Buying property to make a profit is great fun as well as hard work, therefore maximising the profit you set out to make is essential. I’m going to share with you the four key factors to ensuring you succeed at pocketing your profit.
Before you purchase your renovation project you should have a project plan. There are a number of different electronic project management tools, or you could use a simple spreadsheet. For those who are not into using technology at all then just use a pen and paper. One simple way to do your plan is to list the activities that need doing down one side of the page, sort them into a priority order of when you think they need doing, and then put the weeks along the top of the page.
Whatever tool you use, create a plan that you can follow, and one that will allow you to check if you are on or off track each week. Generally the longer it takes you to do a project the more it will likely cost you, and particularly if it takes you longer than you originally intended.
Understanding what needs to be done when and being organised is the next step to ensuring you retain your profit margin. Using your plan to look ahead and organise trades and materials in advance can make a huge difference to your project. There can be a domino effect on things not going to plan if you have even just one trade who doesn’t do what they are supposed to do at the right time. Some trades get really busy, and if they are delayed by someone else to get the work done on your property, they may not be able to rearrange and get on with your work when you need them, therefore holding everything up whilst you make new arrangements. The same issue can apply when ordering materials. Whilst many products can be bought from local suppliers, be mindful of items you are intending on using which are more unique or bespoke, and be sure to order them in plenty of time. Being organised can definitely save you lots of money, so keep working ahead of the current activity on your plan, and you will have the best opportunity of maximising your profit.
When a renovation project goes on for many weeks it is essential to stay focused. The initial momentum and excitement of a project will normally mean your attention is focused on what needs done in the first few weeks. As the weeks pass and the normality of every week looks much the same, it is far too easy to lose focus and get distracted on other more exciting opportunities. It really doesn’t take much for something to go wrong that you don’t notice, or a few weeks to slip past where the jobs in your plan aren’t quite finished, if you are not focused on it. Having regular scheduled meetings and conversations with the key people on your project are so important, and making sure these happen week in week out during the works is essential, as getting it back on track can often be extremely challenging and is pretty much guaranteed to cost you more!
The final point I believe can ensure you achieve your profit, is to make decisions in a timely manner. Before you start a renovation project you will likely have made many of the key decisions, however I’ve certainly never done a refurb that hasn’t required changes or new areas to be considered during the project. When this happens it is obviously important to consider all the options and the potential impact on other parts of the project, however gathering your facts quickly and making your decision at the earliest opportunity, should have the least amount of negative impact both in time and money.
So in summary, having a project plan in place that can help you stay organised and focused through the delivery of the project, with key decisions being made as quickly as possible, will help you execute your renovation in the most effective way and ensure you maximise your profit margin 🙂
For more information on how we can help you on your property investment journey, or to book a free coaching call with one of our coaches to discuss any areas you need help with, visit www.thepropertymentor.com or call 01244 760213.