I just recently passed the five year anniversary of buying my first rental property! What a ride it has been. It was a detached home with an unfinished basement. As I chose a five year term, my mortgage was up for renewal this spring. I saw this as an opportunity to finish the basement, to get the property reappraised, and to refinance the property at the improved value (I can touch on this investor mindset in another post). Well, I just finished the renovation (managed the job myself) and I wanted to share some of the thoughts and pointers that I learned during the process. Hopefully you can use some of these on your next renovation!
Everything Always Takes More Time Than Projected
This is a pretty standard one. Things happen and it throws other things off schedule. Plan for this in advance and allow for a very conservative contingency period.
Get Three Quotes For Large Trades Jobs
Some of the variance in the quotes were huge. Sometimes these trades guys are too busy and give quotes almost as if they don’t want the job. Get three to make sure you know where you are at.
Don’t Always Take the Cheapest Quote
To build on the last point, the cheapest quote shouldn’t automatically be chosen. Make sure you understand the quality you are getting. Often the middle quote ends up being the best deal!
Ask for Referrals
Ask the professionals you work with for referrals to different skilled trades. Sometimes just saying to someone on the phone “so and so referred me” gets you better treatment. I wouldn’t refer someone to a friend unless I was very confident they would do a good job!
For Rental Properties Choose Neutral Materials
A good saying that is common in the real estate rental world is “choose things for 90% of people, 90% of the time”. Don’t ever choose anything ornate or too trendy as it might not be most people’s taste. Remember that your not living here…
Keep Detailed Notes
This project has been an invaluable experience to understand firsthand how much different jobs and materials cost and the time frames associated with them (drywall, electrical, plumbing, tile, paint, framing, etc). This will give me a big leg up on my next project. Document things on a weekly basis—or even more frequently—to stay organized.
Shop Around For Materials
This seems obvious but you can save quite a bit if you shop around for the larger materials you need. If you know you need to buy tile, but not for while, you can keep an eye out for sales and save hundreds of dollars.
Buy As Many Things As Possible With A Credit Card
First off, it will keep things organized by having many of the items on the same statement making for easy bookkeeping. You can rack up a boat load of points as well ☺.
Splurge on A Few Things
As long as it doesn’t break the bank, it’s a good idea to splurge on a few items. In my case, I did a large tiled glass shower, a shiplap fireplace with a sweet napoleon electric fireplace and some upgraded funky laundry cabinets. Now I have some nice selling features for the next renter or for when I go to sell the property.
Pay Your Workers Right Away
If your trades did a great job, pay them promptly to keep them happy. You can use them again in the future and having a list of these contacts is invaluable. If they know they will be paid fairly and promptly, they won’t think twice about working for you again!
I could go on and on about this renovation but these were some of the items I thought would be useful for our readers. See the accompanying videos and photos and tell me how you think I did!
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