New report warns buy to let investors that poorly managed home improvements can be a drain on both financial and time resources.
Many buy to let owners add improvements to their own properties or carry out Renovation works when the Property is not being let, but the figures from recent research carried out by ING Direct suggest that much of this money could be wasted.
Property owners are spending far more on property upgrades than they had planned. The figures reveal that as many as one in three home improvement projects go over Budget every year, with an average overspend of £908. This amounts to £4 billion more than the UK’s collective renovation budget had planned for, with inexperience blamed as the main factor for these blunders.
As such, property investors are being warned to make sure that they are investing their money wisely when looking to improve a property.
Lindsay Sinclair, chief executive of ING Direct, commented: "What our research demonstrates is that it is extremely important to put Financial and timing plans in place long before starting work."
Not only do many projects run over budget, but also over the time that had been allocated to them by the owners, meaning that home improvements are proving to be a drain on both financial and time resources. According to the survey, over four million homeowners carried out work which ran over the time allocated to it in the last year.
The very serious implication of this for buy to let investors is the delay of income from new tenants. The upshot of this is to see a reduction in rental income over the course of the year, which could have a severe impact on an investor's revenues.
It may, therefore, be better in many instances for investors to employ professionals to carry out improvement work, rather than trying to cut corners and reduce costs by taking on the work themselves.
It appears that, while do it yourself renovation may appear to be a cheap route in the short-term, in the long-term it can cost, not only in terms of overspend and time issues.
03 July 2006
