For those who want to learn on the fly, managing your own house renovation has a pretty steep learning curve. Make a mistake, and it will cost you more than three times to fix the problem that you have created. Follow these 10 steps to house renovations, and you will avoid many of the problems that plague first time house renovators.
Step 1 : Patience
There is an old saying that “Rome wasn’t built in a day.” Before a house renovation is started, there is a significant amount of work that needs to go into the planning and execution of the project. From specifying materials to identifying contractors to obtaining building permits…all of these actions will require patience and time to be completed properly. Actually, in most cases, it takes longer to plan out a renovation than actually takes to complete one.
So patience my young little whippersnapper…take your time and plan it out properly.
Step 2 : Goal Setting
Every house renovation project has different goals. If you are renovating your home, you will look at the quality and the cost of the project differently than if you are renovating a rental property.
Before any planning is initiated, goal setting is required to determine what is the reason for the renovation, and what you are looking to accomplish. A house flip is different from a rental property, than owning your own home. Each of these will have different priorities and place different values on things like quality, time and cost of the project. Even the choice of contractors will be dictated by the goals of your renovation. This is the most important step in the house renovation process.
Step 3 : Create a Needs/Wants List
Go through your project and identify every single item that you would like to renovate.
Write it all down.
Put every single item on that list and once you have it completed, I want you to separate each item and put it either under the heading of “Needs” or “Wants”.
What’s the difference between these two, you say?
Well…items that are listed under “Needs” are items that need to be renovated…no matter what. If you have a leaking roof, then you must categorize that as a need. If you have lime green carpet that has fallen out of favor with the family, you need to put that under “Want”.
As much as that lime green carpet might be an eyesore, it is not a need. Meaning, someone can continue to live or rent or buy this house with the lime green carpet, but a leaking roof is something that needs to be renovated before a catastrophe occurs with this house.
Just be careful in putting this list together and use your renovation goal as the filter to determine whether an item belongs under “Needs” or “Wants”. As an example, I have seen too often, newbie renovators rush in and put windows under the “Needs” column. Unless the neighbor’s kid has hit a baseball through each window of the house, I find that windows can be left alone and should be put under the “Wants” category…especially if the budget isn’t there for these types of renovations.
Step 4 : Determine a Budget
We can want the moon, the stars and the sky, but if the money isn’t there, then there is no renovation. You need to determine the amount of money that you have from personal savings, lines of credit, government grants, loans, etc. that you can use toward this renovation.
You would be surprised at how many opportunities exist to get the funding that you need for a renovation.
Once you have that dollar amount, then you need to determine the cost of the renovation. This is a difficult part and it will require you to call a great variety of contractors to give you a quote on the work.
You can ask me nicely and I will send to you a Renovation Calculator that will allow you to plug in the values and items that you want renovated, and it will calculate the cost. It took my team and I several months to put this calculator together, and it was a lot of work to compile all of these costs in a clear and concise manner across North America. You can find the Van Sturgeon Renovation Calculator at VanSturgeon.com.
Step 5 : Seek Professional Help
All of us are not able to design a space and determine whether a wall can be removed. That’s why there are professionals who look after this type of work.
Depending on the type of renovation and the area that the house is located, you may need an architect, interior designer and/or a structural engineer for your house renovation. Which one you will need will be based on a variety of factors that are specific to your abilities and the area that the house is located.
To figure out what you need, a trip to the building department is a good start. Their advice is free and they will provide an unbiased opinion of who you should use for your renovation project.
Step 6 : Create A Scope Of Work
Can you make a strawberry cheesecake without a written recipe?
Let’s pretend that you did so…how’s that cake going to turn out?
Uggh…I’m not coming over for dessert. Sorry!
Too many times, I find these newbie renovators that want to tackle a house renovation without any plans or drawings or specifications. They just want to wing it, and figure it out along the way. I can assure you from the thousands of renovations that I have been involved in over the last 30 years, that there has been no successful renovation completed without a Scope of Work.
A scope of work is a document that describes all of the work that is to be completed, and the contractor that will be responsible for the completion of each component of the renovation. The scope of work can go into detail about how the work is to be performed and what materials are to be used throughout.
All materials will have been selected and included in this document so that everyone knows what is involved and there are no excuses for quality, mistakes and time spent. Starting a house renovation without this scope of work in place is like watching a slow motion train wreck.
Please do not be caught in a train wreck! It will hurt very badly…
Step 7 : Tender & Contractor Selection
Once you have all the above steps completed, now the fun starts! You contact a number of contractors and you invite them to bid on your project. Finding good contractors will not be easy, and you’ll need to ask for references and contacts from people that you know like mortgage brokers, real estate agents, and other contractors themselves.
Every contractor that you identify will be given a copy of your scope of work, and you will request a quote from them at a certain date. Once you have accumulated all of the quotes, you narrow down your choices to several contractors for each component of your renovation. You schedule meetings with each one, and you ask certain questions and engage them in a process that ensures that you will find someone that will provide the very best quality, is on time, and on budget through the whole renovation.
Step 8 : Sequence
You’ve identified the contractors for each component of work in your renovation, so it’s time to start the reno!
Your primary responsibility is to ensure that all the contractors are coordinated and available when needed at different junctures along the renovation process. Many contractors will need to come for two visits. The first visit is to do the “rough in”, which means that they are running the service or work behind the walls. The second visit is the “finishing”, where the contractor finishes the work on the outside where it is visible to the eye.
Sequencing of contractors at the right time will ensure that there are no mistakes and no items left uncompleted. Your responsibility is to act as a coordinator and a conduit between all the different contractors, who rely on you to provide guidance on when they should come and complete their work.
Step 9 : Stick to the Scope
Based on my experience, house renovation will go over time and budget because there are deviations from the established scope of work. There is a reason why a good scope of work is important, because you have committed to a set of plans and specifications that you will not change.
It is very easy to start down that slippery slope and start to add and make modifications to the renovation. From the upgraded toilet to the additional square feet of hardwood flooring, all of these extras of a few hundred dollars here and a few hundred dollars there, will not only add to the cost of the whole renovation, but also in the time to complete.
Remember…time is money and any delays in the house renovation will ultimately cost you thousands of dollars, so stick to the scope.
Step 10 : Devil is in the Details
As a contractor, I can tell you that the last 5% of a renovation are the most difficult to complete. Many newbie renovators see the light at the end of the tunnel, to only realize that they still have a long way to go until they get to the finish line.
The difficulty will come from a variety of factors such as the ongoing battle to get contractors to come back and make repairs, to trying to get contractors to finish their work. There are a number of precautions that you should take to ensure that contractors abide by their obligations and live up to their terms of the contract.
Provide adequate notice to the contractor of deficiencies and don’t get too ahead with the payment of work completed. Always make sure that there is a significant chunk of money that is still left outstanding to be paid to the contractor, so that it either forces them to finish their work, or you can find another contractor to complete the work from the balance owing.
It’s tough those last 5% of a renovation, but as long as you keep a level head and don’t fall victim to overpaying a contractor, you will cross the finish line.
For more information on house renovations and real estate investing, visit VanSturgeon.com to help you in your real estate investment journey.