Be Clear on How Much The Works Will Cost Before Your Start
The amount you pay will depend on where you are located, the size and quality of the property you are working on, the quality of the work you instruct, how many quotes you obtain and how hard you ‘negotiate’ with your contractors, and even where we are in the economic cycle; in downturns builders are more likely to be looking for work and are more likely to discount prices.
Just to give you a rough guide, here are the kind of prices I would expect to pay for works to my properties in the North East, although you have to bear in mind that prices will vary greatly across the country for the reasons I’ve just given.
So, here’s a very brief list:
*Central heating for a 2 to 3-bedroom property: £3000 – £4000
*New windows and a new front and rear door for a 2-bedroom or 3-bedroom property: £4000, unless I buy the windows direct from a manufacturer and get my builder to fit them, in which case they’d probably be nearer £2,000 to £2,500
*Rewiring a 2 bedroom flat: £2,750 to £3,000
*A new kitchen fitted by my builder: £1,500, including built-in cooker and hob
*A new bathroom fitted by my builder: £500 – £600 including new 3 piece bathroom suite
*Tiling the bathroom: £300 – £500
*Decorating a 2 or 3-bedroom property: £2,000 to £3,000
*Cheap carpets for a 2 to 3-bedroom rental property: £800 to £1,500
And don’t forget to allow for a notional charge for your own time when you’re calculating or estimating the cost of the works. If you don’t cost out your time, you will be robbing Peter to pay Paul. Your time is a valuable resource and should be accounted for.
The same is true with interest. Even if you buy the property for cash and fund the building works with your own money, you must allow for notional interest payments, otherwise you’re really cooking the books. You have to allow for the opportunity cost of using your own money. After all, if didn’t use it to fund your project, it would be invested somewhere else, for example in the bank earning interest.
If you want to renovate property, either to sell-on at a profit, or so you can add value and then refinance and borrow all of your money back out to spend on your next project, you might be interested to know that I have rewritten and updated my best selling ebook The Successful Property Renovator’s Workshop.
This is a ‘course in a book’, which will take you through the whole process in detail including how to do your sums to make sure you make a profit, how to raise finance for the purchase and the project, and how to refinance when you have completed.
The good news is that I’ve taken all my knowledge and experience, which I have gained over the years from doing countless renovation projects, and have put it all down on ‘paper’ in this ‘easy to read’ ebook. In it I’ll show you how you can find, plan, prepare and do each project to ensure your own profitable success every time.
And none of this is just dry theory. This is all based upon my own, personal experience of refurbishing and renovating property, which is why I use case studies of actual properties I’ve refurbished, along with photographs, to illustrate many of the points made.
I’ll show you all the things I did right, so you can copy them, and all the things I did wrong, so you can avoid them. They say that ‘trial and error’ is one of the most effective ways of learning but I can save you the time, the grief and the cost of having to go through it all. Hopefully I can save you months, even years, of trying to work it all out for yourself!
To find out more, please go to:
Here’s to successful property investing
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor