Property developing can be a lucrative enterprise with large sums of money to be made. However, there are equally large sums of money to be lost if a project goes wrong. Being a property developer is no different to running any other kind of business. Yet, I see so many people who fail to grasp two basic concepts. That is, firstly you are in business to make money not save money and secondly, it’s vital to understand the difference between cost and value.
By that, I mean it’s a mistake to be fixated on cutting corners and always going for the lowest price. Obviously, there is no point in spending money for the sake of it, but to be successful, you need to be getting the most bang for your buck. That means that when you deploy financial resources for your project, you want that outlay to provide as much value and solve as many problems as possible.
That is why whenever I take on a project for myself or a client, I want the best possible contractors that my budget allows. I am never looking for the cheapest. Over the 40 plus years that I have been involved with the construction industry, there is one fact that has been proved consistently correct, which is that skilled labour is not cheap and cheap labour is not skilled!
In this article, I want to show you why good builders seem hard to find and what you can do to attract them, while protecting yourself from cowboys in the process.
I constantly hear people telling me that good builders are hard to find, either they are booked up way in advance or they don’t respond to enquiries. When this happens, I ask them to look closer to home and ask themselves if they are a good client?
There is a skills shortage nationwide, so contractors can pick and choose who they work for. However, I would say that if you are a good client, you will have no problem finding good contractors. But you have got to make them want to work for you.
There is a lot of advice given about doing due diligence on builders, but you have to understand that the builder is doing the same to you as a potential client. The builder is not just focused on how much money they can make. They are taking a lot of other factors into consideration.
How do you present yourself to a builder? The key is to come across as someone who is going to be easy to work with. That starts with knowing what work you want doing on a property. I’ve seen investors treat builders like interior designers, expecting them to know the specification and design of the work they want completing.
Another thing to be careful of is fishing for quotes. I know that it can seem like a good idea collecting as many of them as possible, but if a trade feels like you aren’t serious about their project or you’re only going to pick them if they underprice themselves, then they’ll likely chose not to work with you.
Also, be careful about choosing to self-manage a project. There is nothing wrong with this, and it can save you some money, but you need to know what you’re doing and, you need to be able to convince your builder that you know what you’re doing too.
If you haven’t sent a builder the full information they need about your project, this could well be the reason why they haven’t replied to you. If they don’t think you have the skill and knowledge to run the project, then they might decide it’s too much of a headache.
But now we have the problems out of the way, here are the solutions.
Firstly, you need to be sure of what you want your project to look like when its finished. That means you need to be able to give a builder the drawings and specification document. Without these, it will make it hard for a builder to put an accurate price and a timeline on your project.
Secondly, you need to have a realistic idea of what your project will cost. A lot of builders will just walk away if you try and haggle with them. Remember, they are in high demand, so they rarely need to negotiate on price.
You can get a high-level preconstruction cost estimate done by a quantity surveyor for a few-hundred pounds. This will allow you to decide if your budget is sufficient or if you need to lower the specifications, so the project falls within your budget.
Understand what kind of contract you need. Money spent getting the right advice can save you tens of thousands later if a project goes wrong. There is an awful lot of bad advice online regarding contracts, so make sure you go to a professional. A contract is there to protect both parties, it is not a stick to beat the builder over the head with. Both parties have responsibilities to each other and risk needs to be shared correctly.
Knowing how to find builders is crucial. There is a reason that the professional companies don’t go looking on online sites or asking for recommendations on Facebook when they need labour. Remember, that once your project starts, you are in business with the builder for the duration of that project, which could be a long time. You really want to know who you are doing business with. There is a massive difference between a general builder and a professional construction company.
As a client, being able to source reputable builders is essential. One of the best and safest ways to find reputable building companies, is to look on the website of The Chartered of Institute of Building. They have a register of chartered building companies and consultants. You can use the search facility to find ones who take on projects in your area. Anyone on that list has gone through a rigorous application and due diligence procedure. They are all signed up to a professional code of ethics and are obligated to deal with clients in an open, honest and transparent manner.
If you can do everything outlined in this article, you will put yourself in a far better position to attract the best builders. Having drawings and a spec, shows the builder that you have already put some serious thought and some money into the project. Having a contract lets him know that you understand that you have responsibilities and they have more certainty of getting his money on time.
An accurate and realistic budget shows that you have done some research and value the skills and experience that they are bringing to the project. The builder doesn’t want to feel like they are in the marketplace on holiday, haggling over the price of a carpet. They go high, you go low until you eventually meet in the middle.
Putting the effort into finding a reputable building company will save you from so much worry regarding your project. The builder will appreciate the fact that you have gone looking for the best builder and not the cheapest and will understand that you know the difference between cost and value.
I hope this article has been useful and I wish everyone luck in their future projects. Just remember though, you can have the best prepared and resourced project in the world, but that doesn’t mean that anything isn’t going to go wrong. However, with the right people, resources and information in place, you will have a far better chance of dealing with things and still getting your project over the line.
Tel: 0044 7471 838083
Email: df@daveforde.com
Website: www.daveforde.com
