Olimosize Project Management

10 Lessons – Part 10 – Maintenance

10 Lessons - Part 10 - Maintenance

Hi, and welcome to the final installment in our 10 part article series on the 10 things I have learnt about property development, while navigating construction and property investing in South Africa.

In this article I want to talk about looking after your investment once it is built. It's an unfortunate thing that maintenance is usually the last thing on a landlord's mind, but the significance of not taking care of your asset and the costs that can come from not doing regular maintenance, make it a point worth noting and acting on.

A property that has been invested in, should be maintained in order to uphold its value. There is nothing worse than driving past a property where the fence is unpainted, or half of the sign has fallen down, looking as if there is no care at all what the building looks like. Small things make a big impact, and when it comes time to rent or sell the property, it is those things that will make or break the asking price. Additionally, people don't want to live or work in a dilapidated building, so maintaining your property increases your likelihood of securing and keeping good quality tenants who will look after your property in the same way that you do.

Maintenance is a bugbear to many landlords .However, it is prudent to remember that just as doing the regular services, and replacing worn parts is required on a car per the maintenance manual, so it is with a property. Globes have a certain lifespan, gutters get full of debris, fascia boards become loose, the walls need a fresh coat of paint. These are the items that help to build the equity on the property, and by taking proper care of the building and its fixtures over time, that you spend less money in the long run when it comes to not having to do any larger repairs.

It will help to keep track of the maintenance needs for all of the properties with the help of a maintenance plan. This can be as simple as creating a list of items that need to be checked around each individual property, and an indication of how often these things should be done in a year. Then plotting them out in the calendar. For example, things like cleaning the gutters would be done once a year, or more often if there are many trees close to the building and outside lights should be visually checked every month. Create a system that takes care of itself, because then things are done in time and not because of necessity, which costs less money.

Just like you would hire a property management company to oversee the proper letting of your property, it is a good idea to have a team of handymen that you can call on should any minor repair works be required, and to assist with maintaining your property to the desired standard. This team would include a plumber, electrician and general handyman. Things will break at the worst and most inconvenient time, so having a team that you can call on for fast assistance is a real benefit.

There you have it, the final installment of the 10 lessons I have learnt about developing property through being a project manager.

I hope that you have gained some insight from these articles that will help you to make more informed decisions on your next building project.

Be sure and keep an eye out for our upcoming articles with new and interesting topics on developing your property. As always leave a comment on our social media pages with any questions or topics you would most like to hear about next.

You can also sign up to our mailing list and receive our articles direct in your inbox so you never have to miss an issue.

10 Lessons – Part 9 – The builder

10 Lessons - Part 9 - The Builder

Hi, and welcome back to part 9 in our 10 part article series on the 10 things I have learnt about property development, while navigating construction and property investing in South Africa.

In this article I have some words of advice on the builder / contractor that you select to undertake your building works for you. Contractors generally have a certain level of building experience and checking their registered associations, CIDB grading and references, will give you an indication of this level of experience. Most importantly make sure to deal with a contractor who has the experience to build the type of structure that you intend to build.

It's been said over and over, don't use a builder who is not NHBRC registered. This is important because then there is a form of recourse should something go wrong. Unfortunately in the world there are a few unscrupulous people around who are willing to take advantage of others with lies and deceit. Don't just trust a builder that says trust me, rather know the truth for yourself.

Let me give you some examples.

Check and agree on your builders quote, what is included and what is not, and when he starts working check the products being used against the quote, or get a professional to check it for you. Get the builder to provide the full detail for the products being used. For example, make sure you know what type of paint he is using, and how much paint it should take to complete the work. You have a right to understand the quality of the products being used. Not to mention, he may be charging you for the most expensive paint, claiming to use more than he is, but buying and using the cheapest paint. Check the builder. In larger developments, specifications would have been provided by the architect and engineer and the specified items would need to be approved by the professional before they are used or installed.

Unfortunately it cannot be overlooked that some builders will claim to be established and have established teams, but often times, they will simply make up teams of men to complete works from casual laborers, and have a supervising foreman overseeing the work. These types of construction teams can become difficult to manage, as there may develop a dispute between the laborers and the builder, especially if he has not paid them, which would impact on the work, and become your problem to resolve.

