AT Home with Sarah Beeny - December 2011 - (Page 168)
10 ways to plan a renovation
Maximise your chances of being the next Sarah Beeny by working out your renovation and planning first before you buy anything
‘The one piece of advice I give to all developers is be prepared to work hard. Doing up a property is like a mechanic doing up a car: you buy a property and charge for labour, materials and a finished product that works.’
roperty renovation is not an easy way to turn a quick profit; it takes a lot of research and hard work to turn a wreck into a desirable residence. ‘I have never implied that property development is an easy business, but no matter what I say about it being hard, no one seems to pay attention to me,’ says Sarah Beeny. So what can you do to boost your chances of success?
There is no such thing as too much! It helps if you choose a property in an area that you know, but even then it’s crucial you find out sold prices of similar properties, what people are looking for, and how much they will pay (see point 7). And however tempting it may be, particularly if you are buying at auction, never go over your top purchase budget. Unless you are renovating a house to live in, the whole point is to make money and you won’t if you don’t get your figures right. ‘It’s an easy equation,’ says Sarah. ‘Take the initial cost of the whole property and add to it the fees incurred in buying it and selling it on: estate agents, solicitors, stamp duty, borrowing costs, survey, land registry, the planning and building control costs if you’re taking on major renovation, plus the realistic cost of the actual renovation or the decorating work. ‘Then add a 20% contingency for any unforeseen expenses. Subtract this total from the potential selling price. That’s your profit. In real life, it will probably be lower because the amount you think you’ll spend and what you actually end up spending are never quite the same.’
ReseaRch, ReseaRch, ReseaRch
Work out a realistic budget before you do anything. You may think you can earn good money developing, but only if all the figures add up. ‘If you are going to make any money, which is the whole point, you need to come up with a realistic budget and stick to it,’ says Sarah. ‘Itemise the work you want to do and price up each job realistically. Before you put in an offer, get an idea from a builder as to what renovations might cost. Your list of the costings should take you through every last detail, from planning and building control fees, any major structural alterations, to new bathrooms or kitchens, decoration, landscaping in the garden and furniture hire for when you come to stage your property ready for sale.’
safe and complies with all the legal health and safety requirements. ●Hires and pays all builders needed, as well as any sub-contractors. ● Schedules the work in the right order and ensures it is carried out on time and within the budget. ● Orders materials to arrive at the right time to make sure there are no delays in continuing the work. ● Is on site for at least three or four hours every day, six days a week. If the project starts to slip, then the project manger is the one who has to put in the extra work to save it.
This could add up to 20% on top of the development costs, but can be worth it, advises Sarah. ‘If you are working full time, you might have to bite the bullet and employ a project manager; decisions will be delayed and work won’t get done if you’re not around or you run into problems. Your mortgage company, however, will still want its interest, eating into your potential profit. Remember that the quicker you can turn a property around, the quicker you will be able to make a profit. If you want to make a career of it, it might be wise to hire a project manager for the first development, but watch what they do as closely as you can to get a good idea of what you will have to do next time.’ What your project manager does: ● Runs the development from the beginning stages until completion. ● Ensures that the building site is
emPloy a PRoject manageR to helP
An architect can be worth their weight in gold for bigger projects, providing solutions to space problems, and giving properties the X factor that will add pounds to your sale price. ‘You don’t always need an architect, but it’s a false economy not to use one on a big project where structure and details count,’ says Sarah. Architect’s drawings also help to avoid costly mistakes with the builders. If they have clear, precise drawings to follow, then you avoid any confusion. ‘We used an architect when we renovated a London townhouse,’ says Clive Irwin, 50, a developer from Kent. ‘The existing kitchen at the rear of the house was tiny, and dingy, and we could not extend. The architect came up with amazing plans that involved removing structural walls and adding a wall of glass at the rear of the property. It looked amazing and gave the property a real wow factor, and achieved the premium sale price that we wanted.’ >
emPloy an aRchitect
168 | DECEmbEr 2011
Table of Contents for the Digital Edition of AT Home with Sarah Beeny - December 2011
HELLO FROM SARAH
MAKE IT A DATE
PASTE IT UP
TO LET OR NOT TO LET?
KEYS TO THE DOOR
QUEEN OF THE CASTLE
TRICKS OF THE TRADE
BEST OF THE BRIGHTS
STORE IN STYLE
SHAKE IT UP!
NIGHT ON THE TILES
THE TEMPERATURE’S RISING
BURN BABY BURN
KEEP IT IN
DON’T BLAME THE TOOLS
AT Home with Sarah Beeny - December 2011