This week I was lucky enough to hear Dan Pattrick speak again to an audience of property investors. Dan is an incredibly successful and values led property developer and his firm Dapatchi currently has tens of millions of pounds worth of development under construction. [I’ll put a link to the summary of that last talk that I captured at the bottom of this post, if you’re interested- It’s called 8 Success Principles From An Inspiring Property Entrepreneur].
There were 20 points in total that Dan shared in this recent presentation and I’ve summarised 6 of my favourite here.
#1 DON’T BE AN INTERIOR DESIGNER
Whilst you might have aspirations of being the next Kelly Hoppen or Ashley Hicks (Interior Designers), when it comes to creating a home for others it’s what the end market needs and wants that’s important, not what you like. So to this end, speak to a range of selling/letting agents in the relevant area to understand your end user first.
#2 PAINT EVERYTHING WHITE
Following on from point #1 there’s no point painting everything in expensive F&B Elephant’s Breath when there’s every chance it won’t be to the taste of your end user. From a cost saving point of view, painting walls, ceilings, skirtings etc all white not only saves money on the cost of the paint (fancy colours do cost more), it saves a massive amount of time. Because decorators don’t have to do endless amounts of ‘cutting in’ to border contrasting colours, it saves a vast amount of time and therefore labour cost. In addition, having a blank canvas (ie all white) provides the opportunity for the new owner to put their own stamp on the property.
#3 USE EXPENSIVE UNDERLAY, NOT EXPENSIVE CARPET
I love this point, and it’s a learning I’ll incorporate going forwards. A quality underlay will make a less expensive carpet feel more premium. If you’re letting the property, especially if you’re using it for serviced accommodation like we do, then you’ll know that carpet damage is highly likely. If it’s an inexpensive carpet it’s going to be less painful to replace it when required.
#4 AGREE A FULL SPEC WITH YOUR CONTRACTOR BEFORE WORK STARTS
In other words, define as much as you can in advance and agree a very detailed schedule of works. This upfront investment in attention to detail will remove ambiguity and help keep the project on budget. For larger projects (ie over £100K) you will likely require a JCT contract with insurance.
#5 MISTAKES WILL BE YOUR BIGGEST COST
In other words, having to double back and retrospectively correct something will have a big impact on both your timeline and your project cost. The key things to get really clear on are:
-Building regs
-Fire strategy
-Sound requirements
To avoid the painful retrospective work, consult with the relevant experts and members of your Council before work starts so you can work to the appropriate requirements from the outset.
#6 DESIGN CAN MAKE HUGE SAVINGS
Dan emphasised that this is the one thing that outweighs all other points on a large project. The design of the project must be commercially led from the perspective of analysing the cost to benefit of different layouts. The example that Dan shared was in relation to converting an existing building into multiple flats – by finding a way to add a second entrance/exit to the building it negated the requirement to install an expensive sprinkler system, thereby saving what would have been an additional £30-50K sprinkler system.
There you have it, those 6 tips I’ve picked out have the potential to save you £tens of thousands in future projects. A massive thank you to Paul and Dan for the presentation.
On a smaller scale to this but still very relevant, Chris and I were out viewing property for single lets this week and we captured a brief video from one of our viewings. We take a look at a repossession property that to many would look cheap from the outside, but a walk round with an expert builder (our Chris) quickly highlights why many projects like this would require a refurb budget that unfortunately kills the deal.
P.S. The link to that first post summary of Dan’s last presentation is http://adaeroproperty.com/8-success-principles-from-an-inspiring-property-entrepreneur/