Managing renovation costs for properties
As part of being a landlord and managing numerous properties, there will over time be updates made to the homes in order to increase the value of the property. There is a large amount of upside to this as a successfully completed and communicated renovation can help to attract more tenants and drive up rent for your property. In order to make sure that this is profitable, it is essential that any projects are effectively budgeted and these costs are managed to ensure they do not spiral out of control.
Some effective methods to ensure this is not the case include:
Having an effective budget - It is quite common for many property managers to set a rough budget but not keep to it due to the vague nature of it. By setting a concrete budget with any potential buffers for additional scope which has been considered ahead of time allows you to constantly measure progress relative to costs incurred and check to see that things are on track.
Regular check ins - A budget is a plan but a plan can be rendered useless if it isn’t stuck to. In order to stick to a plan, property managers will need to ensure that they are carrying out regular reviews to gauge whether the costs are lining up with any original quote provided by contractors.
Communicating with contractors - At times, it is very common for more work than was initially stated to be carried out which the property manager is unaware of until they are invoiced for the services carried out. To avoid this, it is important to maintain strong communication with contractors and enquire about regular updates on what has been completed to ensure that the scope of the project has not expanded beyond what was initally planned.
Keeping on top of all of this can be hard but definitely worth the costs that can be saved from ignoring it. You want every project that is carried out on your properties to be profitable and easily discernible amongst potential tenants. Managing your renovation costs by having an effective budgeting plan in place is the perfect way to guarantee you rest a little easier when it’s time to get this done.