While most homeowners purchase a property as somewhere to live, there is a strong and growing buy-to-let market amongst those who seek bricks and mortar as an investment: a source of income that offsets their own mortgage and fast tracks their way up the property ladder.
Nice work if you can get it, you may be thinking. But for those who can’t afford to take on two properties at once, there are other ways you can generate income as a homeowner: namely, convert-to-let or convert-to-sell.
Convert to Let
A loft conversion enables you to take in paying guests or live-in lodgers, whilst a home extension (ideally one with a separate entrance) gives you the potential to become a landlord. In either case you don’t need to deal with a letting agent, except perhaps to find new tenants. You can collect the rent directly (no third party commissions to pay) and you avoid the problems that plague absentee landlords.
Since you’re on the spot you can make regular inspections to ensure your tenants are observing your house rules and keeping the property in good order. You would, of course, be best advised to get a solicitor to draw up a tenancy agreement that sets out the terms of the lease and the rent, and thus anticipate any disputes which might arise.
Convert to Sell
Many people make a living out of buying and selling on their house: in fact some big name developers built their empires on just such modest beginnings. That’s not to say we’ll put you on the road to becoming the next Wimpey or Barrett Homes, but given an increasingly buoyant property market, there’s rarely been a better time to invest in a convert-to-sell home.
Just do the math. If your existing home is worth, say, £350,000, a loft conversion would typically add 20% to the value of your property instantly – or within six weeks, which is how long the average loft conversion takes to build. Your property now has a market value of £420,000 and you will have made £70,000 on the transaction.
Even if the cost of the conversion was £35,000 (a relatively high estimate) you’d have made a clear profit of £35,000. And that doesn’t even take into account rising property values, which all add to the pot. Repeat that two or three times a year and you’ll be making a substantial income, which you can either bank or reinvest in bigger and better properties.
As specialists in loft conversions and home extensions we’d be pleased to advise you on the type and specifications of home improvements that make properties attractive to potential tenants or buyers, and in the case of convert-to-let properties, we are also pleased to provide after sales maintenance and repair work.