Regardless of whether or not you are a real estate investor, home renovations of any variety can prove to be costly. That is even before you factor in the return on your investment (ROI). Subsequently, any renovations you make need to reflect your bottom line. As an investor, you need to make sure any renovations you make are worth it in the long run.
Savvy investors are already aware of this, but there is always a way to maximize your rehab budget. In fact, finding creative ways to work within your budget is one of the smartest things an investor can do. One of the best ways to save is being flexible in your design. It’s not hard to find stores carrying discontinued, overstock or unneeded special-ordered items, and that can mean big savings for you. It may limit your color or what you’re able to do with design, but for those where price is a limiting factor, it may be a blessing.
Here are five additional ways to save when renovating your home:
Shop Online
As I am sure you are aware, online shopping has become a viable alternative to the congested, overpriced department stores of the past. More than ever, online stores are offering products and incentives that are attractive to consumers. Prices found online are even more competitive. However, for one reason or another, not everyone has taken to online shopping for their rehabs.
Regardless of what you are looking to purchase, there is a good chance you will find it for sale online. The availability of products on the Internet will work in your favor, as the market is much more competitive. You can save hundreds of dollars on an item by searching online for the best price using the model number, says Dan Fritschen, author of “Remodel or Move? Make the Right Decision.” However, be sure to include the cost of shipping. Some shipping costs will completely negate the deal you got by shopping online.
While shopping for a renovation online has its advantages, it is not without fault. As with any strategy, due diligence is to be exercised. In other words, use common sense. Shop at reputable stores. Established companies can be trusted and much easier to work with in case something goes wrong. Having said that, returns can be difficult with online purchases.
If you want to buy online, do it far in advance, says Fritschen. It could arrive damaged or delayed. “Delaying your remodel to save $100 is typically not a savings,” he says. Also, make sure you know the store’s return policy and customer service availability before buying.
Ask For A Discount
If you intend to buy a lot of product from one particular vendor, ask for a volume discount. Think outside the box: Get more customers for the vendor, and use that to wrangle a lower price. You should be looking to provide the seller with an advantage that would make them want to offer you a discount. You would be surprised at how often a vendor is willing to lower their prices if there is proper incentive.
Real estate is a people business. There is a lot to be said for those who establish a working rapport with others in their field. Bring a friendly and sincere attitude to the table every time you conduct business. “If you are friendly and considerate, oftentimes you can get a small discount of up to 10 percent,” says Fritschen. A little appreciation goes a long way. The friendlier you are, the more likely your actions are to be reciprocated.
Conversely, if you are not as comfortable with the friendly approach, just be up front. Simply say what it is you want done and what your budget is. If you have found the right contractor for your rehab, they may be able to come up with creative ways to cater to your needs.
You may find out that a cash offer could result in a discount, or that negotiations could lead to a win-win for both parties involved.
The worst thing the vendor can do is say “no.” What do you have to lose?
Sales Tax
Price conscious consumers have been known to shop around for a good deal. But why does bargain shopping need to be relegated to the products themselves? Individual towns, counties and states each have varied sales tax amounts. Any sales tax savings is essentially an automatic price cut. Why not focus the majority of your purchases on a municipality that has a favorable sales tax?
It is not out of the realm of possibility to save hundreds of dollars by shopping in a place with a lower sales tax. In New Jersey, for example, 37 towns qualify for an “Urban Enterprise Zone.” In these zones, businesses can sell goods at half of the 7 percent sales tax rate.
As if saving on sales tax wasn’t incentive enough, there are actually certain times in which additional benefits may be had. I am referring to what is commonly known as a sales tax holiday. Some states offer Energy Star sales tax holidays one weekend out of the year. While it is a limited window, it is certainly advantageous to those who capitalize on it. For a list of states and when these holidays are, visit the Database of State Incentives for Renewable & Efficiency. If you are not able to take advantage of a tax holiday, check your local stores for promotions where they’ll pay the tax.
Consider Doing It Yourself
While hiring a good contractor to complete any rehab work on a property is recommended, some jobs may be better left for yourself. However, if you are awarded the opportunity to do it yourself, and if you are versed well enough in the respective project, you might be able to complete it on your own accord.
Most likely, you will learn something new and save money in the process. Those who are less adept at handy work may want to leave the heavy lifting to contractors that were hired for a specific reason. However, that does not mean you can’t handle the preparation or finishing work.
Of course, there are some drawbacks to doing it yourself. Contractors are in the business for a reason, and they know exactly what they are doing. Some things are just simply left to the experts. “Flooring, countertops, cabinets are all doable, but if you mess up, they are really expensive to fix,” says Fritschen. It is also smart to consider hiring a professional for areas of work concerning safety or feats of engineering. With potentially huge ramifications, these areas should only be tasked to someone with the appropriate expertise.
It all depends on how handy you are, how much time you have and how much you want to buy new tools. Department stores offer free in-store workshops, and some stores offer online guides, videos and photos. Check the library for do-it-yourself books, or watch videos on home renovation projects.
Price Match
In order to compete for your business, a lot of stores (both big and small) will price-match. The concept of price matching is relatively well known, but entirely underutilized. Essentially, it offers consumers the ability to receive the best price on a particular item – removing any doubt that they could have received it cheaper elsewhere.
The concept of a price match is mutually beneficial to every party involved. Any company offering this incentive is doing so as a means to retain business. On the other hand, you are assured the best price on a particular item. Even some stores that don’t advertise price matching will do so – you just have to ask. Let them know how much you appreciate their store, but that a rival store is offering the same item for less. There are even a select few stores that will not only price match, but also knock off another 10 percent if a local store offers an identical, in-stock item at a lower price.
