tax exemption, which could really help if you are on a tight budget.

Get covered

One of the key things to remember when renovating a property is to get insurance in place straight away because, if anything goes wrong while a property is being renovated, and if you are not covered, that tight budget could be gone in no time, leaving you with no cash to finish your build.

Not all standard home insurance firms will provide cover for buildings during renovation, but there are plenty of insurers offering specialist insurance, to cover the building and its contents while the property is being worked on. You will also need liability insurance to cover you for the work itself –some renovation cover will include this, or offer it as an optional add on, so check with your provider if it can be included or needs to be sourced elsewhere.

Once you have tenants in, it is imperative that you get landlord insurance to cover the building, the contents and public liability. Landlord insurance can also cover you against loss of rent, legal expenses, and any costs involved with eviction if you have issues with tenants.

Want more top tips on being a landlord or general tips for homeowners? Read our blog to find out more.

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