Here at Above 8 Capital, we recently completed our first acquisition and renovation of a short-term rental cabin remotely. Well, almost entirely remote, which we will discuss further! Here are some of the lessons learned through the process.
Past Relationships do not equal guaranteed results in the future.
Weather always has a say.
Product vision is challenging to convey remotely.
The small details can be challenging to capture.
Let's dive into each of these items and provide recommendations to overcome them on your next remote renovation project!
Past relationships do not equal guaranteed results in the future. This is the first and foremost lesson we learned completing this specific project. The acquisition was in a market we have operated heavily for years. Because of this, we had what we thought were air-tight contractor relationships that would guarantee a smooth renovation. Unfortunately, that was not the case. Although we had worked with this said contractor for years and done many great things together, that relationship did not guarantee easy success. Because of our previous relationship, we were a little too loose on contracts and delivery timelines. We allowed the friendship side of things to give a bit too much leeway, resulting in a slight cost overrun but, more importantly, delays and rescheduling that cascaded to other contractors. So the big lesson learned here is that even though a relationship may be mature, it is always important first to treat every portion of a remodel with a business mindset. This means quality contracts, specific bids, detailed scope of work, and hard deadlines for delivery with acceptable contingencies. Always be friendly, but remember that business is business at the end of the day, and we must hold one another accountable!
In relation to timeline, always remember to give more time then you think to mother nature. Especially when working on a project in a rural mountain destination, it is vital to put weather delays into the rollout plan. This is primarily to keep everyone on the same page and allow some weather contingencies to occur without blowing right past your scheduled delivery date. Essentially, this boils down to giving yourself some grace on the delivery date to allow for Murphy's law. We recommend adding 10% to whatever you have determined your renovation schedule is and making that your internal delivery date. This will help with your sanity and updates to your LPs in relation to your conservative launch date.
Product vision is challenging to convey remotely, and the small details that are hard to capture are heavily related. Specifically for short-term rentals, the renovation is also creating a product. This means design, aesthetics, and feel all factor in the guest experience. These are vital to creating a short-term rental product that will succeed. There is only so much you can do via design boards, construction plans, and layouts. Small details like a kitchen setup, final layout, décor, etc., can only be completed when you have been in the space. This is why we say this project was completed remotely with an asterisk. To get it right, we had to take two coast-to-coast trips to complete the project. This is not a huge or burdensome problem; however, we now know that two trips will always be required in the future and will plan for that in the future. The first site visit should be early in the process. It should be coordinated so that interfacing with all contractors involved in the project happens and that project vision and details can be discussed. This site visit is essential to lay out the required work and solidify the schedule and requirements so that everyone understands their roles and responsibilities. The second visit should be near completion. The purpose of the second visit should be to verify all completed work is to contract standard. Bring the punch card and go through it with your contractor. Make sure everything is hit, and if it's not, ensure it is understood the work will be complete while you are onsite. Lastly, this visit should include the final preparation of the property to accept guests. Complete the last furnishing of the property. Get any piece of technology in the home up and running. Tests the home systems. Finally, stage for photos, and get your professional images complete. When you leave this last time, the property should be able to host its first guest immediately.
Doing any real estate project remotely always has its fair share of challenges, but they are doable! Remember the next time you gear up to tackle a remote project, ensure you have solid contracts, give yourself grace on the delivery timeline, and plan for two strategic site visits. If you do these things, you will create a beautiful product that tenants and guests love.
View the project here: millardscabin.com/hayeshideout or airbnb.com/h/hayeshideout
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