Profitable property renovation is a juggling act. Note the operative word here is “profitable”. Anybody can renovate a property – but not anybody can make a profit.
Renovating a property for profit involves balancing the three key variables of a project: time, money and quality. When you increase one variable you impact upon the others – for example, to improve on quality you end up spending more time and/or money to achieve a better finish. A prime example of this, was me deciding to remove the wallpaper throughout much of the property – this increased the quality of the finish, but had an impact upon the timings of the project – it took longer to remove the wallpaper and prep the walls.
On any property renovation you have to be clear from the outset what the budget is, and be sure it is realistic. However, budgets are not some ideal set of “stuff you need/ want to do” – budgets are created by:
a) What needs to be done to renovate the property
b) What the resale price is for the property
c) How much money you want to make
Every property and every budget is different – however, what does remain consistent is the necessity for a contingency budget. No matter how tight your budget, you must always be prepared for when/ if things go wrong. I usually work on a margin of 10% of the total project budget to be my contingency. Other people may work on more or less, but for me 10% has always served me well.
So today, this contingency has been put to good use…
Today the electrician has visited to do (what I thought would be) a partial rewire. To cut a long story short – it needs a full re-wire. We have negotiated a good price for the full rewire of £1800. However, this has obviously had a huge impact on the budget and the timings. Where before I had allocated £700 for the electrics – I now have to find an additional £1100 for this job. Truth being – that’s now blown my contingency out of the water. The project had an original budget of £8000 – thus a 10% contingency gave me £8800. I’m now £300 short from my contingency which means we are looking like we are set to go over-budget on the renovation.
The only thing I can do now to stop this spiraling (and I mean it – this is the stage when costs start to spiral) is to look at what else we can cut back on to keep the “juggling act” going. What happens at this point, is that you start spending more time, in a bid to try and reduce the money you may spend elsewhere.
In this case, on this property renovation, this has now meant – where earlier in the day I thought I was going to call a landscape gardener in to sort the garden – we have now had to tackle the garden renovation ourselves. Again, we are back to the project triangle of: time, money and quality. I admit, a landscape gardener would have produced better quality, however if I want to try and keep a rein on the budget and ensure this property renovation remains profitable, I have to then put in the time to try and keep this on track.
I am grateful, to my friend Jo (green fingered expert) who came over this afternoon to lend a hand and help us out, and Dimitris has shown amazing manly strength in getting rid of the tree stumps (it’s amazing what super human strength you can find to try and stay on budget!).
I would also like to say at this point, thank you so much to so many of you who emailed me with ideas and suggestions for the garden – and especially to those of you who offered to come and help me for free. I am touched by your kindness. Thank you xxx
Here is progress so far:
Until next time…