Property renovation: How to get your money’s worth

As one of the most popular value-add strategies, renovation is often considered by investors to improve the value of their property, but as it rarely comes cheap, some hesitate in fear of being unable to recoup the additional costs.

However, during a recent masterclass hosted on Smart Property Investment’s sister brand REB, Managed App’s co-founder Thom Richards explained how that process can be refined to reduce costs and ultimately ensure long-term benefit: A balance between tension and relationships.

“I'm a big advocate of competitive tension. But saying that, I also believe in tradie relationships as well. Demonstrating that you are always hunting for the best value service at the best sharp price, without compromising the quality, is important,” Mr Richards highlighted.

“Using a quoting tool or a marketplace is something that I’d definitely encourage them to consider.”

He also recommended reading reviews online or checking out previous works in order to gauge the tradie’s expertise.

“Being able to find really top quality tradies quickly and understand who they are and get them from a highly-rated source is really important,” he said.

Technology

For LJ Hooker Ashfield’s head of property management Marc Crisafulli, technology plays a big part in maximising returns from renovations.

From selecting tradies based on their qualifications and recent jobs, where the sheer number of options in the market often seems overwhelming, to comparing quotations, property owners can definitely use tech to their advantage.

“The marketplace that’s available, you can search recent jobs and qualifications and attain the quotes. You’re shopping around and we’re trying to get a good deal,” according to Mr Crisafulli.

Streamlined communication

Once builders are onboard, Your Empire’s founder Chris Gray said that good communication is key to ensure that the owner and the builders have an understanding of the goals for the property.

Here’s when property owners can often reap the most benefits from property managers.

“Our idea is to deal with one person… So, the very first property that I renovated for a client, I had someone doing the kitchen, then we got someone else doing the bathroom. Then he said, ‘Do we provide a skip?’ We don’t need two skips at the same place. So then, someone came to me and said, ‘How about I match all those prices, but you just deal with me?’,” Mr Gray explained.

“It’s just like our clients. They want to deal with us instead of managing all of the trades. Between us and the tradies, we have kind of people in the middle that manage that.”

This system provides efficiency, thus making sure that the property does not remain vacant for so long and, ultimately, that the renovation turns out to be worth its weight in gold, he said.

“It’s good to find someone that sees the big picture and not just that one single job. That’s when they can actually do something under cost to fix the problem, because it’s all about the relationship,” he said.

Strategy

Finally, investors need to understand that different properties need different strategies, which is why due diligence is important before jumping into a renovation project.

“It’s different things for different people… If it’s something really simple, speed is of the essence, time is of the essence, as opposed to the high quality job that is needed when we’re talking about finishes and buildings and all those kinds of things,” Mr Richards said.

For instance, it wouldn’t be smart to run around for five quotes just for a leaky tap, according to him.

“Do I just want somebody that can get out there and do something as quickly as possible to prevent any issues or keep my tenant happy? As opposed to finding the best possible price of the highest quality finish?” he said. 

“Property managers who understand what the priority is for each job are really important.”