maxjmartin.com

The Complete Guide to Property Investment

Book notes for “The Complete Guide to Property Investment”, How to survive & thrive in the new world of buy-to-let by Rob Dix

Last annotated on December 16, 2016

If you’re using a tradesperson, it’s their responsibility to get approval from the building regulations department of the local authority, and they’ll also be the ones to face a fine if they don’t – although as the owner of the building you could be issued with an order to bring shoddy work up to standard at your own expense. If the tradesperson is a “competent person” (meaning that they’re a member of a trade body scheme, like FENSA for windows or ECA for electrics), they can self-certify that their work meets buildings standards without having to invite in the local authority to inspect the job afterwards. They will issue you with a certificate stating that the work is compliant, which becomes very important when you come to sell or refinance the property: loc 2068

For anything beyond the smallest job, the normal commonsense rules apply: get three quotes and trust your gut. To make sure you’re comparing like with like, ask everyone to be clear about the exact scope of work: you might find for example that one quote is more expensive because the builder anticipates needing to replaster, whereas someone else has just assumed that the old plaster will be fine. I always insist on a fixed price quote (rather than one based on how long the job takes) so I know in advance how much it will cost, and the builder has the incentive to get the job done and get paid rather than drag it out. I also ask for that quote to be broken down into labour and materials, which makes it easier to dig into the quote in more detail. Rather than just having someone suck air through his teeth, scratch his head and say “You’re looking at about two grand there,” you can ask how many days that includes for each trade at what day rate – making any padding in the quote immediately obvious. When it comes to materials, I’m generally happy for the builder to supply the basics because they’ll have access to better prices than I will – and although they’ll often mark up the prices a bit to account for their time in doing the running around, it saves me doing it myself. For anything where personal taste is more of a factor, like a bathroom suite, you might prefer to supply your own. loc 2100

Big jobs (which I’d personally classify as being anything over a couple of thousand pounds) deserve a contract with clear specifications, dates, figures and provisions for when things go wrong. The Federation of Master Builders has put together a template that you can just print off and fill in the blanks (home-extension.co.uk/fmbcontract.pdf). loc 2111

The jobs I’ve seen go the most wrong are the ones where the investor put someone in charge and expected to come back a couple of months later to a totally finished project. Instead, they tended to find that the builders had got as far as making everything a total mess, but stopped short of putting it back together again. loc 2156

In other words, if a job absolutely must be done in two months’ time, agree with everyone involved that it needs to be done in a month. Even if everyone has the best of intentions and works as hard as possible, unexpected delays will always creep in. Whether it’s weather, delays with materials or nasty complications arising, I’m yet to see a project of any size that runs exactly as you’d expect it to in an ideal world. loc 2162

There’s also the idea of “hotspots”: you could buy in an area that’s primed for explosive growth then just wait and hope, but that’s a lot harder than you might think. Unless you’re unusually skilled or have incredible local knowledge, I consider chasing hotspots to be a distraction. Whenever I’ve bought in a hotspot, it’s been a total accident. loc 2877 > like in MB there is the concept of exposing yourself to opportunities with high potential income, giving you overall positive EV