November 30, 2023 2:02 pm

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Nikka Sulton

Investors must grasp the distinctions between refurbishment, renovation, and refurnishing from the outset. It’s a common misconception to consider these terms interchangeable, assuming they convey the same meaning. However, each term has specific implications in the realm of property projects.

Refurbishment, as a concept, revolves around the objective of enhancing a property’s value or prospects. This often entails the rebuilding or upgrading of assets using new and, hopefully, superior materials. On the other hand, renovation is focused on restoring something to a good working condition. For example, if a property has an old building with a deteriorated roof, renovating becomes necessary.

Furthermore, refurnishing is a distinct aspect that involves acquiring entirely new furniture to replace what was present before. This process is separate from refurbishment and typically concentrates on the aesthetic and functional aspects of a property’s interior. Understanding these nuances is crucial for investors to make well-informed decisions in their property ventures.


What is the difference between Renovation and Refurbishment?

Renovation and refurbishment, often used interchangeably, have distinct meanings. Renovation involves restoring something to a good condition or repair, while refurbishment implies a process of cleaning, equipping, or retrofitting.

In terms of lending, a renovation loan is applicable for improving the home’s exterior, electrical, windows, or appliances, making fixer-uppers appealing. Whether enhancing the facade, upgrading windows, or redoing the kitchen, a renovation loan is instrumental in returning a property to a good state of repair.

Personal experiences, like a 203K renovation loan for a family-owned house, highlight the potential for substantial equity through renovations. I’ve seen and personally done a 203K renovation loan on a house that I bought, a one-story ranch in my family, for 40 years. We put about $80,000 into it with repairs and upgrades, resulting in significant equity.

The versatility of renovation financing extends to both improving one’s current home and purchasing properties. Renovation loans offer the flexibility to transform fixer-uppers into attractive, well-maintained homes.


How does the refurbishment process work?

Distinguishing refurbishment from renovation is simple, but navigating the entire process can be complex. Refurbishment projects vary, and planning is crucial. Investors must outline their goals, whether it’s an extension, wall removal, or additional doors.

Many refurbishment projects require planning permission, obtained from the local council. Local authorities provide building control services for substantial plans like loft conversions, ensuring compliance with regulations. These services verify structural soundness and safety.

After meticulous planning and compliance, investors seek builders or contractors. Recommendations from trusted associates or online resources like can guide this search. A written contract is essential to align ongoing work with the refurbishment plan and schedule.

While an ideal scenario sees work completing ahead of schedule and under budget, upgrading an age-old building poses challenges. Investors should anticipate unexpected issues and unforeseen costs, acknowledging the complexities inherent in modifying a centuries-old structure.


What types of assets can be refurbished?

Distinguishing between refurbishment and renovation involves considering various elements beyond the apparent definitions. While many associate refurbishment with aesthetic changes, it also encompasses structural modifications. Upgrades to wiring, plumbing, or ventilation fall under the refurbishment category.

To plan effectively, it’s crucial to have a clear understanding of the necessary work. Identifying specific property elements undergoing upgrades helps determine the required workers or establish the refurbishment budget. This clarity ensures a focused approach to the project, whether it involves aesthetic enhancements or structural improvements.


  1. Bathroom

A dated bathroom can discourage tenants, impacting their sense of relaxation in this space. Signs of aging, such as cracked tiles, peeling paint, and rust on fixtures, can create an unclean impression. Refurbishing the bathroom not only modernizes the property but also has the potential to boost its value by an average of 4-5%.


  1. Kitchen

The kitchen, often considered the heart of the home, holds significance, especially for older tenants. While wear-and-tear may not immediately impact the kitchen, addressing it can be a costly endeavor. Ensuring white goods are in top condition and appliances like ovens are professionally cleaned is crucial.

Tenants, particularly those paying a premium, notice these details. Adding a dishwasher can justify a higher rental charge, providing an extra perk for tenants. Opting for quality countertops, especially in darker shades like granite, minimizes marks and reduces maintenance needs. A new kitchen is estimated to add up to 4% to your home’s value, as per the Royal Institution of Chartered Surveyors (RICS).


  1. Living Room

For landlords letting furnished properties, the living room often bears the brunt of wear-and-tear. This high-traffic area demands regular maintenance. When choosing items, factor in the need for durability. Having a clear refurbishment budget for this space is practical.

Given the rise in remote work, consider adding functional surfaces like a larger dining table or a desk. Carpets tend to flatten over time, and underlay replacement becomes necessary. Opting for wooden floors can reduce damage and enhance longevity. Real wooden floors contribute to increasing the property’s overall value.

In the context of HMOs, having a spacious communal area is advantageous for tenant relaxation. Consider open-plan conversions for a sense of expansiveness. Explore conversion bridge loan options if you’re contemplating transforming your property.


  1. Bedrooms

A spacious, uncluttered bedroom is a tenant’s ideal haven. However, maintaining a chip-free, fresh appearance poses a daily challenge. As a frequently used space, it requires practical upkeep.

In properties with limited living room space, placing desks in bedrooms can be a practical solution. Creating an office space within multiple rooms appeals to tenants, especially since the shift to remote work during the pandemic.

Consider installing built-in wardrobes to enhance storage space and attract potential tenants. A quality-standard implementation can yield increased returns, especially if selling the property in the future.


What are the advantages of refurbishment?

Refurbishment has the potential to enhance property value, allowing investors to sell for a profit. However, the outcome is influenced by various factors, and investors must carefully consider refurbishment costs.

For buy-to-let investors, refurbishment creates opportunities as renters may pay more for an upgraded home. This doesn’t solely pertain to aesthetic improvements. A late 2021 survey revealed a strong preference for homes optimized for energy efficiency, cost reduction, and minimal environmental impact. A significant percentage expressed willingness to pay higher rent for greener properties, with over half willing to pay up to 10% more.


How To finance your refurbishment?

When undertaking a specific refurbishment project, understanding financial options is crucial. Specialized lending expedites renovations, with funds available in as little as 3 days. The key is finding a lender with a proven track record in financing renovations, refurbishments, and conversions. Alternative finance like bridging loans offers flexibility to purchase, refurbish, and either refinance or resell the investment asset at a higher value. Financing the works through a second charge bridging loan is also an option. Explore more about second charge lending on our product page.

With expertise in refurbishment loans, we collaborate with property owners or their brokers to meet deadlines and ensure timely project completion. For details on our specialist finance products, contact a member of our team.



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