Refitting an Apartment Interior to Re-Let: A Worked Cost and Rent Example

Two refit options on one tired apartment, priced against the rent each would support and the void each would cost. An illustrative payback calculation, step by step.

Refitting a let apartment is an investment decision rather than a design decision, and it is settled by three numbers: what the work costs, what rent it supports afterwards, and how much rent is lost while it happens. This worked example compares a cosmetic refresh with a full refit on one illustrative apartment and follows the arithmetic to a payback period. Every figure is an invented assumption used to demonstrate the method, not a market rent or a quotation.

The situation

An owner holds a two bedroom apartment of 95 square metres that has been let for several years and is now tired: dated kitchen fronts and worktop, serviceable but marked bathrooms, worn floors, no proper window treatments and a single lighting grid throughout. It currently lets at an assumed 42,000 SAR a year and typically sits empty for about three weeks between tenancies. The owner is choosing between a cosmetic refresh and a full refit, and wants to know which one pays back.

Assumptions (illustrative)

• Current assumed rent: 42,000 SAR a year, with an average void of three weeks between tenancies.
• Option A, a cosmetic refresh: redecoration, new kitchen doors and worktop, new sanitaryware seals and shower screens, new lighting fittings and window treatments, assumed at 48,000 SAR.
• Option A assumed outcome: rent of 50,000 SAR a year with the void reduced to one week, and three weeks of works.
• Option B, a full refit: everything in option A plus new floors throughout, a complete new kitchen and both bathrooms rebuilt, assumed at 135,000 SAR.
• Option B assumed outcome: rent of 56,000 SAR a year with the void reduced to one week, and ten weeks of works.
• All figures exclude value added tax and any letting or management fees, and assume the lease is registered as required.

Step 1: Establish the baseline effective income

At 42,000 SAR a year the weekly rent is 42,000 divided by 52, which is 807.69 SAR. With three weeks of void the property earns 49 weeks, so 807.69 multiplied by 49 gives 39,577 SAR a year.

The baseline is not the headline rent but the rent actually collected, and the void is the difference. Starting from the effective figure matters, because part of the return on a refit comes from reducing the void rather than from raising the rent, and an analysis built on headline rents misses that entirely.

Step 2: Calculate the effective income after the cosmetic refresh

At 50,000 SAR a year the weekly rent is 961.54 SAR. With one week of void the property earns 51 weeks, so 961.54 multiplied by 51 gives 49,038 SAR a year. The uplift over the baseline is 49,038 less 39,577, which is 9,461 SAR a year.

Two separate effects combine here: a higher rent and a shorter void. The void improvement is worth almost as much as part of the rent increase, and it is the element owners most often leave out of the calculation because it does not appear on the tenancy agreement.

Step 3: Calculate the effective income after the full refit

At 56,000 SAR a year the weekly rent is 1,076.92 SAR. With one week of void the property earns 51 weeks, so 1,076.92 multiplied by 51 gives 54,923 SAR a year. The uplift over the baseline is 54,923 less 39,577, which is 15,346 SAR a year.

The full refit produces a larger uplift, as expected. The question the next steps answer is whether the additional uplift justifies the additional cost, which is a different question from whether the refit is worthwhile on its own.

Step 4: Add the rent lost during the works

Option A takes three weeks, costing 3 multiplied by 807.69, which is 2,423 SAR, giving a total outlay of 50,423 SAR. Option B takes ten weeks, costing 10 multiplied by 807.69, which is 8,077 SAR, giving a total outlay of 143,077 SAR.

Programme length is a real cost in a let property, and it is the cost most often omitted. The seven additional weeks of works in option B cost more than 5,600 SAR in lost rent on top of the construction difference, which is a meaningful addition to the comparison.

Step 5: Calculate the simple payback for each option

Option A: 50,423 divided by the annual uplift of 9,461 gives about 5.33 years. Option B: 143,077 divided by the annual uplift of 15,346 gives about 9.32 years.

Both options pay back, but at very different speeds. On these illustrative assumptions the cosmetic refresh recovers its cost in roughly half the time, which matters considerably if there is any chance of selling the apartment or of the rent assumptions proving optimistic.

Step 6: Test the marginal spend between the two options

The extra cost of option B over option A is 143,077 less 50,423, which is 92,654 SAR. The extra annual uplift is 15,346 less 9,461, which is 5,885 SAR. The marginal payback is 92,654 divided by 5,885, which is about 15.7 years.

This is the step that changes the decision. The additional work in option B pays back over a period far longer than the work itself is likely to remain current, which means the marginal spend is hard to justify on income grounds alone. It may still be justified if the floors or the bathrooms are genuinely failing, but that is a condition argument rather than a return argument.

What changes the answer

• If the bathrooms or the kitchen carcasses are actually failing rather than merely dated, option A is not available and the comparison collapses into a single choice.
• If the refit allows a longer tenancy or a better quality of tenant, the reduction in void and in turnover costs may improve the case beyond what the rent alone shows.
• If the works overrun, the lost rent rises and the payback lengthens, which penalises the longer programme disproportionately.
• If rent assumptions prove optimistic, the longer payback option is exposed first, since its recovery depends on more years of the assumption holding.
• Letting arrangements must be registered as required and the applicable requirements confirmed, including whether the tenancy falls within Ejar, and the value added tax position on the works should be confirmed against the published headline rate of 15% with ZATCA.

What the numbers tell you

• Always work from effective income after void rather than from headline rent, since reducing the void is part of the return.
• Include the rent lost during the works in the cost of the option, because a longer programme is a real and often decisive cost.
• Test the marginal spend between two options separately, as the larger option can be worthwhile overall and still fail on its additional cost.
• Condition arguments and return arguments are different: a failing bathroom must be rebuilt regardless of what the payback calculation says.
• Rules, rents and requirements change over time, so confirm current letting requirements, tax treatment and costs with the relevant authorities, ZATCA and your suppliers at the time you act, and take any legal or tax question to a licensed adviser rather than relying on an illustrative model.

Limits of this example

Every figure above is an illustrative assumption used to show the method, not a quote, valuation or market rate. Costs, rates, fees and regulations change and must be confirmed with the relevant authority, lender or supplier before you commit.

Domira designs and delivers interiors as part of the building, not after it: the finishing schedule, the joinery and the services coordination that decide whether a space looks built or assembled. Share the space and Domira will tell you what it would specify and what it would leave out.