Refurbishment ROI Calculator
Whether a refurbishment pays for itself in added rent and added value.
Added annual rent
£3,000
Total cost including lost rent
£16,243
Return on refurb (income only)
18.47%
Payback from rent alone
5.4 years
Added value
£35,000
Value created after costs
£18,757
What this calculator tells you
A refurbishment has to earn its keep twice: in rent and in valuation. Spending £15,000 to add £250 a month is an excellent income return; spending it to add £35,000 of value that you can refinance out is arguably better. The costly mistake is spending on work that does neither — high-specification finishes that the local rental market will not pay for.
How it works
- 1Added annual rent = (rent after − rent before) × 12.
- 2Total cost includes the works plus the rent lost while the property is empty.
- 3Income return = added annual rent ÷ total cost × 100.
- 4Added value = valuation after − valuation before; subtract total cost to see whether real equity was created.
Worked example
£15,000 spent to lift rent from £900 to £1,150
- Added rent: £250 × 12 = £3,000 a year.
- Six weeks empty at £900 costs £1,243, so total cost is £16,243.
- Income return: £3,000 ÷ £16,243 = 18.5%.
- Value rose £35,000, creating £18,757 of equity after costs.
An 18.5% income return plus £18,757 of new equity — a strong refurbishment, and a candidate for refinancing to release capital.
Frequently asked questions
Is refurbishment tax deductible?
Repairs and like-for-like replacements are deductible against rental income. Improvements and extensions are capital, so they reduce a future capital gain instead. The line between the two matters — keep itemised invoices.
Which works add the most rent?
In most UK rental markets: a modern kitchen and bathroom, good heating and insulation, neutral decoration and reliable broadband. Energy efficiency improvements increasingly matter too, given the direction of minimum EPC standards.
Related content
These calculators give general estimates for UK private landlords and letting agents, not legal, tax or financial advice. Figures depend on your circumstances and on the rules in your part of the UK — check the detail or take advice before acting.