Questions to Ask Your Builders Before Starting Your Property Refurbishment
Maybe it should be “Why” you need to ask this specific question to your builders on a refurbishment of a Professional HMO or Social HMO or even a buy to let.
Have you ever had this low cost builder….A bid comming from a one-man, uninsured contractor whose only overhead was the vehicle he was driving. We prefer not these type of builders. We make sure they all have Liability insurance as well as registered under CIS.
Our typical question to ask every contractor we work with…
How long will it take to finish the project?
Let’s say from today’s morning drama we needed a door installation. How long will take the contractor to install….. 8 hours to finish. That’s $125 an hour! If it takes him two days to complete it’s still $62.50 an hour.
The going rate for a skilled rough and finish carpenter is around $25 an hour, and most of the ones we do business with can finish a simple sliding glass door installation in about half a day. You can do the math very quickly and see that this job shouldn’t cost more than $250-$300 in labor.
Bottom line
Always Ask This Question
Whether you’re fixing and flipping houses for a living, or doing a simple remodeling project at your house, always ask the contractor to separate their labor and material costs. BTW you will need this if you are CIS registered….
Then ask…
How long will it take to finish the project?
By doing this you can quickly figure out how much the tradesperson is making on an hourly basis.
Keep in mind, skilled trades like plumbers, HVAC techs and electricians will charge between $80-$100 per hour. They command these rates because they have to carry more insurance and usually have to be licensed.
But for the basic stuff (i.e. paint, carpentry, flooring, demo work) you need to know the hourly cost.
It will give you more negotiating leverage, and save you thousands.
The reason I am pointing this out to you is all the so called property investors who use sourcers. Sadly I have seen so many investors get burned by sourcers. They leave the work unfinish…never start or simply non communicative. That is why we work in the model of refurbishing properties….tenanting them…keeping some…and selling some that are complete turnkey. All works completed….should have little or no maintenance plus from day one cash flowing. Same for us. While I am waiting to sell the occassional property I am cash flowing. Cash flow is key. Always keep your rooms of your HMOs full…Never get lazy and have voids. I am paranoid against voids. I will lower rent….or whatever it takes to rent a flat or a room in our professional HMOs.
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