Communicating with Builders on Your HMO Projects
In today’s hot property market and hot HMO market in Manchester finding a honest and hard working builder is not easy. If the builder is good invariably he will be busy doing other property investors buy to lets, Professional HMOs or conversion projects. Builders almost seem to interview prospective property investors who want to do HMO projects. Luckily for us we have several teams and immediately once works are completed my wife pays them. This keeps them up and ready for the next HMO project we are doing. We have 5 in conveyance and the market is getting tougher to find deals. For example we bought a 4 bed en suite in Salford last June for 78k all in with SDLT. Today 2 doors down, a similar house is selling for 105k. Then imagine putting in between 45k to 50k for full refurbishment to make a luxury HMO.
Today…even getting a call back is hardly the end of the process when trying to start with a builder. In fact, it’s literally just the beginning. You still need to get a bid from the contractor, potentially haggle over costs, approve the bid, get them started on the work, get them to update you about the work (if it’s a longer-term job), and get them to tell you when they’re done. If you are out of the area and do not monitor you are opening pandora’s box of hurt and possibly overcharges. You have to monitor and work in tangent with your builders. I had a recent conversation with a gent from the city who was busy in his investment job. He never visited the property and his sourcer who was supposedly managing the deal disappeared. Typical story…yet there are honourable people out there….
What works for us is to enhance the process to flow easily is communicate your expectations in terms of your desire for return communication. Each time you send anything to a contractor, that communication should include a mention of what you’d like to receive next — and when. Ie…time line of works to completed and payments amounts due. As well as require them to submit pictures and/or video of the completed work of the Professional HMO for your records. Most importantly is that you monitor this guideline. You need to be realistic as there are always surprises and legitimate delays. Fair and firm….and make sure you pay Immediately…builders do not want excuses on your HMO projects.
This is an example of our last Professional HMO we did with our JV partners