The JBCC (Joint Building Contracts Committee) suite of contracts offer contracts that can be used with your building project. I would recommend The JBCC® Small and Simple Works Contract for your project (smaller projects). This contract is intended for alterations, renovations and additions to existing buildings, or generally used for works such as new building works that are not more than three stories in height and where no sophisticated building systems are used nor complex services are to be installed.

Make sure you sign a contract with the builder where all items, costs, specifications and times are agreed, then keep them to their agreement.

There you have it, part 9 of the 10 lessons I have learnt about developing property through being a project manager. I hope that you have gained some insight from this article that will help you to make more informed decisions on your next building project.

Be sure and keep an eye out for my next articles on the remaining lessons, and leave a comment with any questions or topics you would most like to hear about next. You can also sign up to our mailing list and receive our articles direct in your inbox so you never have to miss an issue.

10 Lessons – Part 8 – Costs

10 Lessons - Part 8 - Costs

Hi, and welcome back to part 8 in our 10 part article series on the 10 things I have learnt about property development, while navigating construction and property investing in South Africa.

At some point in most of the articles so far the point of additional costs has come up, and those would have given you an idea of some the items that can increase your project's development cost. In this article I am going to expand on this point a bit further, because as investors there are some things you can look out for, for yourself which can help to keep these 'surprise' costs to a minimum.

Having done a desktop due diligence would have provided a reasonable estimate of the anticipated costs for the project. Most property investing courses will teach you to include for all the bond, attorney and transfer fees, to account for holding and vacancy costs, and the renovation costs as provided by your builder friend. However, in many cases with simple desktop or estimated assessments there are costs that can be missed, over or underestimated. This is why it is important to put a suspensive condition into the offer to allow for time to do a proper due diligence, so that the correct cost can be determined. Additional fees from professionals service providers, town planning approval costs, and decorative finishing items can bring a large price tag.

Let me give you an example.

The property to be redeveloped has an existing building which needs to be demolished, but there are no other items that appear to need special attention. The external wall looks in good condition and there are some large trees in the yard. An architect friend drew some plans that will go to council for approval. The contractor has given a quotation which includes the demolition of the existing building and building the new house. All of these costs are allowed in your deal calculator and the deal is looking very good.

Starting with the due diligence process, shows that apart from the building plan approval process, there are other approvals also required for the demolition of the existing building, and to obtain a wayleave for the pavement and driveway indicated on the building plans. Obtaining these approvals requires drawing submissions by professionals, therefore additional costs are incurred through professional fees and council submission fees. There are also instances where further reports are required to support an application, which increases the professional fees even further.

The large trees in the yard are another point to note. If the new building requires that the trees be completely removed, as they will interfere with the placement of the building foundations, then it is important to realize that tree removal is an expensive cost, as large trees require the entire root stump to be removed which can run deep into the ground, and are heavy to move.

Contractors often leave things out of their quotes, or will provide a provisional sum value, especially on items that need to be manufactured and installed by specialists. These would be things like the type of tiles, air conditioning systems, solar or generator power systems, landscaping, etc. Extra items like this can start to add up in cost very quickly.

A list of additional costs like this can make or break a project, so know what is coming to build a better deal, and then stick to the budget. If everything is agreed upfront in terms of costs and specifications, then apart from annual escalation, there should be no reason for costs to move.

There you have it, part 8 of the 10 lessons I have learnt about developing property through being a project manager. I hope that you have gained some insight from this article that will help you to make more informed decisions on your next building project.

10 Lessons – Part 7 – Quality Checks

10 Lessons - Part 7 - Quality Checks

Hi, and welcome back to part 7 in our 10 part article series on the 10 things I have learnt about property development, while navigating construction and property investing in South Africa.

For this article I want to touch on the importance of checking your builders' work, or getting a professional to assist you to do so. It's only with checking in often, that you are able to catch the problems early, and then resolve them before they become too costly, or worse be non-conformant to the building code. Contractors and builders take short-cuts, and it is up to you to ensure that the builder is producing good quality work.

Have you ever walked into a bathroom, and there is something very obviously wrong, like the bath is placed along the wrong wall. Or the brand new kitchen counter top has been placed with the sink hole cut out in completely the wrong position. When these things happen the contractor may first try to deny there is a problem, but when they finally agree there is an issue, it is generally followed by the words, "its going to cost this much extra to fix the problem that we've just created."

