Category: property investing

All things, real estate and construction.

Ways to reduce construction costs

When property is being developed you find the builder/customer automatically goes straight to the merchants to pick up materials/products.

Now this tip involves some pre-planning but if you have a development coming up or a new property to spruce up before you move in and you know what is required then start looking for the materials using second hand sites, such as gumtree or free ads or Facebook. People give away left over building products at a third of the price and sometimes are happy to deliver.

The types of materials I’m talking about are things like insulation (and it doesn’t matter if they are different shapes and sizes it can all still be used), internal doors, external doors, used upvc windows, curtains, furniture, fire surrounds, floor boards, paint, tiles, roof slates, bricks, (I could do this all day).

Hopefully you’re getting the idea, so with a bit of planning you could save thousands of pounds by using second hand products. If your worried about using second hand products a lot of the time things like building materials are brand new it’s only the fact that the seller has over ordered on their particular project. On top of that you will be helping the environment by reducing the amount of waste chucked away in landfill.

Be sure to let the builder know what you are planning as we always come across products on jobs that are just being thrown away, i make an effort now to post things on gumtree for people to collect for free when I’m carrying out particular jobs as it helps me out by reducing my waste bill and I know good materials are not being wasted.

Also if your passing a place where things are in the skip speak to the builder or owner of the property where the work is being carried out and see if its OK for you to have it..Usually its no problem at all.

My father in law is the best person i know at doing this, hes always coming back with different things. I got roped into picking up 2 x sheets of timber that the local gym was disposing off after their refurbishment and he made the grand kids a tree house out of it, he also came across some amazing sliding wardrobe doors that where leaning up against a skip ready to be thrown out.

So you can find lots of gems if you just make yourself more aware.

 

How to save VAT (Value added Tax) for developers

Any tradesmen (builder, plumber, electrician, etc.) whose gross annual revenue exceeds £83,000 has to notify HMRC and become VAT (Value Added Tax) registered.

This means that VAT will be added to all labour that they provide, which at current rates means an extra 20%. Materials’ costs will nearly always include VAT, whether the tradesman was VAT registered or not as most suppliers will already be charging it to the tradesmen who are sourcing materials for you. Building companies that charge VAT are usually the companies that carry out the works such as extensions and refurbishment projects. So before accepting a builder’s quote always check if VAT is to be added as it should be clearly stated on the quote. However, sometimes this can be omitted, so it’s always worth double checking.

There are obviously savings to be had by using builders that are not VAT registered 20% straight away on standard building works. I do understand the instinct to save costs by going with the builder that is not VAT registered as I have been on both sides of the coin. As a sole trader, I was not registered, but as I began taking on bigger jobs and sub-contracting labour, I changed my trading status to a limited company and then eventually had to become VAT registered. You have to expect that in bigger refurbs/new builds, the builder will be VAT registered. As the threshold is only a turnover of £83000, with extensions, for example, costing around £30000- £40000, you can see why this bracket will soon be met when carrying out just several of these over a year.

I still continue to perform small jobs, and a lot of the time if the customer has used me before, they have continued using me regardless of VAT being added. I think a lot of people will pay builders who are in the VAT threshold if they are good reliable guys, and remember if you’re using a good builder that isn’t VAT registered, chances are they will soon become VAT registered as their popularity and reputation increases.

If you are thinking of developing or converting property, be sure to read VAT Notice 708 on the gov.uk website. This describes the different VAT rates that apply to different building work as it’s not all necessarily charged at 20%. In brief, if you are looking at converting a property or working on a listed building, you could pay as little as 5% VAT on materials and labour instead of the standard 20%.

If you are looking at building a new build, you could pay zero VAT. This could save you thousands on your next project, so be sure to educate yourselves.

9 top Tips for saving money on your next property project

!!!!!Warning most of these tips do involve you getting your hands dirty!!!!

If you are pretty practical or are just happy to roll your sleeves up there are tons of ways to save money while renovating your property.

Below I will offer some top tips to save MONEY on your next project.

Tip 1 – Saving money on electrical work

Electrical work is skilled work which only qualified people can do. But before the cable is taken out of the van the electrician first needs to lift floor boards, drill holes ready for the cables, chase walls and even fix back boxes ready for sockets. This is something that you can do or a labourer at half the cost of getting the electrician to do it.

Go through with the electrician before work starts and figure out best routes to run cables and as long as they say it’s safe there is nothing stopping you doing this part of the job.

