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Post-Construction: What to Expect After a Construction Project

May 13th, 2022 |

The post-construction phase is a crucial stage of a construction project. As an investment property owner, you will have an opportunity to confirm that the contract terms were fulfilled. You’ll also learn about the care and mechanics of the building, obtain relevant paperwork and address any concerns. Read on to find out more about the post-construction process.

Walkthrough and Punch List

Before the contractor wraps up the project and hands you the keys, you will complete a walkthrough of the building. This is your opportunity to examine the building and make sure that the contract terms have been fulfilled. Make a list of items that need attention. The contractor will do another walkthrough with you and make a punch list of items that need to be addressed. 

Final Walkthrough and Paperwork

After the items on the punch list have been addressed, you will do a final walkthrough with the contractor. If the completed project meets your approval, the contractor will give you the keys to the building. You should also receive a binder containing warranties and other relevant paperwork. 

Certificate of Substantial Completion  

You will then hear from the architect, who will ask if any problems need resolving. If you are satisfied with the completion of the project and the fulfillment of the contract, the architect will issue a certificate of substantial completion.  

Certificate of Occupancy

Once the certificate of substantial completion has been issued, it’s time for a local government inspection. If the building passes inspection, the inspector will issue a certificate of occupancy. As a property investor, you will need this post-construction document as proof of the following:

  • Building class, such as single family, multi-family, commercial or mixed use properly.
  • The structure is suitable for occupancy.
  • The structure complies with housing and building standards and codes.

Operations Manuals and Training

After the project is completed, the contractor will give you an operations manual and schematics for the building. This paperwork includes blueprints that the contractor used during the project, as well as information about the mechanics of the building. 

In addition to the operations manual, you should receive any training necessary for the care of equipment n the building. It’s important to have training and written instructions to ensure that you have a clear and consistent understanding of operations..

Post-Construction Follow-Ups

You should also have follow-up visits with the contractor to address any issues that may come up. Problems should be addressed promptly according to the warranties in the paperwork binder you received from your contractor.  

An important part of general contracting work is post-construction follow-ups. Your contractor should communicate with you periodically over the two years following project completion. These check-ins let you ask questions or address concerns and allow the contractor to anticipate future needs. For example, you could discuss remodeling or renovations that may take place at a later date. 

From planning to post-construction, RH Blanchard is ready to help with your general contracting needs. Contact us for a free quote.

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5 Tips for Buying Your First Rental Property

May 9th, 2022 |

Buying your first rental property can be exciting as well as stressful. There are many factors to consider, from hiring a real estate agent to applying for a loan pre-approval. This blog post provides a helpful overview for first-time rental property buyers. 

1. Hire a Real Estate Agent or Attorney

A real estate agent or attorney is indispensable when buying your first rental property investment. It’s important to have a qualified professional in your corner. You will need an experienced professional working for you and representing your interests. A realty agent or lawyer knows how to negotiate prices or spot potential problems. 

Also, make sure that the person you hire has expertise in the type of property you plan to buy. For example, if you are investing in an office building, you’ll want to hire an agent who specializes in commercial property rather than a standard home realty agent. 

2. Get Loan Pre-Approval

An important step in buying your first rental property is obtaining a loan pre-approval. Pre-approval for an investment property loan demonstrates to the seller that you are serious about buying their property. It also helps you set a budget and understand what types of investment properties you can buy. Before you apply, take steps to improve your chances of pre-approval: 

  • Save for the down payment 
  • Have a credit score of at least 680
  • Maintain a low debt to income ratio
  • Have cash available for six months of expenses 
  • Be able to prove your job history or income

3. Research Rental Markets 

With the help of your real estate agent or attorney, research different areas to look for strong rental markets. For example, population growth often creates a flooded rental housing market and increases demand for rentals. Other factors to consider in your research include 

  • Job growth that expands the housing and commercial property markets
  • Local crime rate
  • Average household income
  • School district 
  • Average price of similar properties in the neighborhood  

4. Get Relevant Inspections

Before you sign on the dotted line, have the property inspected. It may be tempting to waive inspections to save money, but you may end up regretting the waiver. An inspection discovers problems with the property that may give you leverage when negotiating. You may want certain issues to be repaired before you buy the property. Or you may be able to use the inspection results to negotiate a reduced price. 

