One of the first questions potential renovation customers want to know when they call us is: How much is this renovation going to cost? We get the same question from homeowners and investors. Although this is a very difficult question to answer, I will do my best to explain it.
Doing a renovation project is much like buying a new car. There are so many options out there. And those options are added costs. For example, a basic pickup truck with no options could cost about $25k. However, it could get up to $50k or more once the buyer adds in the options to customize the car the way he/she wants it. After all, with this kind of investment you should get what you want!
If the average truck owner trades their vehicle within the first five years, why did they get so many upgrades? The reason is that most people (including me) understand the importance of getting what they want the first time so they would not have any regrets later on. Since the average person spends 30 or more minutes a day in their vehicle, they want to make sure they are riding comfortably in a quality car.
These same principles apply to most property renovation customers.
For homeowners, your renovation project helps create the environment you want to live in every day. Picking the wrong options will result in the wrong environment for you. Because of this, most homeowners will elect to go with the renovation that will make them happy for a very long time.
For investors, it’s tempting to go for the basic model. And in some cases, that might be the best option. However, considering adding in options could help increase the value of your property, help you justify increasing rents, and attract the type of tenants you want living in your property. These options might be going for quartz countertops instead of Formica, tile shower surrounds instead of a fiberglass shower surround, and installing LVP flooring throughout the unit instead of carpet.
Unfortunately, some customers only focus on costs and they will let the cost drive their decision. They’ll find a cheap contractor, which will result in lower quality of work, no warranty, and overall unhappiness with the new environment in their home. This would lead to regret and possibly more money spent down the road.