There are a number of different reasons why it isn’t a great idea to get a builder to come along and estimate for all your potential refurbs when you do property viewings.
To start with, not all of your offers are going to be accepted, so if you start asking your building contractor to come along to 20 viewings a week, it is going to go down the wrong path. You won’t be doing deals on all of the properties so you won’t be giving them the work they are estimating for and then when you really need them they won’t be interested. So it really isn’t a good idea to get builders to come to viewings. The best solution is to learn how to do a rough refurb estimate yourself.
Of course, this isn’t going to be easy to start with. But further along the line, you will be able to walk into a house, spend 20 minutes walking round and have an estimate to work off. So how do we get to this stage? We work from a checklist system that enables you to put together a rough estimate.
So to start with you will use a viewing checklist and will be making notes on the works required. You walk around the property and you detail all of the work that needs doing – new windows, carpets, plastering etc. Then you make a call or calls, to get contractors to give you the rough estimate for generic types of jobs. For example: How much to re-skim a standard sized living room? How much will a rewiring job be for a three bedroom house? You collate a long list of all the rough estimates for each type of job that you come across.
Then you tally up the costs for all of the jobs for that property and you have a refurbishment estimate. It is best to go with a 10% contingency, just in case you missed something out – just a bit of a buffer with the costs. When you put your offer in, you base it on the asking price, minus the refurb estimate, your reductions, stamp duty etc. The more that you practice going round with your checklist and putting an estimate together, the better you will get. You can even practice it at friends’ houses, it’s perhaps best to explain what you’re doing and get permission before you start poking about in their house or they might not stay friends for long!
So compile your list of prices for work, go on those viewings and go through the checklist to allocate an approximate price for each item and add it all together for your refurb estimate – no builder required.
Get your own copy of a Refurb Costs Planning Template from the download link below.
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