If anything they would thank you for it and at the same time you are saving a shed load of money…

Tip 2 – Saving money on loading up the site

If it’s a landscaping job or building project, materials need heaving around. For example, If you live in a particularly hard to reach place. Or your having works undertaken in the rear garden but the only access is through the house, or access is just a really long awkward trek, then a great way of saving money is to what we call “loading the job up” which essentially is getting all the materials in the area ready for the builder.

This will save a mega amount  in labour costs, you could also have the materials arranged to be dropped well before the builder is due, giving you lots of time to load the job up so you’re not rushing it.

“I would love it if one day one of my customers they would load the site up ready for me”.

Again depending on the size of the works it could save a lot of money for you.

Tip 3 – Site preparation

Prepare the area ready for the tradesperson. Sounds so simple. but literally I can spend an hour moving peoples stuff before I can do the job. So have all furniture out of the way, and even lay dustsheets down if you have them. This helps the builder out and keeps morale high, speeding the job up and saving time and money. A friend of mine did such a good job of this once that the place look liked a crime scene there was plastic sheeting everywhere. Although we laughed it saved so much time and also the additional time it would take at the end of the job clearing up. Which to be fair builders are not great at….

 

Tip 4 – Bathroom cost saving

If you’re having a bathroom refit and have lots of tiles to come off the wall, what about get them all of before the bathroom fitter starts work and dispose of them??  This saves the labour costs of the bathroom fitter, but be careful and be sure to wear all the correct Personal protective equipment (PPE).

Tip 5 – Carpet cost saving

Another good tip is if you are having carpets laid, clear out all the rooms ready and even have a go at taking up all the carpet and underlay. This again saves labour costs and gets the job started that much earlier in the day, meaning the fitter can potentially get more done in the day for you.

Tip 6 – Painting on new plaster

A good way to save money painting on new plaster work is to do what we call the whitewash yourself.

This is just a matter of painting the entire newly plastered wall with a watered down emulsion usually a white matt emulsion hence the name to give the plaster a first coat. Once dry this coat highlights any imperfections to the decorator and any coats on top of this will be more uniform in finish.

The beauty about this coat is that you don’t have to worry about lots of cutting in the important thing is covering all the new plaster. You will easily save money doing this yourself.

Tip 7 – I am obsessed with used selling sites like gumtree and free ads. On the build up to a project I scour these sites looking for anything that could be of possible use for my project. One of the best savings I have had recently is where I purchased 10 x packs of rock wall insulation for £15 a pack usually £38 per pack. You can find anything from internal doors, to patio slabs.

Tip 8 – Save on waste disposal

In line with tip 7, these selling sites are not only good for finding great deals they are also perfect for getting rid of stuff.

A good example is, I was doing a bathroom refit and the old suite coming out was not in bad condition. So rather than me pay to dispose, I offered it online for free to collector. This was gone the same afternoon they took it all. Saving disposal costs, saving more waste going to landfill and helping someone out all in one go.

You don’t need to necessarily give things away, ask for a few quid and make a bit of money to go towards the project. This not only saves money in disposal but also you are getting some tea and biscuit money.

Tip 9- cancel gym membership

The beauty about a lot of these money saving tips is you will be saving money further by putting  your gym membership on hold because while you are carrying out these works you will definitely not require a gym session.

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Please remember with all these money saving tips to check with a professional before you carry out any works.

Also get a price for two options for the job, one for the trade person to carry out the labour intensive work and the other for them not to undertake that part of the job. This will then be clear from the outset the savings that you can make.

“TOP TIPS” on choosing a builder

TOP TIPS on choosing a builder

To me, it’s always good if you phone a builder and they tell you that their lead time is quite a few weeks ahead, so you will have to wait if you want them to do the job. This shows that plenty of people are using them.
If you phone a builder, and they can start the following day, this raises questions for me straight away. Obviously, sometimes they have works cancelled at the last minute so might be able to do the odd little job, but usually good builders have quite a few different jobs booked for, say, that month, so if one cancels, then there will be the next on the list to do.
This process is different for different trades. An electrician or plumber may only do what I call ‘jobbing’ jobs so they may do a few jobs in a day; if you need another socket added, which is only going to take a couple of hours, this could maybe be squeezed in the following day. This is the same for builders as well – when I started out, I would do the smaller ‘jobbing’ jobs, which meant I might have four or five jobs that week, so obviously if one cancels, there could well be some time free to get a little job in for you.
Explicitly, if you wanted quite a large renovation or an extension and the builder could start the next day, this would lead me to question them further before giving the go ahead. I know that you have just bought a new house and are eager to get the work done, but believe me, this could cost you a lot more time and money in the long run if you choose poorly.
I would always suggest a minimum of three quotes, as this will give you a good range.

