In previous blog posts we’ve talked about renovating rental properties – i.e. deciding if renovating a rental is the same as renovating your home, we also talked about not blowing the budget so now lets talk about not blowing the timeline.
One way to make money on a property is renovating it. Buying a property at a good price and then renovating allows for a good rental yield and also adding capital value to the property.
However, one of the ways to start cutting into profits is by that renovation dragging out, meaning you cannot rent out the property by the date you had hoped and we want to avoid that at all costs.
So how do you undertake a ‘successful project’ – meaning one that comes in on time and on budget (see tips above)?
It’s not fool-proof, but it helps. It’s a tool that pretty much every planner uses, from mums’ trying to get their kids to school on time, to party planners and renovators. You want that property to be tenanted by April 7th 2014 so how do I make that happen?
Break down those months into weeks and days. What needs to get done by when to make it happen? What padding have you added each week just in case?
If that is going to be a realistic date then you need to understand the full scope of the project before you pull out a sledge-hammer. You need to get your team crawling all over that property and figuring out if you will need permits and approvals, and what work you need to do, before you can really agree to an end date.
If you do need permits, the approval process can be frustrating if you haven’t done it before, but if you have a qualified and smart team they will walk you through it and have it smoothed out in no time. A renovation on a rental hopefully means that you’re not adding a second floor to a heritage building or getting cosy to the property line. If you’re thinking on such a grand scale, then you’ve bought the wrong property.
Renovations can still be impressive however, knocking down walls to make an open plan layout, or adding an en suite can make a rental look completely different. These changes are likely to get through the planning and approval process faster than if you were thinking of a fancy 3-bedroom addition.
Getting a fully qualified team in place who have done these kind of renovations before will help you no end. You may be a DIYer and want to throw a sledge-hammer around – and that’s fine. But make sure you work with your contractors to set up jobs that you can help with – jobs that you can do after hours that will help the contractors during the day time.
Develop a great relationship with your Project Manager, or head contractor to get the work done. Find out what they are thinking in terms of time, find out what you can do to help – after hours most likely – and then look at the calendar. After going through everything with a fine tooth comb, after getting all supplies on site (if possible) and allowing for issues such as finding more dry rot than anticipated, does that April 7th deadline look like it will happen?
Now with everything in place, then and only then pick up the sledgehammer.
What tricks do you have when trying to get a project finished on time?