Seeking advice about a new career in renovating apartments
November 4, 2012 7:42 AM Subscribe
Do you have any advice about renovating apartments as a career?
I've kind of hit a dead end with my current white collar career. It's been good, and I still enjoy it. However, I've amassed a decent amount of capital, and have been toying with the idea of earning money by buying and renovating apartments instead of being in front of a screen all day.
I am fairly handy, though not very practiced. I imagine some carpentry/engineering skills would be useful, as well as a knowledge of real estate in order to pick good properties to buy and fix up. What are the questions I should consider, books I should read, skills I should acquire?
I suppose I will have a lot of competition, considering the recession put a lot of construction workers out of work. I'd like to think I have patience and capital on my side though.
I've kind of hit a dead end with my current white collar career. It's been good, and I still enjoy it. However, I've amassed a decent amount of capital, and have been toying with the idea of earning money by buying and renovating apartments instead of being in front of a screen all day.
I am fairly handy, though not very practiced. I imagine some carpentry/engineering skills would be useful, as well as a knowledge of real estate in order to pick good properties to buy and fix up. What are the questions I should consider, books I should read, skills I should acquire?
I suppose I will have a lot of competition, considering the recession put a lot of construction workers out of work. I'd like to think I have patience and capital on my side though.
Xingcat is right. The only way you could do something like this is by being a serial home owner: you buy a place, live in it for at least 3 to 5 years while you fix it up, and then sell and buy another fixer-upper. It can be a good way to amass some profit or serious equity long-term and there's no capital gains tax. I'd recommend you buy houses as opposed to apartments (apartments just don't tend to be good long-term investments, unless you live in NYC or something), and that you buy with the idea that any given purchase may turn out to be a long-term home, because you may get too busy or become physically unable to keep doing renos, or the market might tank and make it impossible for you to sell the place at an acceptable price, or you may love the place too much to let it go.
And in this case of course, it's not a career move but more of a hobby and sideline, and you'll have to be willing to live in a place under construction and to keep moving around, which is not everyone's cup of tea.
posted by orange swan at 10:23 AM on November 4, 2012
And in this case of course, it's not a career move but more of a hobby and sideline, and you'll have to be willing to live in a place under construction and to keep moving around, which is not everyone's cup of tea.
posted by orange swan at 10:23 AM on November 4, 2012
Response by poster: Thanks guys. I appreciate the caution. I do live in NYC and am willing to live in a place under construction and keep moving around, but that may not be enough.
posted by Borborygmus at 12:33 PM on November 4, 2012
posted by Borborygmus at 12:33 PM on November 4, 2012
Not sure why the time for making money doing this would have passed. Wouldn’t the reason that would be true is that prices are high? The real estate market is depressed now and money has never been cheaper, so by those criteria alone now would be a good time. Of course those are not the only considerations, but as to whether or not it’s a good idea depends.
I agree that your current construction skills and lack of contacts would be problematic, but it doesn’t mean you’d automatically be headed for disaster, that’s pretty negative thinking. There are people exactly in your position who could make money doing this. One of the determining factors would be how fast you can pick up the building skills you’d need, how fast you are on the uptake. For example, you can save lots of money if you can trim out an apartment yourself, but if after doing it a few times it still takes you forever to do, it’s a problem. Same with the other jobs you’d be doing, if it took you 2 days to install a sink, problem.
You’d also need business skills you don’t currently have, but you might find that you’re a natural at it and not have to learn too many lessons at your own expense. With all these things it’s sort of a Catch-22, you can’t gain the skills without actually doing it, and the determinant factor is how fast you learn.
I think there are also many different ways you could approach this, you don’t necessarily have to be all in, quit your job and do this exclusively. You can buy something where the majority of the work that needed doing is cosmetic and start building you skill set. If you had a small building with let’s say 4 units, you could work on one while you kept the other 3 rented and bringing in income.
I worked in Boston doing exactly this for a number of years. One thing to consider is that you can’t necessarily do all the work yourself. When I was in Boston, the city required all electrical and plumbing be done by licensed professionals in rental properties. But you usually don’t want to do everything yourself anyway. You might do the things you’re good and fast at, or the things you like to do yourself, and farm out other things. Some things like insulation it doesn’t pay to do yourself as you often can’t do it cheaper.
