6 Tips for Renovating Your Home
Continuing our B.R.R.R.R. series, today we’re discussing the renovation process.
Welcome back to our series on the B.R.R.R.R. method, which stands for ‘buy, renovate, rent, refinance, and repeat.’ Last time we talked about buying and finding properties, so today we’re going to talk about renovation and some things you should be thinking about when you’re going through the process:
1. Find a licensed contractor you trust. They’ll know what permits to pull, intelligently put together a bid, and keep an open line of communication with you throughout. I can’t stress enough how important communication is; it would be better to work with someone who over-communicates than someone who leaves you high and dry. When it comes to contractors, you get what you pay for, sometimes the cheapest bid isn’t the best one.
2. Walk through the property with a contractor before making an offer. You need to know upfront how much it’s going to cost to complete your renovations with the finishes that you want. You don’t want to get under contract only to find out that you’ve vastly overpaid for your projects.
3. Know the end-user and the neighborhood. It’s really easy to over-improve a home for the neighborhood it’s in, especially in a long-term hold.
" It would be better to work with someone who over-communicates than someone who leaves you high and dry."
4. Incorporate a buffer. For example, if your contractor estimates your renovations are going to cost $50,000, I’d encourage you to budget for $55,000 or even $60,000 to account for unforeseen repairs or expenses.
5. Know your timeline. Time is money in the investing world. Whether you’re flipping or renting, if you blow past your timeline, you could be costing yourself thousands of dollars in overhead costs, which could eat up all your profits.
6. Maintain consistent oversight. It is a good idea to check in on the property every couple of days or at least once a week to stay up to date on how the process is going. That said, there’s a fine line between consistent oversight and micromanaging, so try to find a balance.
If you have any questions about renovations or real estate in general, don’t hesitate to reach out to us. Stay tuned to our blog for our next installment on the B.R.R.R.R. method: rent.