With an increasing number of high-potential properties on the market, developers large and small can find plenty of opportunities for renovations. Whether dealing with a single-unit residential unit or an apartment complex, a little bit of investment often goes a long way in improving long-term property values and resale potential.
Some renovation guidelines can be easily ignored when dealing with specific aesthetic or design concerns, but others are subject to strict regulations and legal standards. For those who fail to follow the law when renovating a property – or who simply cut corners in the wrong ways – a potentially painful financial situation can follow.
To avoid this situation, let's identify some of the biggest property renovation mistakes any developer should avoid.
Skirting Laws Regarding Older Buildings
Houses and other buildings that were built before a specific time period used different materials that could be hazardous to health and safety when replaced or repaired. Many developers are aware of these regulations, but anyone who is dealing with an older home should first consult with local government agencies and professionals in key areas.
One such example is lead paint. Many older buildings utilized lead paint, which can be very dangerous when disturbed. This is one huge mistake nobody wants to make: obtaining credentials such as ZOTApro certification is valuable for a reason. Any developer that disturbs a building with lead paint and who does not have a lead certification could face penalties of up to $37,500 per day by the EPA.
Focusing on High-Value Rooms Only
Particularly true when renovating single-unit homes, developers who aim to improve only the most “efficient” rooms of the home with respect to ROI may be shooting themselves in the foot. While bathrooms and kitchens certainly bring the best returns when factoring in renovation costs, they are not all that home buyers look at when considering.
In many cases, a poorly-renovated home with an exceptional kitchen or bathroom won't sell itself. As such, renovators could be stuck with a substantial investment that requires even more expenditures in order to move on the market in a reasonable amount of time.
Some additional ideas for renovations with great ROIs include additional insulation, new doors and windows, and energy efficiency upgrades.
Underspending on Labor, Overspending on Materials
The quality of any renovation project ultimately determines its appeal, which in turn determines whether or not top asking price can be obtained. When renovating residential and/or commercial properties, it is critical to balance labor and material costs for optimal efficiency.
Quality cabinets, flooring, lighting and other renovations can truly go to waste when shoddy labor is involved in their installation. As such, developers want to always rely on professional contract work to handle any renovations outside of their areas of expertise. This will help avoid any potential losses in building value caused by poor craftsmanship.
Additionally, any potential legal issues or code violations will be far less likely to occur when using quality labor that understands the intricacies of their trades and what measures must be taken to be in compliance with the law.
Developers can run afoul of both the law and profitability if they are not careful. By ensuring the best labor possible is used, avoiding common renovation areas while ignoring other problem spots and ensuring that all laws are followed, some of the biggest mistakes and financial penalties can be prevented.