Successful property renovations require a significant expenditure of energy, time and capital. However, it is essential to make sure these resources are deployed in the most efficient manner possible, and below are some best practices for ensuring your projects are profitable.
Know When To Delegate
A good renovator is someone that knows their strengths and weaknesses, what they are skilled at and what they aren’t. Having a realistic assessment of your capabilities makes it easier to tell when it is best to delegate a specific task to someone else. Certain functions such as plumbing or electrical work require the attention of a professional who is both qualified and experienced. These are not things that should be attempted DIY; otherwise the result will most likely be disastrous. Another reason to delegate is because of opportunity costs. Even if you have some skills, a professional will do it faster and more efficient than you, as this is what they specialize in. When it comes to renovating you don’t want to be penny wise but pound foolish.
Maintain Meticulous Financial Records
Construction projects require a sharp eye which notices detail, but also the ability to keep track of costs and deadlines. Otherwise, the project could easily go over budget, which is a frequent investment mistake in the construction industry. A professional renovator is an individual who monitors every cent they spend, whether the funds are used for new cabinets, pest inspection or interest payments to lenders.
The thing to understand about money is that every time you give some to another party for services or merchandise your bottom line decreases. Therefore, tracking your costs will make it easier to better control your cash flow and develop fiscal habits which will allow you to gain a positive return on each dollar you spend.
Another advantage to maintaining excellent financial records is that you will develop a knack for estimating the costs for projects, so if a plumber or electrician attempts to give you a quote which is too high, you can recognize and reject it in favor of something that is more reasonable. In other words, it puts you in a stronger negotiating position. Last but not least, renovators who maintain accurate records will be in a position to receive deductibles when it is time to pay their taxes, and overall, your stress level will be lower.
Use Before Then After Photos Frequently
Get into the habit of taking lots of photos before and then after your renovations are complete. These photos can serve as outstanding marketing materials, showcasing your capabilities to the world. Another reason you want such photos is because should you decide to keep the property, you might want to speak the lender regarding revaluation. By presenting photos and comprehensive documentation, you can build a strong case for requesting a value increase. While most valuations involve an assessment of sales which are comparable, the photos will go a long way, allowing people to see what you originally paid versus what the property should be worth after renovation.