I would strongly advise against going for the cheapest quote because usually, it’s too good to be true unless you have really looked into that particular builder. I have had to rectify so many jobs over the years because the customer got the cheapest guy who made a right mess, but not only that – when unforeseen works arise, which usually happens on most works, they will use this to make up the difference in price.
I have quoted for thousands of jobs in my time and always go above and beyond to give the customer the most accurate price. The perfect example is when I priced a repoint job. It was through a friend of mine, and I priced it up based on certain problems that I could see occurring. I put the price in but didn’t hear back. Somewhere down the line, my friend who first put me onto the job gave me some feedback, saying that initially, the customer thought it was expensive, so he went with someone who offered to do the job on a day rate. But the chap used was not particularly competent at the task, and by the time the job had finished, it ended up costing the customer far more than what I had offered.
Always be very wary of paying for work on a day rate. As the name suggests, this is when a tradesman will want a certain amount a day for a set number of hours, much like an hourly rate. This to me is only a good idea if you know the guys doing the work. My observation is that when trades are on a day rate, they drag the job out, as there is no incentive for them to finish more quickly. It seems to be the cheaper option to start with when you think the work should only take a couple of days, but when this ends up going on for a couple of weeks, the price totals up significantly. I very rarely do day rates on my works; all of mine are quoted. I prefer this because the customer and I are clear on what the end product will cost.

When picking a tradesman or builder, ask friends and family for recommendations – chances are they have used or know someone that they would be happy to recommend.
If you get a cheap quote in, ask the builder to break the quote down to make sure everything has been added, then make an educated decision on whether you think this particular builder can deliver at that price. I have seen so many customers suckered in to accepting the cheapest quote even though they have had two other quotes that are similar to each other, and yet they go for the one that is far below the other two. It always ends in the same poor workmanship or the builder stringing the customer on to additional works.

As the old saying goes, ‘Pay peanuts, and you get monkeys.’

Paying builders, builders deposits & preparing for the builder

A Builders advice

I keep reading articles about working with builders and it’s frustrating for me as a builder because it’s never written by a builder.

So if you would like to hear advice straight from the horse’s mouth an experienced builder then please continue reading…

Proper planning

We builders are very practical thinkers we like clear and precise information and no matter how much you ask our opinion on colours and what goes with what we don’t have a clue but we can create it for you.

So have a clear vision don’t waste time talking to the builder about lighting effects and what colour goes with what, this is a waste of every ones time and money. The builder is there to put your plans from paper into reality not design.

Preparing

I have been on jobs before where customers are completely oblivious to a builder working in their house, personal effects left strewn around, clothing left out, dishes in the sink, then complain when a bit of dust from taking down the adjoining wall has covered all their stuff..

On the flip side to that I have had many jobs where the customer has done a scene from a horror movie on the a property I have been working with plastic and duct tape everywhere to stop any sign of dust spreading.

The latter although sometimes worrying for me when I turn up is a massive help. Of course I put dust sheets out but to the extent of covering furniture/floor and just by leaving the area as clear as possible boosts morale leading to a better working relationship and it can aid in getting the job done quicker and more efficiently.

Deposits

I keep reading at the moment (Builders shouldn’t ask for a deposit, they have credit accounts with the suppliers)

Great bit of advice!

What happens to the builder if the customer doesn’t pay?? Who clears the credit accounts? Who pays the employees wages??

I have a strict rule of asking for a deposit up front.

A minimum of 20% is required before I commence works maybe even 50% is required if special equipment/materials are required.

Think about it from the our point of view, how can I trust you will even pay me at the end of the job? I don’t know if your able to afford the works you have asked to have done, we are not allowed to ask for your bank statement to check you have the funds available.

But you can easily check up on me. You can see what reviews I have had, look at my website, asked me for references, even go and see works I have carried out.

A deposit is also a commitment that you are serious about having the works undertaken.

Before I start let’s say an extension I have to spend a couple days running around, ordering materials, arranging and planning labour. If the customer a couple days before suddenly says “I don’t want it doing anymore”

I’m suddenly left with a void in the diary, lost time spent arranging/planning the job. The guys I’ve arranged to get in and do works are also in the same position and I have had to cancel the materials I have ordered from the merchants and if anything was a special product ordered in just for this specific job I would be charged a handling fee from the merchants as well.

I understand the worry given money upfront and we have all seen the programmes where the builder runs of with loads of cash the customer has handed over which is why choosing a builder is so important and proper procedures be followed which I will cover next month..

Hopefully this gives you a small insight into why a deposit is asked for.

 

Toby Sloley

Amazon No1 best seller of “Through a builders eye” Knowing what to look for when investing in property.