Jack Hammers In Paradise
Kathie and I flew to Medellin yesterday for a quick trip to meet with our contractor, Carlos, who is managing the renovation of the apartment we bought here in July. I haven’t seen the apartment since the demolition work began, and I couldn’t help but wonder what in the world we’d paid for when I arrived on the scene yesterday afternoon.
Walls, windows, doors…most all of them are gone. The windows that remain will be gone soon, too, assuming the building administration gives us permission to alter them. Most all the floors are missing. Those not being replaced have been opened to allow Carlos’ guys to run new pipes for the new bathrooms and new cables for electricity, telephone, and Internet.
Not a single fixture remains. Nothing.
Kathie and I walked in, looked around, looked at each other, and started laughing. What else could we do? In all our years renovating places around the world, we’ve never seen anything like this. While we stood in the middle of what used to be the living room shaking our heads, a guy behind us started up a jack hammer.
What could he be planning to tear out at this point, I wondered. There’s nothing left.
As far as I was concerned, the apartment we bought in July needed some minor work to bring it up to a reasonable standard for rental.
My wife had different ideas. For her, this was a personal project, an investment in a place where we’ll be spending time long term with the kids. I’m beginning to see that, at the time we made this purchase, I had no idea what she had in mind.
The budget is out the window. We met yesterday with the cabinet-maker who’ll be building the kitchen. The kitchen cabinets alone are eating up more than a third of the budget as I’d understood it. But I’ve been assured that the original figure I had in my head was a figment of my imagination.
Now we’re debating whether to use the cabinet-maker for all the other woodwork–library bookshelves, doors, closets, windows, etc. Or maybe (as I’m lobbying) to try to find a more run-of-the-mill (read: cheaper) carpenter for these less complicated things.
When you take on a renovation project you have the same considerations as you do when making any real estate purchase–including: Are you renovating for yourself or for investment?
When renovating for investment, it can seem sensible to stick with the basics. Off-the-shelf kitchen cabinets, inexpensive bathroom fixtures, basic lighting, and low-end tiles. That approach saves you money in the short-run and can improve your yields in the long run. But it forgets the end-user–be he the guy you’re eventually going to resell to…or yourself and (perhaps) your family.
I owe this lesson to my wife, who has taught me (though I don’t like to admit that to her) that shaving US$50 here and US$100 there off the costs of sink faucets and bathroom tiles can amount to some amount of short-term savings but, often, also results in a property that is not nearly as resaleable.
Certainly, it means a place less comfortable for personal use.
Now, when I shop property, I’m less interested in places that have been renovated by the previous owner than I am in something new-built or that has been allowed to fall into a state of complete disrepair. Buy new and you know what you’re paying for. Buy old and decrepit and you should be able to negotiate a price to accommodate the cost of upgrading.
Buy “renovated by the previous owner,” and you’ll have to pay for that guy’s renovation investment (the cost of which he’s going to be looking to recoup in his sale to you) plus the cost of re-renovating.
So while I’m cringing at the extras Kathie is building in to this place, I also see the long-term value, both in terms of personal enjoyment when we spend time here with our children…and also in the context of the future resale value.
Meantime, there is some good news. The exchange rate has swung in our favor recently, meaning that the dollars I transfer now to cover the cost of the renovation will buy about 7% more Colombian pesos than did the dollars I transferred in July for the apartment purchase.