The idea of buying a rundown property, renovating and selling on for a significant profit sounds easy in principle. However, many property investors fail to appreciate the finer details of home renovations and the need to put together a “power team”. So, what exactly is a power team and how might this assist you with property renovations in the future?
What is a power team?
In simple terms a power team is a group of individuals each of whom has a specific skill and a specific role in a project. In effect they are all different sized parts of a larger jigsaw and when it all comes together it is beautiful. The various elements of your power team will depend upon your budget, your own experiences and skills and the property renovation in question. Some of the more common elements to a property renovation power team would include:-
For many people the first challenge when looking at a property renovation is to translate their ideas into design drawings and property structures. It is vital that you have a close relationship with your architects and designers because these are the foundations of the overall project. A healthy relationship would also see different parties suggesting different styles and ways in which to improve the property. This intimate relationship comes with time and the ability to address potential issues at the earliest opportunity is vital.
The issue of raising finance is obviously very important and the closer your relationship with your mortgage broker the greater the opportunity to secure funding. Many people fail to realise that a simple tweak here and there, a shaving of interest rates and changing of the term can have a massive impact upon the overall cost of renovations. From the outside looking in, the cost of bridging loans may seem excessive but if the uplift in property valuation is significantly greater, this can be a game changer. So, once you find a mortgage broker you can trust they will become an integral part of your power team.
Every project needs a manager and in many ways it is the skills and experience of the manager which will dictate the level of success/failure. In simple terms the project manager is the buffer between tradespeople/service providers and the property investor. Very few property investors have the time, or even the experience, to take a hands-on approach to managing renovations. As a consequence, trustworthy and experienced project managers, able to think on their feet, can be priceless.
Whether you are simply buying a property for yourself, to rent or sell on, there will always be a requirement for a solicitor to ensure the legal path runs smoothly. In simple terms, any delay in completing a purchase, sale or legal application, will increase the cost of your finance and the overall cost of the project. Many solicitors will specialise in different areas so finding one with experience in property renovations (including planning permission, etc) should ensure your projects run smoothly.
Estate agents/letting agents
The more successful property developers will have various relationships with estate agents and letting agents across the country. Indeed some will buy and sell the same properties through the same agent often adding an incentivised commission bonus for a specific sale price and speedy transaction. A strong relationship with letting agents will ensure that your properties are rented as quickly as possible thereby maximising cash flow. As the relationship grows, estate agents and letting agents may approach you with properties for sale or potential tenants.
Insurance is obviously a very important element of any property purchase and renovation. For those who renovate properties on a regular basis there are insurance specialists who can offer competitive rates. You will often find that insuring numerous properties under one arrangement can also lead to significant economies of scale and cost savings. Therefore, there is potential to make significant savings in this area which is something many people fail to appreciate. Every pound you save is a pound in your pocket!
Historically builders and tradespeople have often attracted an unwelcome reputation for missing deadlines and cost overruns. Finding companies/individuals who are both time conscious and price projects in the correct manner can save you a fortune further down the line. Builders, electricians, plumbers, tilers, roofers and painters are just a small selection of the type of parties you can bring together as part of your power team. Trust works both ways, if your power team trust you to provide projects in the future they will do their best to deliver on time, within budget and to a high standard. This kind of arrangement is a win-win for all parties.
Confidence breeds confidence
Perhaps the best way to look at a power team is the way that confidence breeds confidence. If all elements of the team are working together then your project should go relatively smoothly. If there is a weak link in the chain then this can be catastrophic and put your project in danger. It takes time for parties to get to know each other, to bring the best out of each other and have confidence in each other. Organisation and planning ahead is the key to any successful renovation project with realistic budgets and cost controls also very important.
The Holy Grail for any property developer is the ability to go into the market, buy a property for renovation and bring in their team to finish off the job. Yes, the investor can oversee the project but day-to-day management and the various related tasks will be carried out by the team. This ensures that property investors/developers can focus on finding new properties and selling renovated assets. It may take some time to put together a power team which works for you but it is certainly worth the effort!
Check out Just Do Property’s Expert Panel. They have a hand chosen list of experts to help you build your power team.
You can also sign up to their website to receive helpful property tips, property news updates and discount property deals. Sign up for free here.