Wednesday, June 14, 2023
I’m back with 5 helpful tips that you can use on your next renovation.
You read that right, another 5 ways to increase your return on investment by reducing your renovation costs.
If haven’t read my blog titled How To Make Money on an Investment Property, I highly suggest you do. After reading it you’ll know how to accurately calculate your 1st year return on investment. I also breakdown my “FOUR PILLARS” which include: Cash flow, Principal Pay down, Market Appreciation, and Forced Appreciation. If you understand what Forced Appreciation is after reading, then you’ll know just how helpful these renovation-saving tips are in maximizing your return on investment.
It's feeling like déjà vu around here with another 5 great tips; let’s get right into it!
1. Be your own Project Manager
Project managing could reduce your renovation costs by 20% or more. You’ll see immediate returns by not hiring a General Contractor; eliminating their employees’ hours, the markup added to their subcontractors’ costs, and their own markup fees.
However, be prepared to put in the work and assume all responsibilities and liabilities for the renovation. If you don’t have the knowledge or the capability to take on this role, it could end up costing you more in mistakes. If you can pull it off, that’s money in the bank.
2. Self-perform work
How much of the work can you do yourself? It’s a question that every avid DIYer asks themselves. By self-performing some specific tasks during the renovation, you’ll save on your renovation costs. If you have the confidence and skills necessary, do light demolition, paint, or install LVT flooring.
Maybe take on these tasks in the evenings or during the weekend. It will help save you money and expedite the renovation schedule. Another option is to purchase the finish materials and fixtures yourself and coordinate timely deliveries for the work on site. Any of these suggestions will keep more money in your pocket. Decide what works best for your personal circumstances.
3. Reuse materials
Kitchens and bathrooms are widely regarded as the rooms of choice to spend the majority of your renovation budget. They are in line with curb appeal for making the strongest impression on homebuyers and tenants, but the amount of money you can spend on them is endless.
By keeping the existing kitchen layout, painting the cabinets, refinishing the countertops, and adding new hardware, you can significantly reduce your renovation costs. Take this same approach with the bathroom cabinets/counters. Instead of replacing the sink and bathtub, have them re-glazed. They even have specialized products to paint over the existing tile.
Simplify your approach and prolong the lifespan of materials until replacing them cannot be avoided. It is an approach that could save you thousands on your next renovation.
4. Optimize the floor plan
Maximizing your existing layout, while minimizing expenses is how you save money during a renovation. Consider when estimating your budget whether major changes to the existing layout are actually worth spending that money on. Prudent planning could mean the difference between a very expensive renovation or a moderate one. Here are a few examples:
Instead of moving major components, build your design around them. It’s much simpler to add new underground plumbing and electrical wiring than to redesign your structural supports or hire a mechanical engineer to redesign the HVAC system.
Use these tips and envision the final layout. Maximize the existing space to minimize unnecessary expenses. Having a solid plan before starting any project is the best way to avoid costly mistakes down the road.
5. Get multiple bids
If you decide to only get a single quote, you wouldn’t have any way of knowing whether you got a good price or were taken advantage of. Establish a competitive market to get the best possible pricing. You can do this in several ways:
For the more experienced investor, working with a design professional like Infinite Design Services who can prepare a detailed budget estimate, will give you accurate costs before ever receiving a contractor quote.
Maybe someone skimped on materials, or someone missed a critical scope of work because they misinterpreted something on the drawings. When you’re satisfied and have chosen the top bid, you’ll know you received a competitive price.
There you have it ladies and gentlemen; my 5 ways to reduce the cost of your next renovation project! But before I bid you adieu, how would you like one extra way to save on your next renovation?
Enjoy my BONUS tip:
6. Negotiate
You may salivate at the thought of negotiating a lower price, or you may be very timid about negotiating and causing conflict, but if your goal is to save money it’s something that you must do. The art of negotiation is an entire subject that I’m not about to cover here. All I can really say is that you have nothing to lose by asking either a contractor or supplier for a reduced price.
Here are two examples:
I’ve never had a contractor or supplier raise their price because I asked for a discount.
The worst answer you'll hear is “No”, so why not ask the question? You’ll be glad you did.
Now I bid you Adieu!
(a.k.a. ""The Real Estate Rehabber")
Bestselling Author, Real Estate Investor, and Entrepreneur
I want to empower new and seasoned real estate investors alike to navigate the challenges of property rehabbing with confidence.
These resources include essential tips and insights, that every real estate investor can use to excel in the competitive world of property rehabbing.
Whether your goal is to flip houses, create long-term rentals, or execute the buy-rehab-rent-refinance-repeat strategy, "The Real Estate Rehabber" will educate viewers on how they can plan and manage property rehabs.
