What are some renovation mistakes that hold new investors make?

[Alan Asriants]

Would be interested to hear from new and seasoned investors!

I can start and others can add as well

-  Under improvement - I think lots of people try to get away with doing the bare minimum but expecting top dollar rent and higher quality tenants. Doing a solid renovation gets you the best rent and the best tenant base

[Eric Fernwood]

Hello Alan,

You can waste a lot of money and even alienate the tenant segment your property attracts. In this post, I will provide a few examples of renovation mistakes.

• Buying properties with high-risk renovation items. See the table below. I talked to someone who was desperate to sell their property. The property had mold, they reason that it couldn't cost more than $5000 to remove. $25,000 in, they were still not done.

• Not listening to your investment team. Many owners decide to redecorate to their taste as opposed to doing what their investment team recommends.

• Being cheap - I'm not talking about being cost-conscious; I'm talking about failing to do what's necessary to attract the target segment. For instance, a client refused to spend $350 to clean a property's front yard, which was covered with piles of dirt, weeds, and trash. His position was that he wasn't going to spend another dollar on the property until a paying tenant was in place. However, the house remained empty for three months before renting out at less than the market rate. Similar, but market-ready properties rented out at full price within days. By saving $350 upfront, he lost $1,800 x 3 = $5,400 in the long run. Don't be cheap.
• Renovation Creep - A common problem is specification creep. For example, the kitchen faucet we currently use costs $100 (plus installation). However, I once had a client who preferred a fancier faucet that cost $300. Switching to the more expensive faucet did not increase the rent or decrease the time to rent. In fact, based on my experience, the more complex a system is, the more likely it is to break.
• Contractors & handymen - All important details should be put in writing, such as the start date, duration, paint brand and colors, materials included, necessary permits, and more. For new vendors, it may also be helpful to video record the contractor or handyman walking through the property and explaining each task that they will do according to the written quote they provided.
• Fixed price – No matter how low the rate, you cannot afford to pay hourly. Additionally, it will never get done.
• MAJOR RISK - If you don't have a local person with construction experience to walk the property at least every other day, the job will take longer, cost more, and the quality will be worse.

These are just a few of the renovation mistakes I have seen.