08 Mar Managing a remote renovation – Nhan Nguyen
Nhan Nguyen answers Sharon’s question about renovating a property interstate.
Kevin: I’m going to answer a question that came in now from Sharon Pattison. [? 00:06] Sharon, thank you very much for your question. Because we’ve chosen your question, you are going to receive a 12-month subscription to Your Investment Property Magazine. We’ll get you some details about that, Sharon.
I’m going to direct the question to Nhan Nguyen. Firstly, hello, Nhan. How are you?
Nhan: G’day, Kevin. How are you, mate?
Kevin: Well, thank you. Nhan is from advancedpropertystrategies.com, and I’ve sent the e-mail through to Nhan so I’ll quickly read it out. “Hi, Kevin. I listen to your weekly podcast which his very informative. Thank you. I live in Sydney and I’m thinking of buying in Queensland in a 5-10-kilometer ring around Brisbane when the banks will lend me more money. Can I discuss in one of your upcoming shows? So I buy an investment property interstate through a property buyer, but in a few years – for example five years – it needs a reno. What’s the best way to go about this, being that I’m interstate and I can’t take a lot of time off work? Regards, Sharon.”
I think I interpreted that one correctly. Nhan, you’ve received this one. Have you had time to think about that?
Nhan: Yes, absolutely. I think some suggestions there is if you’re looking at a property, definitely if you’re looking at potentially renovations down the track, there are two general types of renovations. We talk about cosmetic which is kind of like the superficial one, versus a structural renovation. I think one of her concerns is definitely if it’s a bigger renovation, whether you’re lifting it, sliding it, building in walls – which is structural – I think that could be the one that she should definitely avoid. She should definitely look at a cosmetic renovation, and that would be where we’d be looking at. Something that’s less than $5-10,000 that doesn’t need a lot of supervision. But at the same time, I definitely think she should supervise some of it.
Kevin: She’s talking there about using a property buyer. I guess she’s referring there to a buyer’s agent.
Nhan: Yes. A buyer’s agent can potentially help you there. I think it does give you some leverage there, but I do also believe that if you get something like a buyer’s agent and potentially renovation and add value, [? 02:20] definitely check it yourself. Now, if you’re in Sydney, flights to Brisbane from Sydney are relatively cheap. But yes, I think a cosmetic reno is definitely the way because you’re time [02:32 inaudible] so to speak, that’s why you’re getting the property buyer’s agent in as well as potentially renovating it using other people.
Kevin: Yes. Doing a renovation at arm’s length can be quite difficult unless you’ve to some pretty trusted tradies on the ground.
Nhan: I agree, and I think that’s part of why if you do a cosmetic renovation, maybe an idea could be to come up on a Saturday, make a whole set of appointments beforehand, meet all the tradespeople on site and get quotes from them, but also get references from them. I’ve got clients who are living in ACT at the moment. They’ve got a renovation in Ipswich, and one of the clients [03:12 inaudible] and she basically organized a lot of that remotely, but before she goes ahead with it all, she’s definitely getting them to come meet her face-to-face, talk her through the scope of works.
It’s just being organized. I think it’s being organized and making sure that you inspect people’s work. And depending on how big the renovation is, you definitely need to inspect the people’s work before you pay them. Another opportunity is maybe getting the property buyer’s advocate there to do some supervision for you as well. That could be another way you could leverage that opportunity.
Kevin: Are there any opportunities to get project managers on the ground who you can employ to do this? Just in the event that Sharon can’t fly all that often.
Nhan: Absolutely. I think builders are generally good at organizing teams. Depending on the scope of work, you could get a builder to sign a build contract with you and then he oversees the whole project. And then the agreement would be that they regularly send you photos of the works done. But some people that advocate just pawn [? 04:21] it off to somebody else and hopefully it will work out, should be alright, mate. But I know anything where there are tradespeople involved, there are multiple moving parts, there are going to be definitely balls dropped unless you’re there regularly. Even if it’s one weekend every week for a month, it’ll allow you to keep on top of it. Because when people know they’re being checked or inspected, they will perform better. They’ll actually turn up. And some people just try to yank your chain by basically invoicing when they haven’t done the work. That’ll stop that.
Kevin: It’s interesting to hear you talk, because the lesson I’m taking away from this is that you can delegate, but you should never abdicate that responsibility. Because you only really get one shot at it, don’t you?
Nhan: Exactly. And I think to expect, you have to inspect. And we’re all control freaks at some point in our MO, so I do believe we can go on to a lot of sites, Facebook chats and get resources from people. Also if you’ve got friends in Brisbane for example who are in the building game or the property game, it just takes a few phone calls and you can easily get some referrals there, or some of the meetups. There are groups there, renovating meetups or property meetups, and all it takes is one good person to refer you. And then from that good tradesperson, you can get them to refer you their friends in terms of one painter will know a good electrician, a good plumber. They generally associate in tight-knit circles. If they want to work with each other, they refer each other business.
Kevin: Yes. Great talking to you. Nhan Nguyen is from advancedpropertystrategists.com. A good man to talk to, very knowledgeable. Thank you for your time, mate.
Nhan: Anytime, buddy. Cheers.