5. Hire a General Contractor to Get the Property in Shape

You may want to make some changes to your newly purchased rental property. It is best to avoid buying a “fixer-upper,” but you may want to add upgrades or other renovations to add value to the property. When buying your first rental property, your best bet is to hire a general contractor for a remodeling project. 

A general contractor has the necessary experience and expertise to hire qualified subcontractors, obtain permits, find the best materials for the job and carry out other relevant tasks. Boston-area rental property owners can rely on the general contracting experts at RH Blanchard. Get in touch for a free quote.

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A Guide to Pre-Construction Services

April 21st, 2022 |

Pre-construction services help ensure that your renovation project stays on budget and on schedule. From creating a building model to estimating costs, important work must be done before construction begins. If you are planning to update your investment property, a construction manager can coordinate pre-construction services. 

Analyzing Existing Conditions  

Before any renovation work begins, the condition of the existing structure should be analyzed. Material strength, structural integrity, piping, and other elements must be considered. This pre-construction service is essential for determining the extent of work that is needed for the remodel, as well as avoiding costly surprises. 

Building Model 

Software can be used to create a 3-D model that can help you visualize the completed project. Building information modeling (BIM) software can simulate every phase of the project lifecycle. This technology is a helpful tool for making decisions about design, construction, electrical and plumbing systems, and other factors. BIM can help stakeholders foresee potential issues before they become costly problems.

Cost Estimate

 The cost estimate is based on how much the completed renovation project will cost, as well as issues that may come up during the project. It’s a good idea to get two or three estimates for your project. Items that go into the cost estimate include: 

  • Labor
  • Materials
  • Equipment
  • Subcontractors 
  • Permits

It’s important to have a skilled and experienced estimator create the cost estimate. They will know which relevant factors to consider, such as market conditions, when figuring the estimate.  

Scheduling and Logistics

Scheduling a construction project involves a wide range of logistical considerations and is one of the most complex pre-construction services. It’s important to have an experienced construction manager on your team to develop a project timeline. Bid releases, permits, meetings, and inspections are just some of the elements that must be coordinated. It is especially important to factor in the permit application process, which must go through the proper federal, state, and local agencies. 

Bid Packaging

At this stage, bids will be developed based on the scope of the project. The construction manager will make sure that all contractors, subcontractors, and vendors have accurate information about the project. Factors such as existing site conditions, design variables, and project timeline are important considerations when developing a bid. The construction manager will review bids with you for your approval.

Material and Labor Procurement  

Obtaining the necessary materials and hiring skilled subcontractors is a crucial pre-construction service. A construction manager must be knowledgeable about building materials and prices and must have a readily accessible network of construction professionals and subcontractors. They should have a well-vetted list of suppliers and professionals with proven reliability. The goal of this pre-construction service is to obtain the best quality possible within the project budget.

Hire Experienced Construction Professionals  

Your investment property deserves top-quality workmanship, from pre-construction services to project completion. At RH Blanchard, our team has more than a decade of experience in general contracting and project management. If you’re ready to update your Boston-area investment property, get in touch today for a free quote.

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Ask a Contractor: What to Expect During Renovations

March 21st, 2022 |

Before you begin a renovation project on your investment property, there are many factors to consider: cost, permits, hiring renovation contractors and more. Here is a guide to help you through the process.

Mandatory or Optional Upgrades

Your renovation project may include either mandatory or optional upgrades, or a combination of both. 

Mandatory Upgrades

Sometimes a building needs mandatory upgrades to comply with local safety codes. For example, you may need to upgrade the electrical or plumbing systems before you can rent out a home. 

