Managing Your Renovation to Maximize Returns and Minimize Headaches

By Jeff Reed

I have heard numerous stories about renovations that have gone bad and it seems that everyone that has managed a renovation or hired a contractor has a story or two about a brutal contractor. Over my 25 years of experience renovating, I have seen numerous battles between contractors and clients. The following is a recipe that I have concocted on how to successfully manage beautiful renovations for high profits – without needing a black belt in Kung Fu to combat the contractor.

I attribute a lot of my success managing projects to having a proven team that I use over and over again. I know which Electrician in Tacoma is trustworthy, which material suppliers to avoid, and who I can call upon if someone cancels or pulls out. I keep them sharp and don t hesitate to replace them quickly if they stop performing. If I only have a couple new trades per job, then I have control as a manager. In my years as a General Contractor, I would always prefer to use my trades rather than my client s suggestions for tradespeople.

The most difficult part of managing a reno is trying out a new trade and it never seems to fail: you think you finally have the perfect renovation team, you ve worked together on several jobs and you finally have rhythm and speed and pricing sorted out. However, your plumber is on holidays, or your electrician is sick and you need a B team. But my cousin is an HVAC contractor! Numerous conversations are required about payments, scope, timeline etc. Ideally you won t be introducing too many new trades at a time.

The more new trades you use, the less control you have on price and timelines. Build a great relationship and foster it, as you would with anyone else on your real estate team. If you need to hire a new trade, get several prices on your project and meet the tradespeople that will ACTUALLY be doing the work. Do not settle, or hire the first contractor that walks in the door. One negative tradesperson can drag the morale of an entire team down. I prefer to teach people to interview contractors rather than refer my contractors for them to use. Do your research. Look online for reviews. If you’re thinking of hiring someone like Multi-M Contracting, look on their website (multi-m-contracting.com/) to make sure they’re legitimate. Do everything you can to avoid hiring someone that is going to add unnecessary stress to the project.

Before you even pick your contractor, you have to know precisely what you want so there is no beating around the bush. Take inspiration from other buildings and do your research. For example, if you are building onto your house in your renovation, maybe a barn, new shed, garage? Shop around. Will it be made of steel or metal? Take notes from the steel buildings missouri has to offer – they are known for their structures. Then, when you and your contractor meet, you will have a clear perspective of exactly what you want and so will they.

When considering the Contract, consider the following things to look for in a well written contract:

• What are the acceptable times of day to work?
• What will be done with construction garbage?
• How will the jobsite be left at night (broom swept, dangerous items removed)?
• How long will the work take?
• Who will do the work, Contractor or sub trade?
• Will the trades have all necessary licenses and insurances?

The Scope is a detailed list outlining the work that will be done. Oftentimes, it refers to a part of the drawing or to pictures for clarification. It should be thorough and clear. Look for things such as:

• Who will provide materials?
• When should materials be on site?
• List what is included AND what is not.
• Have pricing broken down on an item per item basis.
• The contract should outline what will happen if an item on the list is deleted and what happens if items are added.

The more information the better, as this is where most issues occur. If it is not in writing, it doesn t count . This means that there is always enough time to write things down. Ensure both parties sign for change orders. Most quarrels can be avoided by proactive communication.

Drawings to scale with measurements
The purpose of the drawings and pictures is to convey what the project will look like when complete. Spending the time to create a complete set of drawings up front will save you a lot of time in the back end and will limit the opportunity for misunderstandings. Once again, the more information you have, the better. Don t underestimate the time required to complete a set of drawings. For example, a basement reno could take upwards of several weeks to design by the time changes and revisions are made. I try to get a designer or architect to do my drawings for a fixed price. These professionals know that I make firm decisions and seldom deviate from the plan once we ve submitted the drawings for permit. If you have the budget, particularly for large scale renovations, something like 3d architectural rendering can help you to visualize the final project and highlight any changes that need to be made before the project is underway which can save on costs in the long run in the form of labor and materials.

Empower, don t micro manage
Over the years I have worked as a contractor on some of the most beautiful homes in Toronto. Some of the richest and most successful people have had trouble finding trades because they are hard to work for. I recall a time I was installing 140 cedar hedge trees in a yard the size of a golf course. The owner sat out on his back deck and counted the trees as we installed them. He spent the bulk of the day watching us with distrustful eyes like we were trying to cheat him. I couldn t wait to finish that job. On the other hand, another client treated us with fresh lemonade on a hot day while we were installing shingles on a roof. We gave her a good price on her fence afterwards.

Show them the money
Now that you ve taken the time to set out in your contract how much the job will cost and when payments are expected, when the contractor gets to the stage where payment is expected, make sure YOU are on time. Imagine if you worked at a bank and expected to get paid every second Friday. If your boss gave you excuses on Friday afternoon for why he couldn t pay you, how would you feel about him or her? How would your family feel about him or her?

Once pricing has been established, don t try to change the amount or the frequency. I recall a colleague of mine that contracted a trade to do a tile job. He needed it done right away. About half way through the job my colleague found another trade with a better price. He fired the first trade and hired the second one. How do you think the first one felt? Do you think they would work for him again? Never burn a bridge unless absolutely necessary. A project manager is useless without his or her trades.

The next time you decide to manage a renovation, take the time to get it in writing. A clear, detailed scope, together with plenty of drawings and pictures, can form a rock solid foundation for a great addition to your portfolio. Remember to enjoy the ride. Everything you learn can be used over and over again as you build a portfolio of well-designed purposeful renovations for your clients and tenants.

Jeff Reed has been renovating homes in and around the greater Toronto area since 1989. Today he leverages what he has learned over the years to manage his small collection of boutique rental suites that he built from the ground up. In his spare time he teaches others to manage renovations on their investment properties. He loves EMPOWERING his students to build beautiful homes and to proudly improve the face of our Canadian cities.
Reach Jeff at: jeff@priority-management.ca.