“Even if you’re not that skilled at physically doing things, act as the project manager so you at least learn from hiring out the trades,” he says.
Nothing in the DIY world should be taken for granted and even though costs can be saved and value can be added to projects, novice investors may find themselves trapped by some of the pitfalls of renovation.
1. Be realistic about timelines Mr. McGillivray says investors should make sure they can afford to carry the property for 25 per cent longer than originally anticipated as timelines always become an issue. Mr. Brennan agrees and says, “It’s guaranteed that something will come up you didn’t plan for both dollar-wise and time-wise.” He adds that investors should try not to add anything during the project, should not procrastinate, and should try to do the challenging projects first and compromise later if needed.
2. Walk before you run Again, Mr. McGillivray says novices should tackle projects they can deal with. For example, if an investor already owns a home, try putting an income suite in the house first to get a feel for the challenges of being a landlord.
3. Understand local rules, regulations and legislation Mr. Gulaty says for Ontario landlords, issues such as not being able to collect security deposits, the inability to evict bad tenants in a timely manner and the fact that tenants can qualify if their income matches the rent (even though other expenses are not accounted for) all play havoc with the landlord experience. Mr. McGillivray also adds that checking with the city you are operating in and understanding the local bylaws on building apartments within houses or subdividing properties should be first and foremost in investors’ minds.
4. Play safe “If you’re under pressure and you’re stressed and your time frame is quickly slipping away from you, sometimes you rush and you may get hurt,” notes Mr. Brennan. And besides your own safety on the job, the safety of the investment and your tenants should be ensured as well. Says Mr. McGillivray: “Above everything than just the cosmetics is the safety of the house. Typically you need a proper inspector or home inspection done to determine if the roof needs to be replaced, if anything needs to be rewired, if there is a plumbing issue or structural issue. Those things take precedence over any cosmetic renovations.”
5. Know when to ask for help “I’ve learned a lot, even if it’s from a guy at the hardware store,” quips Mr. Brennan.
He says don’t be embarrassed to say “I don’t know.” Take money out of the budget, if necessary, and ensure the project is done right.
Reflecting the clientele With all the planning, budgeting, avoided pitfalls and lists of materials, the investor interested in “DIYing” their projects must not forget the most important part of the equation – the tenant. “It’s all about imagining what the good tenant wants and doing it in a cost effective manner,” stresses Mr. Henderson. All the work in the world will not attract the right tenants and provide the income being sought if the renovations lack purpose. “Your renovations have to reflect your clientele. And then you can give slightly more to give you an advantage [over your competition]” says Mr. Gulaty. With that information in hand, DIY landlords can plan their projects with direction in order to save money, enhance value and participate in the renovation game in a meaningful and profitable way.
From Canadian Real Estate Wealth Magazine – the only monthly newsstand publication dedicated to individuals and businesses focused on building value through property investment, covering topics such as values and trends, mortgages, investment strategies, surveys of regional markets and general tips for buyers and sellers alike.