Tips for estimating the repair costs of an investment property
When it comes to estimating renovation repairs of a potential investment property, there is no easy formula or simple answer. However, there are some tricks you can apply to help your estimations for a better reflection of your potential outlay. By applying these you can be more confident of remaining in profit should you decide to embark on the project.
Tip # 1 – Err on the side of caution
Without being negative, always opt for the worst case scenario when estimating a cost. It is far better to be overcautious than fail to budget sufficiently. This is also your best chance of working out if an investment is going to be profitable from the outset. You never know, it could end up costing you less than you anticipated which all goes towards your profit.
Tip # 2 – Assume you’re paying a contractor
Whilst you may be able to undertake many repairs yourself, always factor in the cost of hiring someone just in case. If you do end up carrying out the work then you can always pay yourself! The other benefit of this is ensuring that you have a realistic idea of what different trades cost so on a future project if you are too busy, you aren’t in for a surprise.
Tip # 3 – Build contractor relationships
Contractors can be your best ally or worst foe depending on the relationships you build. Look for trustworthy tradespeople and treat them well. In return they will look after you and your investments.
By following these tips you can make cost estimations far easier on yourself. Do your research, know average rates for your market and keep looking for the right opportunities.