The point is to not be shy and check in on the contractor often, unless there's a professional assisting to manage the project on your behalf (like me), its up to you to make sure that builder is building an investment to be proud of.

Being able to read the building plans, and making sure the builder can read building plans, is crucial, because when the error can be shown to the builder off the plan, it's less likely that there will be a dispute over the claim and, he would be required to repair that work at his own cost, as it is his fault. Generally, the smaller the builder being used for the project, the more effort will have to put into checking their quality and pace of work. Make sure it is made known upfront that any incorrect work will have to be redone at their own cost. It's been my experience that no matter the size of the project, many builders will often make assumptions, based on past work experience, to complete the build. That is to say that they might build "how they know how to build", which is not necessarily correctly, or to the specification provided by the building code or professional architect or engineer. Even on multi-million rand projects, contractors are found to not follow with the specifications and drawings provided, and it ends up costing the project, client and the contractor due to the cost of the remedial work required.

In my work I have seen examples of this, such as where a lady trusted her friend the builder to build a set of flats on the back of her yard. He started to build the flats and got up to roof height when he suddenly stopped building and disappeared with all of her money. She called us in as professionals to get advice on how to complete the project, but we could not give her good news. First of all there were no building plans, and secondly from the moment we looked at the building work that had already been done, we could see there were problems with the construction as the walls were already starting to form massive structural cracks. The building would have to be completely demolished and redone. She had lost all of her money..

An individual property investor generally does not have knowledge of all of the construction processes required to bring a development project into reality, especially when it comes to undertaking the correct checks and measures. The bigger the development, the more professionals need to be involved to make sure the project runs to plan, specification and within budget. We only know what we know, don't get caught out with things at the last minute because of not getting the right advice and assistance.

There you have it, part 7 of the 10 lessons I have learnt about developing property through being a project manager. I hope that you have gained some insight from this article that will help you to make more informed decisions on your next building project.

10 Lessons – Part 6 – Drawings

10 Lessons - Part 6 - Drawings

Hi, and welcome back to part 6 in our 10 part article series on the 10 things I have learnt about property development, while navigating construction and property investing in South Africa.

For this article I would like to talk about building plan drawings. If you are building a new building, extending onto an existing building or adding a back yard structure to your property, you need to submit building plan drawings to council for approval. I spoke about the importance of having these plans in my 1st article on paperwork, and here I will delve a little deeper into the information included on, and requirements to obtain approval for, your drawings.

According to SANS10400 Building Regulations for South Africa, permission is required to build any structure, even if it is classified as "Minor Building Work", which renovations and the like are generally considered as. This is a big topic of debate and essentially means that a Site Development Plan (SDP) should be submitted for every type of building, addition or external renovation that may be envisioned for the property. Most people would probably tell you that's not the case, but the only way to get permission is to submit a plan for scrutiny by the various municipal departments, on which they will provide comments on the proposed improvements. This for example would quickly show if there are any boundary or servitude problems with the proposed position of the building. To be clear, you don't have to submit building plans for minor building work like renovations (internally), but bigger structures like garages, cottages, swimming pools etc., do need building plans submitted. General rule of thumb is If there is a foundation, it must have a building plan.

To submit an SDP to Council for approval, you need a plan that is drawn and signed by a registered architect. To submit building plans to Council for approval, you must have an architect and structural engineer sign off on the drawings, as they will be held responsible for the overall design and safety, should the building fail in any way.

To make a good deal with a property, it is important that all of the correct drawings and approvals are in place. Be sure to get the approvals that are needed to succeed from the very beginning, because it is those things, when left unresolved, that trip deals up when it comes time to resell the property. .

One last comment on drawings, as individuals you should aim to learn to understand the detail in the architects drawing and what has been included on the drawing. By this I mean, are they standard windows and frames, did he allow for recessed lights or hanging pendants. It is important to understand this so that there aren't some nasty cost surprises because the price difference between one size of item and another can be significant, and equally so when it’s a question of quantity. Knowing what is on the drawing means being able to double check the builders quote that he isn't charging for obvious extra items. I'm also not insisting on having an in depth knowledge of reading drawings and all of the technical information on it, but simply to understand the basic symbols and measures used, to not get ripped off.

There you have it, part 6 of the 10 lessons I have learnt about developing property through being a project manager. I hope that you have gained some insight from this article that will help you to make more informed decisions on your next building project.