Refurbish-to-let: The latest property trend
Renovating for profit is a common strategy among South Africa’s growing crowd of buy-to-let investors who battle to maintain a steady cash flow in the face of mounting economic pressures. With the South African Reserve Bank expecting a rise in interest rates over the next two years, property buyers will likely see an increase in their monthly bond repayments.
To meet the demand for quality property, more and more investors are setting their sights on older properties in the market, buy a run-down house at a bargain price, and refurbish it to boost their value and rental returns. Like any investment, there’s a whole lot to consider before sealing the deal, not the least of which are the price and home itself.
To effectively manage the cost of your investment, your budget should include the price of the property and the cost to fix the home. The ideal buy-to-refurbish home is one that does not require too much structural work and just needs a face lift. If you can get your hands on a house that’s in a good condition structurally but lacks character, you’ll often discover that by replacing the door, add new flooring and installing new light fixtures, you can end up with a modern and stylish home without exceeding your budget.
Whether you’re buying your first property renovation project or expanding your portfolio, being aware of the difference between aesthetic elements and structural designs is important as it can help you identify and buy property that needs minimal changes but yields significant long-term rental returns.
