"Only put rubbish in a rental"

Although typically I only do property renovations to sell on immediately or style other homes, a client asked me to manage a renovation on a rental property.  Now that I'm nearing the end of the project I Have been reflecting on the differences between buy to sell and buy to let.  

The biggest thing that has really shocked me is the attitude of suppliers, even suppliers who know me and know that I will not cut corners or in any way compromise quality on a project, tried to push me into buying really low end items when they heard it was for a rental.

Now don't get me wrong, when I say quality, I don't mean I'm gold plating everything, everything is still on a budget.   Using a supermarket as an example, on a buy to sell, I tend to buy more "finest" products, on a rental I am buying mostly "own brand" and only a few items are "value".  

Having been a landlord(lady) before and seen first hand the devastation that a tenant can cause (smashed toilets, beige carpets turned black, crayoned walls and the most shocking - a broken electric shower which had been "fixed" with a knife!) so I know that there is a chance things will get damaged and not looked after as you would hope.  But it seems to me that if you only put in the very low end items, not only will then not last as long anyway, but the tenant will be far less inclined to look after them.

Not only will good quality last longer (unless the tenant is really terrible) but also the property is likely to be snapped up much more quickly between tenancies.  Say the rental is £500 a month, I'd rather spend an extra £1000 on a quality kitchen than put in the same cheap kitchen as everyone else and have the property sit unoccupied for 2 or more months.

The most shocking supplier was the flooring supplier, who was happily pricing the "normal" range for me until it came up in conversation that it was for a rental, at which point he said, "only put rubbish in a rental, you don't even want underlay".  It's a solid concrete floor, so yes, I really do think underlay would be a good idea. When I decided that none of the cheap vinyls were in any way attractive or a match for the bathroom tiles, I started looking at the more expensive (but still well within budget) range at which point I was given a severe telling off that I was "being too personal". Well, if being personal is wanting a nice looking house for a tenant and be good quality, then I am proud be be too personal!

As it happens, the house is not yet completely finished but already has a tenant signed up on a 2 year contract.  Since there are 4 other vacant rentals on the same and adjoining streets, this isn't just because it is in a nice area.  Clearly tenants are just as bored of the same old cheap kitchens as I am!

Not quite finished but here is the kitchen I put in.

Buy to Let v Buy to Sell

This is a topic that has been cropping up a lot for me lately.  I currently only buy to sell, I have rented properties in the past and found the income (or lack of) really didn't make up for the time and stress.  I think I might just have been unlucky with bad tenants and bad letting agents, but thats a post for another time when my blood pressure is lower!

As with anything there are pros and cons.  

For me, the pros are that I buy, I get in and renovate in usually 6 to 10 weeks (I'm a mum first and do this part time so it could be quicker) and then get it on the market. So far, I have always received offers within the first week of it being on the market, the problem is converting the offer into completion, but it always gets there in the end.

I have come across a problem where buyers struggle to get a mortgage because I have owned the property for less than 6 months.  However, there are some lenders who don't have this rule. (Yet another example of rules to make developing more difficult than it needs to be)

Both selling and renting have their financial risks, a rental income is not guaranteed, the cost of damage is unpredictable, but it is likely over a long term that the overall value of the property will increase.  With selling, its a quick turnaround for (in my case) a moderate income, where all the value comes from the purchase price and the work carried out, rather than the market.

At the moment, where being a mum is my priority, buying to sell is the right choice for me.  I choose 'low risk' properties where I am confident of a quick turnaround and a swift sale.  When my daughter is in school and I can dedicate more time to it I will take on higher risk projects, for higher return.  Buy to let would be too slow as an income at the moment, but ask me again in a few years!!