I recently showed a valuer around my latest ‘refurb’ project so I can refinance it and get all my money back out.
I actually finished renovating it about two weeks ago, just in time to let the tenant in. As the paint was still wet in the bedroom, you could say I was cutting it a bit fine.
As I drove away, I had one of those “Was it worth it?” and “Would I do it again?” moments. Of course, the answer to both those questions is “Yes” and in any case, I’ve bought my next project and it’s already crying out for my personal attention.
This isn’t the first refurb and project management job I’ve attempted myself, but it’s the first one I’ve been so closely involved with in a few years. Usually I appoint agents to keep an eye on things, but as I have now started targeting properties nearer home, I thought I’d have some fun and save a fee by doing it myself.
Looking back, it’s surprising how much I’d forgotten since I last did this, so while it’s still fresh in my mind I thought I’d jot down some notes to ease the process next time.
Here is my top 10 list of mistakes I made while refurbishing a property, but which could be made by any property entrepreneur.
1. Be careful not to create just another ‘job’ for yourself. The property ‘gurus’ tell us that we should avoid doing the donkey work ourselves. Otherwise we spent days, evenings, nights and weekends slaving away over soggy wallpaper and lumpy plaster, or worse, creating new jobs for ourselves. Depending on how much work there is and how long it takes to do it, a quick calculation of our hourly rate might put us ‘just over broke’.
The trouble is, if you try to do too much on your own, you will inevitably slow the project down and increase costs in the long run. After all, you can only do one job at a time. Unless you’re a skilled craftsman, any job you do will take longer than it would a professional. There’s also the strong possibility that the quality of your work won’t be as high, or the risk once you’ve finished that you might have to get someone in to redo what you’ve spent hours or days attempting.
Decide from the beginning that you’ll get the experts in. Yes, you’ll have to pay them, but unless you’re in the trade yourself, you’ll find they can do any job far quicker and to a much higher standard. In fact, if you plan the project properly, you can have one, two or even three trades on site at the same time, considerably speeding up how long the project takes.
Time is money and while you’re working evenings and weekends to get the job done, bank interest (or the opportunity cost of your funds) is quietly mounting up, while your profits are gradually being eroded. Of course, because of my own enthusiasm, I happily managed to ignore my own advice here, which is why we have:
2. Do any decorative work only when your tradesmen and contractors have finished. I didn’t need an expert to tell me that the central heating system required a good overhaul and upgrade. The 1960s gas fire in the dining room was coming away from the fireplace. So, too, was the gas fire in the living room, revealing a back-boiler that had seen
better days. Several rooms needed radiators and some of the existing ones were undersized and needed replacing. My problem began when the heating engineers weren’t able to come for a week. As I had nothing meaningful or pressing in my diary and as I was winding down for my holidays a week later, I thought I’d take a few days off and do the decorating myself.
And so I spent a very satisfying week with a B&Q budget tub of magnolia matt. It was all a waste of time of course. You can’t install new rear radiators and reposition a boiler without disturbing the I. Replacing the back boiler with a combi also meant that I could create more floor space in the small bedroom by getting rid of the airing cupboard. As the hot tank came out, it split, leaking green water into the living room below and staining the ceiling and a wall. Never mind, to my rescue came:
3. Partial redecoration doesn’t work. Now, when I first bought this property, it was obvious that most rooms would need to be redecorated, but in comparison with the rest of the rooms, the lounge, hall, stairway and landing all seemed splendid. I decided they were good enough and budgeted my time and money accordingly.
When the central heating engineers had gone and I saw my first feeble efforts at decorating trashed, I decided to act on tip number 1 and get someone in to do the decorating. As it happens, I knew someone who is very good, very quick and charges very reasonable prices.
“Typical gas fitters,” he muttered, somewhat disparagingly, when he saw the damage the heating engineers had done. I started him in the dining room downstairs and it wasn’t long before it was stripped, papered and painted. I looked at the living room through the dividing door from the dining room. Somehow, what had seemed like one of the better rooms just didn’t seem up to standard. I added it to the list of things to do. When downstairs was finished, my decorator went upstairs and made a fantastic job of the bedrooms. Viewed from any of these, it was now evident that the hall and upstairs landing were actually poor and shabby, too. I added these to my list of things to do …
4. Always overestimate the amount of work required. When I bought the property, apart from the upgrade to the central heating and the need for a new kitchen, all the work seemed superficial and cosmetic; in fact, mostly redecoration. It was only when we started stripping paper that we saw how bad the plaster was in many areas. It wasn’t so apparent through the many layers of wood chip, but it was too poor to stay. Once uncovered, we realised that the five layers of wood chip were obviously there to add structural stability.
