A good philosophy for treating real estate investing like a business is to minimize the risk and maximize the return on investment (ROI) at all times. One way to do this is by keeping remodeling costs down without sacrificing quality in the process. Certain real estate projects have certain expenses that are fixed, such as taxes, insurance, and closing fees. Apart from these, materials, and labor are the two main remodeling expenses where your efforts to be frugal can make a difference. There are ways to beat ever-increasing costs so that you can stay profitable on flips or rentals.
Continue to read to find out 6 tips for saving money on materials and labor for your next project.
1. Know Your Local Stores Personally
Do you know which stores have the least expensive ceiling fans, appliances, flooring materials, and paint? Costs can vary widely from store to store, so it is important to get to know where the bargains are in your town. Talk with other investors too, and find out where they're buying their materials. Networking is a great way to discover new stores or services that can reduce your costs. Make sure your local stores know that you're an investor or contractor and that you will be making numerous purchases from them. Sometimes these businesses are inclined to give special deals on materials to contractors or investors.
2. Check Online Deals
You may regularly get emails from stores letting you know about upcoming sales. You can save large percentages at home goods stores by timing the purchase of new goods, such as cabinets when they are on sale.
3. Buy Contractor Packs
Our own Preston Russ offers this information to homeowners:
"Some big-box stores will discount materials if bought in large quantities. Even little items like doorstoppers or switch plate covers are cheaper when bought in bulk packages, rather than individually. In some stores, you can knock a couple of dollars off the original price of a typical ceiling fan if you buy three or more at one time."
4. Get a Store Credit Card
An in-store credit card can save you upwards of 5% off every purchase, even if the item is already on sale. When you spend several thousand dollars on appliances, cabinets, flooring, and other materials, a 5% discount can save you a few hundred dollars. With that card, you have a choice of 5% savings or six months without interest.
5. Clip Coupons
Stores like Lowe's or The Home Depot will mail or email you coupons that you can use to purchase materials at a discount. The Home Depot often gives 10% off on paint, which saves you $50 or $60. Lowe's occasionally mails coupons out offer $50 off on purchases over $250, or $10 off $50 or more.
6. Establish Relationships with Good Service Providers
The best way to minimize labor costs is to find good service providers and then stick with them. Refer them to other investors or friends, and make sure they'll thank you by charging you less than they might charge others. The best way to save on labor is to do as much of the work yourself as possible.
Conclusion
By following these six tips, your remodeling expenses will either stay the same or even decline, even if the costs rise. This will in turn increase your ROI on every project. Interested in learning more about saving money during a home rehab? Use this guide to create a good philosophy toward saving money when rehabbing your Forgotten Coast of Florida home.
