The study discovered that 18 per cent of landlords funded their last refurbishment with credit card debt or an overdraft.
And 12.5 per cent of landlords admitted to not knowing what finance options were available.
Among landlords yet to refurbish, 32 per cent expect to rely on credit card and overdraft debt and 31 per cent personal loans.
Of the landlords who have used finance to fund refurbishments, 18 per cent remortgaged. Further, 30 per cent expected to use a remortgage to fund future refurbishments.
Among landlords who would consider using mortgage finance, 31 per cent want to be able to access smaller sums from a loan facility during the project to help maintain cash flow and keep risk exposure down.
However, 30 per cent of landlords would choose to access a lump sum from a lender at the outset of a project.
Darrell Walker (pictured), head of sales, InterBay Commercial said: “It’s concerning that so many landlords are unaware of their finance options when undertaking such a project.
“Education is vital in order to ensure that landlords are no longer relying too heavily on their own personal funds to improve their properties. Plugging the knowledge gap will not only benefit the landlord, but the end tenant too.”
He added: “From our research we know that landlords value flexibility highly when it comes to choosing finance products for a renovation. This means finding the right product to fit the landlords’ circumstances.
“Brokers can play a valuable role in ensuring that landlords do access the right finance option so it’s important that they understand the range of support and flexible products that lenders can provide to help meet their client’s needs.”
The report, Unlocking value: The role of refurbishment in buy to let, was based on a survey of 720 landlords.