I met with my landscaper last week to address the garden that has turned into the opposite of Eden over the past couple weeks. I cannot WAIT to get this project started. Fortunately, the construction industry picked up in a big way this year which means the market is recovering. Unfortunately, the construction industry picked up in a big way this year which means my GCs are harder to get on my calendar. Personal egos have no place in this line of work. So, what does this mean? Holding costs and time – both equal money out of our pocket. Now, when I’m doing projected budgets, I always double my anticipated timeline for exactly this reason. You can predict the market, you cannot control it. I have absolutely no control over the fact that I cannot get a GC in here before September…I digress. The point is: if you budget conservatively, then any additional money that you can save on the house is money directly in your pocket. The catch is that none of the additional money saving tactics are fun. They are worthwhile though and can save you a bigger chunk of change than you may think.
1. Appeal your Tax Bill. This can seem like a daunting task and sometimes it can turn into a nightmare. Get over it. This is the very first thing I do on a rehab project. I check the Assessor’s website, it is almost always higher than what I paid for the house. I did an appraisal on the house so I already have the back-up in a much more detailed form than the Assessor needs. I fill out the form, write a cover letter, and attach the appraisal report. The Kenwood house was assessed at $590k, we bought it for $430k, that’s $160k we’re being over-taxed at 10% plus equalization. The math on that totals a couple thousand dollars in savings.
2. Check your Utility Bills. Really, CHECK your utility bill. Last month, my electric bill for the Kenwood house was $15.49. This month it was $65.55. So, I call the electric company and (of course) they chose to estimate the monthly meter reading instead of actually reading it (probably because the meter reading is so much less than last year and they make less money using it). So, I have to go to the house, take the meter reading myself, call the electric company, give them the information, then wait for my revised bill. $50.00 may not seem like a lot – multiply that by your total schedule and it starts to add up to a nice pair of boots.
3. Do your Yard Work. We all need exercise, right? Landscaping can be extremely expensive – I actually walked into a different room and turned on a bright light midday last week to make sure I was reading a landscaper’s bid proposal correctly (I was). Mow your own lawn, shovel your walkways, trim back your hedges. The exterior of the property has to be competitive, it does NOT add value to the bottom line. It’s the black hole of rehab. A little effort can save you a lot of dollars. Having said this, I will confess that if there is a really long driveway, I will hire a plow to clean it up. Chicago winters are brutal.
4. Sell your Stuff. Oh the emails! The questions on dimensions! The spam! Is there an existing kitchen or bathroom? Those appliances and cabinets are worth money! The Kenwood house not only had appliances and cabinets, but also furniture and…stuff. On to Craigslist it goes! I hate the runaround, I love the hundreds I get back.
None of this is fun, shopping with your savings later makes up for it. Showing your investor that you’re prudent is priceless.