Editor’s note: This story was originally published here Live and invest abroad.
When a project takes more work than anticipated, our construction crew in Los Angeles has a say…
“Salio la bruja!” The witch also came along.
I have been building, renovating and remodeling properties overseas for over 30 years. I’ve encountered my share of witches. I take these projects as-is and from scratch. Sometimes I need rest. It’s been a long time, so, this year, Leif and I planned three renovations.
in our apartment medellin Needs to refresh. It’s been a long time since we repainted the roofs and polished the hardwood floors.
Similarly, we agreed, our apartment Panama CityNow 20, could use a facelift. It’s time to update the kitchen and powder room.
Finally, we wanted to add a bathroom to our home in Woodstock, Illinois for a family trip this summer. Our granddaughters will be in residence this July for the nation’s 250th birthday celebration, which will be their first fourth state celebration.
What we thought would be straightforward projects… but, ah, everything turned out to be witches.
I will give you the details. The bottom line is that each project is taking longer, costing more and causing more brain damage than expected. I’m not surprised. In my experience, this is what happens. I’ve lost count of how many renewals I’ve managed, but almost every one has been long distance.
In 2002, Leif and I bought three apartments Buenos AiresAll require complete renovation before being rented out. This task was handled by Sampark, an architect from that city. We did not see the apartments until a year after the relocation was completed because they were all immediately rented out on annual leases.
The architect had sent us photographs on a weekly basis to keep us updated about the progress of the work. Material selection and furniture choices were agreed upon via email. The process was seamless, and we were happy with the results, but I wouldn’t recommend this approach. we were lucky. You can’t expect happy results this way.
Ideally, you should visit at least monthly during any renovations. At critical stages, you should attend weekly or daily. If you are not living where the property is located, add travel costs to your relocation budget.
Here are 11 things I wish someone would have told me before doing my first renovation abroad.
1. Location is still king
As with any real estate purchase, location is the number one priority. This is the only quality of the property you can’t change, and this is especially important with a restoration project, especially if you intend to rent out the place. Tenants will overlook a multitude of sins for the sake of a great place.
For example, walkability along city property should be a priority. You want a location that’s close to restaurants, cafes, grocery shopping, and household supplies. Both potential resale buyers and renters will appreciate the convenience and ability to live in a property without investing in a car.
2. Identify your potential resale buyer or renter
When investing in a property for rental, do your best to imagine who your tenant might be before you start restoration work. If your tenant will likely be a traveling executive, you’ll want to make different choices if you think you’ll be renting to families with children or families on vacation.
The differences impact both the work you do and the location you choose.
3. Check the structure
Verify that the home is structurally sound where it counts. Problems with the foundation or structural members or framing damaged by termites can be very expensive to fix.
The ideal fixer-upper has a solid structure but terrible curb appeal – for example, an overgrown yard, peeling paint and broken windows. These are nickel and dime items that, when taken into account, change the final price dramatically.
4. Set your budget keeping the market in mind
Before you make a purchase, make sure the value of the neighborhood you’re considering purchasing is consistent with what you envision for the finished condition of your restoration project.
Let’s say you want to buy a home for $50,000, invest an additional $50,000, then eventually resell the property for $150,000 (a reasonable expectation for profit margin). Before making a purchase, make sure other homes in the neighborhood are selling in that price range.
When making an offer on a fixer-upper that you want to resell, start by estimating the price you’ll ultimately ask for the finished product at resale. Then estimate restoration costs (with the help of local contractors if necessary). Add the total restoration costs to the purchase price to confirm that you are getting less than the final asking price you envisioned.
A good rule of thumb is that your total investment (purchase price plus renovation costs) should be at least 20% less than your estimated resale value. This means that if you decide you don’t want to do this you can resell immediately upon completion of the renovation for a profit without having to wait for the market to appreciate.
5. Spend on things that yield returns
It’s easy to overspend on non-value-added items. A modern kitchen, granite or ceramic counters, painting and updated bathrooms are worth the money. These are the things that make a difference in photos, that are important in attracting renters, and that usually add more value at resale than what you spent on them.
On the other hand, custom bookcases, high-end cabinetry, specialty hardware and even a swimming pool — though nice upgrades — are expenditures that may not make sense, depending on who you plan to target for rental.
A beautiful gourmet kitchen may be worthwhile in a rental property in an upscale area of Panama City, Panama, but not in a town like Loja, Ecuador, where everyone has a maid to cook for them.
Essentially, you’ll be investing in some small luxuries along these lines, things that matter to you and that will make the space comfortable for you to use. But keep an eye on these indulgences to make sure they don’t erode your ultimate returns too dramatically.
6. As far as possible, go local for ingredients and methods
In the United States and Canada, wood is cheap and abundant. This is also true in some other countries (Belize for example), but not all. In most of Latin America, wood is expensive and is rarely used as a bulk construction material.
To keep costs down (and ensure a solid home), plan to use masonry. Save the wood for trimming. For example, in Ecuador local artisans make kitchen cabinets from brick and ceramic tile and then make wooden doors.
Try not to be too prescriptive until you know how things are done locally. Every renovation project is a chance to learn new ways of building.
Fieldstone driveways, adobe and rammed-earth construction, and homemade clay tile roofs are not typical in the United States, but they are the norm in many other countries, meaning they may be the most economical options as well as the techniques with which local artisans are most familiar.
7. Have all the money you need before you start
Make sure you have the time and money to complete the project, assuming it will take longer and cost more than you anticipated. This happens all the time.
8. Check the contractor
Take the time to check out his track record and reputation before committing. Your contract is only as good as the person you contract with.
Also, insist that your contractor present you with a detailed itemized bid based on architectural plans that includes everything from window and door frames to iron railings and zinc-plated screws.
9. Invest in plans
Don’t skimp on Vaastu related plans. You get what you pay for. We worked with one of the most expensive panama To draft the design of the house we built on the Veraguas coast of this country…
We could have saved at least a few thousand dollars by using someone else, but we’ve seen how much things can go wrong when plans aren’t thoroughly thought out and diligently detailed.
When working in a foreign country with workers of varying levels of experience and expertise, the risk is to leave anything open to interpretation. Crews on the ground have no choice but to improvise. We promise you that their amazing work will blow away your expectations.
10. Consider geography
If you’re building on the coast, remember how much damage the sun and sea breeze cause. For our house on the beach in Panama, Leif and I used local hardwood for the finish details and treated the wood with wax, knowing we would have to reapply the wax finish often. This will be an ongoing part of the maintenance of the property.
We invested in oversized rain gutters, because during the rainy season in this part of the country, it rains torrentially, and we built extra insulation under our red clay-tile roof to help control air conditioning costs.
11. Always hold partial payments
Don’t pay in full for anything. you know this. This is common knowledge.
However, when we heard the stories of the hard fate of the workers we got into trouble. Make some payments for completing the task in question, make some more payments at agreed progress benchmarks, and pay the final amount after all punch list items have been addressed. Don’t be tempted to compromise on that plan.
