The cost of major repairs is harder to read than it used to be due to rising material and labor costs. What is important for rental owners is not just to lower construction costs. This is to reduce the risk of future rework by keeping the necessary work and removing unnecessary work.
If you look at the words "30% reduction" alone, it may seem like a simple discount negotiation. However, what is effective in practice is deciphering estimates, unifying specifications, breaking down the scope of work, comparing suppliers, and planning the timing of repairs. The value of a network is not only in finding a cheap vendor, but also in increasing the number of things you can use to make decisions.
Key points of this article
- Large-scale repair costs are checked by breaking them down by construction item rather than the total amount.
- Comparative estimates have little meaning unless they are compared based on the same specifications and quantities.
- If the estimate is too low, you need to check for additional work or lack of warranty coverage.
- When it comes to repair planning, dividing the work to be done this time and the work to be done next will stabilize funding.
- The value of using a network is that you can get information not only about prices but also about construction quality and past problems.
Why large-scale repair costs tend to increase
Rising unit costs are not the only cause of large-scale repair costs. Another reason is that the owner makes decisions based only on the total cost of the estimate without accurately understanding the scope of work.
Particularly in older properties, multiple projects such as exterior walls, waterproofing, painting of iron parts, lighting of common areas, water supply and drainage equipment, etc. will be carried out at the same time. They all seem necessary, but they don't have the same level of urgency. If you don't separate deterioration that should be addressed immediately from improvements that can be carried forward to the next cycle, you will end up incurring a large cash out all at once.
In addition, estimates issued by management companies and construction companies include temporary scaffolding, groundwork repair, sealing, painting, waterproofing, miscellaneous expenses, etc. If you receive these as a set, you won't know where the costs are. The first step to reducing costs is to break down the quote rather than requesting a discount.
Items to look at first in a quote
In a large-scale repair estimate, we look at the quantity, unit price, specifications, warranty, and additional work before looking at the total cost. Even for the same "exterior wall painting", the price will vary depending on the scope of base repair and paint grade.
| Items to check | Points to watch | What happens if you overlook |
|---|---|---|
| Temporary scaffolding | Area, installation period, safety measures | Can't decide whether only the scaffolding cost is high or reasonable |
| Base repair | Quantity of cracks, lifting, and defects | Additional costs are likely to be incurred after construction |
| Sealing | Replacement or additional sealing? There is a difference in waterproof performance and durability | |
| Paint specifications | Type of paint, number of applications, warranty | Even if it is cheap, it may deteriorate quickly |
| Waterproofing work | Construction method, construction scope, drainage conditions | Risk of recurrence of rain leaks remains |
| Miscellaneous expenses | Site management costs, waste material disposal, transportation costs | Difficult to compare if listed as a set |
If the estimate only states a complete set of exterior wall renovations'' ora complete set of waterproofing work,'' the estimate is weak as a basis for comparison. The owner should confirm the quantity breakdown and specifications with the construction company and prepare the premises for a competitive estimate.
How to compare prices without making mistakes
Competitive estimates do not mean that you can get prices from multiple companies. Even if you list estimates with different assumptions, you won't be able to understand why the price is low.
| Comparison conditions | Matching contents |
|---|---|
| Scope of work | Coverage of exterior walls, waterproofing, iron parts, common areas, and equipment |
| Specifications | Paint, waterproofing method, warranty period, number of installations |
| Quantity | Number of square meters, number of meters, number of locations, scaffolding area |
| Construction period | Construction start date, completion schedule, impact on tenants |
| Additional work | How much is included in the estimate, and how much is separate? |
| Warranty | Warranty coverage, period, and disclaimer |
The lowest price quote is not always bad. However, you should be careful if the groundwork repair is an estimate, the warranty is short, or the conditions for additional work are vague. The superficial savings can translate into rework costs several years later.
Why networks help control costs
When an individual owner compares construction companies by himself, it is not easy to understand the price, quality, past response, and response to problems after construction. This is where networking comes into play.
In places where multiple owners, management companies, construction companies, and experts exchange information on a daily basis, you can check local market prices, past construction examples, post-construction responses, and even complaint trends. Rather than just looking for a cheap company'', it becomes easier to judgewhich company is suitable for this size of property'' and ``is this construction method really necessary?''.
This is also the value that INA Network strives for. The goal is not to lower repair costs per se, but to create a situation where owners are not at a disadvantage due to information asymmetry.
Prioritize before cutting down on construction work
What you want to avoid when doing large-scale repairs is leaving only the work that is easy to understand visually and cutting out the work that protects the building. Even if you clean the exterior, if waterproofing and foundation repairs are insufficient, there remains a risk of leaks and structural deterioration.
Consider the following priorities:
- Construction related to safety such as rain leakage, water leakage, peeling etc.
- Waterproofing and foundation repair related to building lifespan
- Improving common areas related to tenant satisfaction
- Appearance improvements related to rent maintenance and recruiting ability
- Additional investment aimed at increasing future asset value
If you want to reduce it, first consider excess specifications and improvement items that can be carried over to the next cycle. Reducing the work required to maintain a building may seem cheap in the short term, but it can end up being expensive in the long term.
View repair plans and financing at the same time
When it comes to large-scale repairs, it becomes difficult to consider the funds once they occur. It is important to organize the building age, past repair history, and future equipment updates, and create a financial plan on a 10-year basis.
| Timing | Main items to check | Concept of financial planning |
|---|---|---|
| Every year | Malfunctions in common areas, rooftops, exterior walls, and equipment | Budget for minor repairs |
| Every 5 years | Waterproofing, iron parts, water supply and drainage, electrical equipment | Including deterioration diagnosis and updating priorities |
| 10-15 years | Construction involving exterior walls, waterproofing, and scaffolding | Securing funds for large-scale repairs |
| Over 20 years | Piping, equipment renewal, floor plan improvement | Consider exit strategy and borrowing |
Having a repair plan can help reduce unexpected expenses. When consulting with a financial institution, it will be easier to explain if the plan and estimate are organized.
Frequently asked questions (FAQ)
Q1. To what extent can major repair costs be reduced?
A. It depends on the condition of the property. What can be reduced are excessive specifications, duplicate work, items that are higher than the market price, and improvement work that can be carried forward to the next time. It is important to avoid cutting back on construction work related to safety and waterproofing performance.
Q2. How many companies should I get a quote from?
A. The standard is 2 to 3 companies. However, if you get a quote without matching specifications and quantities, you will not be able to compare. Look not only at the price, but also at the terms of the warranty, construction period, and additional work.
Q3. Is the estimate through the management company expensive?
A. I can't say for certain. If the management company is responsible for on-site management or warranty support, these costs may be included. What matters is whether fees and scope of control are transparent.
Q4. What is the best way to reduce repair costs?
A. The key is to identify deterioration early, break down the scope of work, and place orders in a planned manner. The more urgent the work is, the fewer options you have and the higher the cost.
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