Providing funding for an Airbnb in need of repair and maintenance work

Loan Amount:
£350,000

Property Value:
£500,000

LTV:
70%

We regularly help investors through multiple stages of a rental strategy. However, where different elements come together in a relatively short amount of time, complications can arise.

A pair of borrowers, via a company, needed funding to support their BTL plans following a major conversion project. Despite owning the property in question for many year, they had more recently decided to convert the asset.

While the conversion progressed with few difficulties, some repair issues emerged following completion. Our underwriter got to work in assuring funding could be issued to address the needed repairs. While at the same time, factoring in the property’s new letting setup.

Factoring in unique rental setups

The property in question was converted into multiple residential lets. They were let out on an Airbnb basis, meaning their income potential was derived from the holiday season, as opposed to throughout the year. We had to factor this in when determining the loan’s feasibility.

To make sure the loan stood on solid foundations, our underwriter assessed the client’s wider background to limit any potential downsides. Working with the valuer, we saw that the general condition of the building was consistent with what would be expected of its age and construction. This was the case even when factoring in required repair work.

Additionally, we could see that the borrower had vast letting experience. This, coupled with the fact that it shouldn’t be difficult to remortgage the property at the end of the term for the exit strategy, provided a solid base for the issuing of funds for the AirBnB.

Landlord will want to fixup their properties sooner rather than later

Maintenance and repair costs are likely to come into focus over the coming years. Soon, landlords will have to factor in new environmental legislation that could push their bills up. This could be especially true for those who own older properties, which may require a bit more TLC.

Some may already be feeling the pinch. Property maintenance costs are now swallowing up to a fifth of rental income, according to research from Help me Fix. With inflation showing no signs of slowing down, property investors and landlords will want to tackle any needed repairs sooner rather than later.

A stitch in time saves nine and by addressing problems early, investors may be able to limit spiralling costs down the line. Our bridging loans can help those who need to address urgent and unexpected problems, with funding able to be issued in as little as three days. Specifically, our Permitted & Light Development Bridging Loans are designed to support those facing costly renovation or refurbishment plans.