How we price an HMO Refurbishment

Karen ClarkeHMO Property InvestmentLeave a Comment

cost Plus HMO refurbishment

Pricing an HMO refurbishment is a skill we have developed and refined over the years.  We’ve evolved from a ‘best guess’ approach (which didn’t serve us well) to a finely tuned method of analysis with custom purpose built tools to make sure we get it right every time.

This is important for you, the investor, since we now operate a cost-plus model for our HMO refurbishment activity, as well as for conversions of commercial properties into residential units.

What is A Cost-Plus Model for HMO Refurbishment?

It’s a fully transparent model whereby you see all of the invoices from staff, sub-contractors and suppliers, and there’s an agreed project management fee.  This is our profit margin on the job.

There are several benefits to you:

  1. Full transparency means you see exactly what you are paying for.  Nothing is hidden, and there’s no risk of you not getting what you are expecting to receive.
  2. If the costs come in lower then you benefit.
  3. It’s easier for you to understand the impact to your costs if you adjust the specification of elements of the job.  For example, if you wanted to upgrade the flooring in the bedroom you know exactly the costs without worrying that your builder is over charging you.
  4. In an environment rife with ‘rogue traders’ and cowboys our approach will help you to build trust that you are working with a good company, particularly when you combine it with our membership of The Property Ombudsman Service.

What About Cost Over-runs?

In any building project, including an HMO refurbishment, the risks of cost over-runs need to be managed.  We have developed a process to ensure this doesn’t happen for our clients.

Whether a client comes to us with their own property, or we have sourced a property for a client, the process is essentially the same:

  1. We visit the property and take a load of data.  We need to understand all the elements of a project as best we can, including number of fire doors, normal doors, dimensions of the room, evidence of damp – the list goes on and on!
  2. From this we can put together a first estimate for the work.  This may change once a survey has been carried out, but will give us a good idea of the likely costs.
  3. Once we have the survey back we can really pin down the costs.  Our directly employed trades are given a specific number of days for the various tasks, and any sub contractors are kept to a fixed price.  This results in a fixed price for you, and no risk of cost over-runs.

What About On-going Management?

Our business is process driven and we make access to this available to our clients.  There are two software systems that we use that we encourage our clients to download onto their smart phones:

  1. Slack:  This is a messaging system for teams which we use throughout the business.
  2. BuildTools:  This is construction software which we open up to our clients so that you can keep an eye on progress wherever you are.

Next Steps

To find out more please get in touch.  We’re happy to take as long as you like to answer all the questions you have.

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