March 24th, 2012
DIY and Property Management
The Globe and Mail newspaper recently had a great article about landlords doing their own repairs. In the industry this is called DIY (Do it Yourself). It’s a great read for new and experienced landlords alike.
Where Can I find the Article?
The Globe and Mail story is called “Landlords face pitfalls when they go the DIY route” and can be found here.
Ask any landlord, contractor, builder or small real estate investor the one tool they have in their DIY renovation arsenal, and the answer is invariably the spreadsheet. Most property owners with some years of experience behind them have crafted a list of must-do projects as they inspect their latest investments. The spreadsheet, making up years of gained knowledge on a variety of projects, is the key to that successful renovation.
Peel back the spreadsheet onion and investors reveal the projects that are essential in making the most amount of profit for, what they hope is, the least amount of cost. Especially in a volatile economic climate with the fear of a double-dip recession, property investors and landlords are taking it upon themselves and “DIYing” their projects to ensure they are attracting the best tenants and/or buyers for their properties.
DIYing and the economy
Owners and landlords are enhancing the value of their properties on their own more than ever before. Cost is always the number one factor and certainly the economy has heightened the need to cut expenses as much as possible.
Even though uncertainty in the economy can create buying opportunities for investors, would-be investors need to be aware of the pitfalls those investments might bring.
Our Friends at the Ontario Landlords Association are Interviewed
Two members of the Ontario Landlords Association were asked to provide comments.
The economy has not been strong since 2008, so more and more landlords who would have normally paid a contractor are now forced to do their own repairs and renovations,” one OLA members says. “Doing your own repairs and renovations is really a key point of landlords these days; the days of slumlords are over if you want to get good, qualified tenants.”
When you are renovating a rental, your goal is to maximize return on investment and to attract quality tenants. Your personal tastes are not as important; the goals are different,” another OLA members stresses. He adds that most new landlords’ biggest mistake is overrenovating. “Granite and stainless steel in a poor-quality neighbourhood is not going to attract top-quality tenants.”
Scott McGillivray of ‘Income Property” on HGTV Also Provided Advice
Scott’s show on HGTV can be a little controversial with veteran landlords. The main criticisms are that things seem to always end up a little ‘too perfect’ for Scott’s clients. Despite that, Scott provides some good advice for landlords.
The kitchen is of No. 1 importance,” said McGillivray. “I have a sublist of how much work needs to be done in the kitchen.
The bathrooms are the next on the list and, again, a checklist is created. Then I look at all the hardware in the house, which I know is really easy. And then I look at how significant the flooring is in terms of needed work.”
The Key Points for DIY Improvements
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. Remember:
1. Be realistic about timelines
2. Walk before you run
3. Understand local rules, regulations and legislation
4. Play safe
5. Know when to ask for help
To discuss this welcome to the Landlord Advice Forums here.