Before You DIY, Calculate This...

[Jeff M.]

What is your time worth?

Re-flooring a unit myself NEVER saves money. On paper, it may be enticing to DIY and save $500. BUT in the time it takes to lay the floor, I've potentially lost $5-10k!

What the Pergo??!! The time spent taking on a task you're not expert at, is time you're stealing away from activities that yield bigger returns. The time spent on your knees wrestling with laminate, could be spent finding other hot properties, sending out yellow letters, talking to prospects, wholesaling properties, etc.

Are you a handyman or an investor? Depending on the scope of the project and level of experience, sometimes it makes sense to DIY BUT only if it’s the most profitable use of time. How valuable is your time? For a handyman it's $25-40/hr. How much is your investing expertise worth?

Aside from being the most precious, non-renewable resource, time is our universal currency. Every day we trade action for time. Our productivity sets the exchange rate. Our choices determine the ROI. Unfortunately, the Big Bank o' Time will never get a sweet bail-out deal. It's up to us to vigilantly monitor, defend and grow our balance sheets.

For a week, keep a Time Tracking Sheet. Analyze how you spend yours and adjust accordingly. Don't just spend time, invest it wisely. I hope this post was a good use of mine. (It sure beats laying linoleum!)

[Jon Holdman]

Saying "spend your time doing deals, not working on one deal (whether its fixing the floor or negotiating a short sale)" assumes a couple of things. One is that you can make more money by working on another deal than dealing with the current one. The second is that you actually spend that time doing another deal. If I spend two hours replacing a broken faucet that ended up being replaced by HD for free rather than paying a plumber $200 to buy a new faucet and replace the old one, then I think that's a pretty good payback for my time. Further, I'd most likely have spent those two hours watching TV, not working on some other deal.

When I really did put in a laminate floor, about 750 feet in about 36 hours total, I saved myself something like $2000 (yes, I priced getting it installed.) That's $55 an hour, which isn't as good as fixing that faucet, but is nothing to sneeze at. And, I have no ability to buy another rental at the moment, nor any interest in wholesaling or such, so I have no other deals to be doing.

But I agree with the underlying thought that we just fitter away a lot of hours every day. We should consider if we're doing something that's actually productive or just "goofing off", even if the goofing off seems productive.