After the heating engineers had gone, the electrician came in. In theory, he only had a couple of hours of work to do, wiring in the cooker and hob in the new kitchen and running a new double socket into the utility room. As he chased in the cables, large areas of poor plasterwork came away from kitchen walls. To make matters worse, while trying to wire in the new socket, he dislodged a brick in the partition with the stairwell, which popped out and ripped the wallpaper. Now there was yet another area of re-plastering required. At least I’d already decided to redecorate the stairwell.
As we worked through the property, re-plastering extensive areas of wall was added to the ‘to do’ list. Waiting for the plasterer to fit me into his busy schedule severely held up the decorator and added another two weeks to the job.
5. Make a plan of which materials you’ll need and when. On the first trip to the DIY warehouse, it’s easy to get carried away and buy all the things you think you’ll need, even if you don’t need some of them until near the end of the project. If so, you’ll suffer two consequences:
Firstly, you’ll be constantly moving materials around because they always seem to be in the way of where you’re working.
Secondly, it unnecessarily impacts on your cash flow. Money is much better off in your bank account than in the till at Wickes. Don’t forget, an unprofitable business can keep going with a positive cash flow, whereas a profitable business will go broke if the cash flow is negative.
There’s no point buying materials until you really need them. If you don’t sit down and think through the logistics of the whole project in detail from the start, it’s easy to overlook materials that you do need now. Because of bad planning, I went through a frustrating spell of having to go each morning to B&Q or Wickes, all because we needed something that I’d forgotten to buy the previous day.
6. Try not to allow your tenants too much say in what happens before they move in. About two weeks before the house was ready, a lady appeared on the doorstep and asked the builders if the property was ‘to let’. I could tell immediately that she was a sincere and trustworthy lady and, although normally I wouldn’t rely on my intuition, I decided I wouldn’t need to get references. She explained that her granddaughter, an unmarried mother and student in the nearby city, had been burgled on numerous occasions and needed to move.
This property was ideal because granny lived in the next street and could keep an eye on her. She was also willing to guarantee the rent and to pay on behalf of the granddaughter by direct debit. Because she lived close by and because I’d agreed to let the house to her granddaughter before it was finished, the downside was that she was able to ‘pop in’ and ask for the kind of extras that I wouldn’t normally undertake.
For example, she requested a fence across the backyard, so that her great-grandson could play safely without wandering off into the road. Fine, but the chances are that future tenants will want to use the yard for parking. I compromised by providing gates at a not insubstantial cost, at a time when I was already over-budget.
7. Do ask the tenants what they want . Yes, I realise this is something of a contradiction, but my not asking the tenant what she wanted also increased costs. Within a week of moving in she had decorated two entire rooms, papering and painting over my brand new decorations. If I’d known, I would have left them as they were and saved around £350.
8. Always overestimate the amount of time the project will take. In theory, when I first prepared a rough schedule of work, I thought that the property would be finished and available to let after about three weeks. To be on the safe side I budgeted for four weeks. Of course, it didn’t work out that way. There was more work than I had first anticipated. Builders disappear halfway through a job for a week or two and things just take longer than you expect.
As I said earlier, waiting for the plasterer delayed things by at least two weeks. Having to redecorate the living room, hallway, stairs and landing added at least another five days to the decorator ’s work.
9. Don’t underestimate how much it will all cost . As a rough rule of thumb, no matter how carefully you plan your budget and estimate costs, always add on at least another 5-10% to cover any unforeseen circumstances. Because I didn’t do this, I was over-budget by the time the last layer of paint was applied.
10. Don’t overlook the small things. I can tell you that when you’re settling down to a day’s work, it’s highly irritating to find that you’ve forgotten to bring all the little luxuries we take for granted at home. This list will include tea and coffee, milk, sugar, teaspoons, mugs, washing-up liquid, soap, tea towels, towel, radio and, last but not least, toilet paper.
Not quite so urgent, but also occasionally essential, are cleaning solutions of various types, bleach for the toilet, dusters, rubble sacks and a decent heavyweight vacuum cleaner.
To save a lot of grief, especially with your builders, these should be the first things you take to the site. When your mind is focused on ordering the big stuff like a kitchen or bathroom, or a full set of double-glazed windows, they are easy to overlook.
So was it really worth it? Yes. Despite being over-time and over-budget, the tenant is in and has paid the first month’s rent upfront, along with her deposit. I have also benefited from ‘forced appreciation’, that is, an increase in value through improvements and repairs.
Not only was it worth it, I can’t wait to get on with the next property, an identical house only three streets away. But this time nothing is going to happen until the central heating engineers and the electrician have finished and are off-site. And this time I’m only going to watch and advise. I’ll leave the real work to the experts.