One of our very own TML team members, Sophie L, has recently finished a renovation on her latest property investment in Leeds. She's increased the overall rent by a whopping £1,345 extra per month and more than doubled the value of the property. We sat down with her to find out exactly how she did it along with the challenges she faced, the vision she had and of course lots of tips for our Modern Landlords!
The Project
Tell us about the building...
It's a mixed use building with a commercial space on the ground floor and 1-bedroom apartment on the first floor. The property dates has the most gorgeous of features including a stunning staircase, arched window and 3m high ceilings! The high-street the property is located on is actually within a conservation area where all buildings have been constructed with Yorkshire stone, so she's as beautiful on the outside as she is on the inside.
How did you source this property?
I found this property at auction a week before it was due to be sold. Luckily I had a very quick solicitor who looked over the legal pack for me in time and I even managed to squeeze in a viewing. Running the numbers I knew there was potential, however, as I'd never bought from auction before I was a little scared to make a bid and decided that I would just watch it play out, learn from the process and hope it didn't meet the reserve (like it hadn't the previous two times it was in auction before)!
My luck was in as it didn't meet the reserve of £120,000 so I rang the auction house right away and managed to secure the whole property for £105,000.
I was pleasantly surprised with the whole process of buying from auction - from offer accepted to keys in hand it took 26 days!
top tip - always check the un-sold lots at Auction Houses. Sellers put their property into auction if they want a quick sale or they're struggling to sell it via the usual method of estate agents. Therefore, if it doesn't sell at auction either they'll be worried they can't ever sell it and will often accept a very cheeky low offer!
The Plan
The original plan was to renovate the 1-bedroom apartment and convert the commercial space into another 1-bedroom apartment... but planning thought otherwise! I has good grounds to appeal the rejection but I wanted to start with renovations and thought adding a different type of property to my portfolio could actually be a good thing (spoiler alert - it was as it's now let to a baby ultrasound clinic on a 5 year lease)!
Both the apartment and commercial space needed a complete renovation - new electrics, insulation, plastering, kitchen, bathroom, flooring & more.
I wanted to save, re-use and sell whatever I could to keep costs low and be as gentle on the environment as possible. I was able to sell all the kitchen units and appliances for £200 and vintage furniture that was left behind for £100, re-use a lot of wood that we stripped out of the commercial space, as well as all of the radiators in the apartment, saving around £600.
The Design Vision
What was the vision for the apartment?
Due to the buildings age and original features I didn't want to go super modern, but instead compliment the building. That being said, I didn't want it to be old fashioned either - so it was a balancing act!
I looked to the Parisian interior style for inspiration as I felt the features on my property were most similar to that of a building in Paris. For the colour palette, think muted and light with some darker colours in key areas to create some drama. I chose brass accents throughout - door handles, sockets/switches, lighting and of course added some of the traditional panelling details to the walls that you so often see in french buildings.
Using the tml moodboard guide was so helpful in getting clarity in my mind on the design direction as well as ensuring each rooms designs complimented each other.
How about the commercial space?
Previously a greasy builders cafe and vacant for nearly a year, the commercial space was in a terrible way - greasy walls, dodgy electrics, rotten floors and badly laid out with a bathroom taking up 1/3 of the upper level and a whole area of un-used space at the back.
I know that in a lot of commercial spaces the tenant does the renovation but with its terrible state, the fact it was only 450 sqft and the tenant demographic being small businesses I didn't think it would rent in its current state.
The plan was to have a small kitchenette and toilet created from the previously un-used space, opening up the rest of the useable space into perfect squares. The decor would be very plain as I'm certain the tenant would want to change to suit their branding.
The Renovation Process
Did you come across anything unexpected?
Oh yes - of course! This is a property renovation, expect the unexpected!
The main unexpected works was a structural fix - yikes! The whole front of the property was not 'tied in' to the rest of it, so over time it was pulling away from the other walls creating gaps as wide as my fist. At first I thought I was bu$$ered but as it wasn't a foundation issue, the solution was actually very simple - steel straps drilled in to where the walls meet, and set with resin.
Top tip - check any gaps where the floorboards and walls join as well as in the corners of the walls as this could be a sign your property has the same issue
What challenges did you face?
The main challenge was the trades on this one. Unfortunately, even though this is my 4th & 5th renovation, I got very unlucky. Rude electricians, sloppy decorators and cowboy roofers.
I didn't follow my own advice with the decorator. I gave him too many chances and in the end had to finish the job myself, as he'd already delayed the project by 2 weeks. I don't know if others feel the same, but I always feel like the trades have a hold over me once works have begun, but they don't - remember you're the boss!
Top tip - when it comes to trades, go with your gut as 99% of the time it's right and if you're not happy with their quality of work, get rid asap!
Any money saving tips you can share?
I'm pushing for the highest rent in the market in the area so the place had to look stunning, but on a budget, so yes lots to share!
If there are built-in wardrobes good enough to save, up-cycle them! I added panelling and gave my built-ins a fresh lick of paint. They look really high end and it means there's one less thing for the tenant to have to buy in an unfurnished space.
Re-use and re-sell where possible. As mentioned already, I made and saved nearly £1000 by being more conscious of items already in my possession.
Make scrolling on FB Marketplace a daily activity as if it were Instagram - I found some stunning lighting that was used in the property that is worth hundreds new but I got for £30. There are also local businesses that sell new products on there - my whole bathroom suit for both the commercial unit and apartment (bar one of the sink units) was from here costing just £900 for both bathrooms!
Use items from your own home for staging the property - mirrors, art, plants, candles, vases, you name it. But be prepared for a very empty looking home for a few weeks!
The Numbers
Can you talk through your spend and your returns predicted?
Happily - I always find it so useful and actually comforting hearing about other peoples property development spends.
Purchase price: £105,000
Purchasing fees (auction costs, solicitors etc): £3,337
Planning application: £1,137
Renovation costs: £58,000
Commercial lease: £1,000
Selling costs: TBC
Total costs: £168,474
Revaluation price: £250,000 (pending)
Rental income: £1,695 pcm (£845 apartment, £850 commercial. Tenancies agreed.)
Total profit: £81,526
Gross rental yield: 12.07%
The original plan was to refurbish and refinance, however on a mixed use property with its end value being £250,000, I could only get a loan to value of 65%. My thoughts now are to flip to project so I can release all the cash for the next one - as both units are rented out above market value I would market the sale to another investor as a packaged deal generating 8.14% gross returns.
We hope you've found this blog post inspiring and potentially helped you to saved you money from all the useful tips! It's the first of this type of blog we've done, so if you want to hear more about real Modern Landlords project please let us know via Instagram!
Follow Sophie L on Instagram here : @sophieolane