In the end, I think a big factor would be how greatly you desire a career change? If you’re sick of sitting behind a desk this might be just the thing. But you’d need to go into this with your eyes open realizing that doing this would not be without challenges and headaches. But I guess that can be said of any job.
Michael Litchfield has and excellent book Renovation on well..renovation. He’s one of the founders of Fine Homebuilding Magazine, something you might like to subscribe to if you did this. Most articles are submitted by people in the trade. Also, you might find John Carroll's Working Alone helpful. He gives some great advice on doing things when there's nobody around to hold up the other end. Memail me if you’d like to kick this around some more.
posted by PaulBGoode at 8:07 PM on November 4, 2012 [1 favorite]
I agree that your current construction skills and lack of contacts would be problematic, but it doesn’t mean you’d automatically be headed for disaster, that’s pretty negative thinking. There are people exactly in your position who could make money doing this. One of the determining factors would be how fast you can pick up the building skills you’d need, how fast you are on the uptake. For example, you can save lots of money if you can trim out an apartment yourself, but if after doing it a few times it still takes you forever to do, it’s a problem. Same with the other jobs you’d be doing, if it took you 2 days to install a sink, problem.
You’d also need business skills you don’t currently have, but you might find that you’re a natural at it and not have to learn too many lessons at your own expense. With all these things it’s sort of a Catch-22, you can’t gain the skills without actually doing it, and the determinant factor is how fast you learn.
I think there are also many different ways you could approach this, you don’t necessarily have to be all in, quit your job and do this exclusively. You can buy something where the majority of the work that needed doing is cosmetic and start building you skill set. If you had a small building with let’s say 4 units, you could work on one while you kept the other 3 rented and bringing in income.
I worked in Boston doing exactly this for a number of years. One thing to consider is that you can’t necessarily do all the work yourself. When I was in Boston, the city required all electrical and plumbing be done by licensed professionals in rental properties. But you usually don’t want to do everything yourself anyway. You might do the things you’re good and fast at, or the things you like to do yourself, and farm out other things. Some things like insulation it doesn’t pay to do yourself as you often can’t do it cheaper.
In the end, I think a big factor would be how greatly you desire a career change? If you’re sick of sitting behind a desk this might be just the thing. But you’d need to go into this with your eyes open realizing that doing this would not be without challenges and headaches. But I guess that can be said of any job.
Michael Litchfield has and excellent book Renovation on well..renovation. He’s one of the founders of Fine Homebuilding Magazine, something you might like to subscribe to if you did this. Most articles are submitted by people in the trade. Also, you might find John Carroll's Working Alone helpful. He gives some great advice on doing things when there's nobody around to hold up the other end. Memail me if you’d like to kick this around some more.
posted by PaulBGoode at 8:07 PM on November 4, 2012 [1 favorite]
recently, I've been helping some people fix up their apartments, (not for resale), and I am really surprised at how much the value goes up, relative to the work put in. I'd agree it's probably better to do this in a down market. The cheap apartments are really cheap, and the extra labour you will need is cheap as well, whereas there is always a market for a good apartment in a city like NY.
One warning: one of the apartments I turned around had severe structural damages, which I told the owner in advance. Because of the location she insisted on going ahead anyway. But it became very expensive and it took ages. If you cannot evaluate the health of the building on your own, get help for that.
Also, living in the apartments seems like an unnecessary burden, and will delay the process. If there are no structural problems, and you treat this as your job, it should be possible to fix up a medium sized apartment in 8-10 weeks. If you pay someone to help you one week or two, you will still be able to get a good profit.
posted by mumimor at 1:31 AM on November 5, 2012
One warning: one of the apartments I turned around had severe structural damages, which I told the owner in advance. Because of the location she insisted on going ahead anyway. But it became very expensive and it took ages. If you cannot evaluate the health of the building on your own, get help for that.
Also, living in the apartments seems like an unnecessary burden, and will delay the process. If there are no structural problems, and you treat this as your job, it should be possible to fix up a medium sized apartment in 8-10 weeks. If you pay someone to help you one week or two, you will still be able to get a good profit.
posted by mumimor at 1:31 AM on November 5, 2012
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posted by xingcat at 8:43 AM on November 4, 2012 [1 favorite]