Emile Salame is the founder of Cornerstone Asset Advisors Ltd, a London-based company that provides a full spectrum of investment and real estate asset management services. This article will look at real estate rental, outlining measures taken by prudent developers to position their rental refurbishment for success.
When refurbishing rental real estate, property developers need to keep two key goals in mind. First, their overriding objective is to create a safe and appealing home for tenants. Second, they must ensure that work is completed to the highest standard to reduce the risk of future repair work.
Once the tenant is in situ, repair work can be incredibly disruptive. It is therefore important that the initial refurbishment is thorough, covering all potential issues. In terms of creating a fabulous rental property capable of generating a reliable long-term income, there are several factors for the developer to consider.
When refurbishing real estate, careful planning is key, particularly where the developer is gutting the property and starting from scratch. Creating a solid plan well in advance of starting work is crucial to avoid potential issues. Developers must take the time to put together a ‘schedule of works’, listing all the individual jobs that need to be completed to bring the property up to scratch. These works should be listed in the order they need to be done, with a timescale stipulated for each task to help keep the project on track.
Enlisting the help of experienced contractors with the right skills can make all the difference between success and disaster in any rental refurbishment. Property owners need to undertake careful due diligence, identifying contractors with the right credentials, qualifications and experience, as well as ensuring they have proper insurance. Many developers appoint a ‘lead contractor’ or local project manager to manage all of the various tradespeople and contractors and help ensure the works stay on schedule. Benefiting from a wealth of tried-and-trusted industry contacts they collaborate with on a regular basis, lead contractors help real estate developers to avoid guesswork when hiring a plumber or electrician by providing access to talented tradespeople with a proven track record.
In addition to hiring the right people, it is also crucial for developers to invest in quality materials, including durable flooring and finishes capable of standing the test of time. Sturdy laminate, resilient tiles and thick carpets are better placed to weather the wear and tear of tenant life, reducing the frequency of expensive refits. In moisture-prone areas such as kitchens and bathrooms, tiles can be a game changer, providing long-lasting, mould-resistant surfaces that are easy to clean and maintain. Although light paints and carpets may be aesthetically appealing initially, developers should keep in mind that these will quickly show wear and tear, opting instead for mid-toned greys or browns that are better at hiding stains, maintaining a polished look for longer.
Rather than being guided by their personal tastes, rental property investors need to identify their target market, e.g. families, students or professionals, tailoring the refurbishment to appeal to that particular demographic. Rather than focusing solely on cosmetic appearance, developers need to go down to the bare bones of the building, assessing any required structural improvements and potential enhancements to fixtures and fittings, focusing on the basics rather than blowing their budget on eye-catching features.
It is important for property owners to avoid allowing their emotions to cloud decision-making processes. In doing so, they run the risk of spending more than they need to, investing in the wrong areas or ending up with a longer vacant period than necessary. It is also important to ensure that remedial work is tackled in a timely fashion, as delaying vital maintenance work could prove costly in the long run. Works must also be undertaken to a high standard to avoid repairs in the future and potential disruption for the tenant.