subject: How to Stay On Budget During Your Next Real Estate Rehab Project [print this page] How to Stay On Budget During Your Next Real Estate Rehab Project
Starting a real estate rehab project can be a fun, exciting, and sometimes scary experience for any new real estate investor. This article will hopefully help you keep your rehab project more fun and exciting, and less scary! :-)
Before you even buy your real estate rehab project you should have a good time line and budget for the rehabbing that is going to be completed before selling or renting the house. This time line and budget should map out when specific construction is going to be completed and how much money will be needed to get the constructions done.
If you're not a numbers person, and it's one of your first rehabbing projects as a real estate investor, it can be easy to get caught up in the day to day struggles of the project and lose track of the big picture. Hopefully you're reading this before it's actually happened to you!
Here's the plan! Make sure that you review your construction time line and budget either ever week or every other week. This will keep you cool headed about where all of your money (or hopefully your hard money) is going. Once you have gone over the weekly or biweekly budget make sure that you let your general contractor know how everything is going. Ideally the contractor knows exactly how the time line and budget is going, but don't hold your breadth.
If you've determined that your real estate rehab project is on track be quick to praise your contractor (and specialists). People are always motivated by praise so give it out whenever possible.
On the downside if you've determined that your contractor is behind schedule on your project make sure that you meet with him and go over the time line and budget so you can readjust, and get back on track. This isn't a time to scold your contractor, you just want to let him/her know that you're on top of things. They should respect that and make sure they get the job done quickly and within the agreed upon budget.
As a quick tip, if you give your contractor bonuses for getting the job done faster and fines when the job is done too slow they will stay super motivated to get the work done fast! This should be in the contractors contract! Yes you should have a contractors contract!