Optional Upgrades  

Optional upgrades are a matter of personal preference and are not required for code compliance. Examples include installing solar panels, adding a new porch or replacing kitchen countertops. Optional upgrades can improve the design, func or curb appeal of your home. 

Licensed Contractor

A licensed general contractor has the experience and knowledge necessary for a successful and safe renovation project. In Massachusetts, for example, a general contractor must have a valid Construction Supervisor License (CSL). Specific licenses are required for plumbing, electrical and other specialized work. You can verify a Massachusetts contractor’s license with the Board of Building Regulations and Standards

Contract

A contract need not contain pages of legal jargon, but it should clearly state the essential points of the renovation project. Before you sign, make sure that the following details are written into the contract: 

Project description, including materials and their costs, labor costs, permit applications, debris disposal, liability insurance and workman’s compensation coverage. 

  • Payment installment schedule and payment method. 
  • Estimated project start and end date.
  • Lien waivers for each payment, stating that the funds were used to pay for materials and labor described in the invoice. 
  • Clear procedure for changes, including a description of new work, cost, and impact on the timeline. 
  • Escape hatch providing a specified time period to rescind the contract without penalty.
  • Signatures of both parties (general contractor and you)

A contract is essential if you want to avoid surprise charges, unnecessary delays, debris left at the construction site or other issues. 

Permits 

For a renovation project, the general contractor usually applies for permits through your local building department. A permit application ensures that the project will adhere to local building and fire codes. The required permits depend on the type of project. In Massachusetts, for example, permits are required for alterations to a building’s structure or major systems, such as 

  • Home additions
  • New garage
  • New deck
  • Interior wall removal 
  • Electrical rewiring 
  • Plumbing replacement

The permit must be prominently displayed at the project site. If construction has begun without the proper permits, the building department can order a shutdown or even a tear-down of the project. 

Inspections  

The local building department will send an inspector to check certain stages of the renovation. These inspections ensure that the project is meeting safety code requirements. If a violation is found, the inspector will tell the contractor what to do to bring the project up to code standards. 

The general contracting professionals at RH Blanchard have the skills and experience for your renovation project. Get in touch today for your free quote.

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How to Make Money on a Vacation Rental Property

March 7th, 2022 |

Buying a vacation rental property involves many decisions, from choosing a location to setting rates. With a projected 3.62 percent annual growth rate, many properties investors are entering the market. If you’re wondering how to make money on a vacation rental property, read the following guide for helpful tips.

Choose the Right Location

Before you buy a vacation rental property, research the location. An area that attracts tourists year-round is ideal. Does the property have a breathtaking view? Is it within walking distance of museums or quaint local shops? Whether it’s in Cape Cod or the White Mountains, your property will be easier to market if it’s in a popular location. 

Some locations, however, do not allow short-term rentals. Other areas limit the number of short-term rental guests per property, per year. You don’t want to end up paying a fine, so make sure you research regulations at the city, county, state and neighborhood levels.  

Buy the Right Type of Property

This is one of the most essential tips for how to make money on a vacation rental property. As an investment property owner, you’ll want to buy a vacation rental home that will generate income. A multi-family property will accommodate more guests than a single-family home. A spacious home with multiple bathrooms and bedrooms will allow you to charge more per night.  

Decorate and Update Amenities 

Your property should be so appealing that guests will want to post pictures of it on social media. The home should appeal to a variety of tastes, so start with a neutral color scheme. Add some décor that is relevant to the location. For example, include some nautical accents pieces in a coastal Rhode Island rental. Keep the house stocked with necessities, such as cooking supplies, shampoo, linens and paper products. 

This is not the time to skimp on expenses, so go ahead and invest in high-quality furnishings. An interior decorator who specializes in vacation rentals can give you valuable advice.   

Finally, you’ll want to include a few high-demand amenities. Guests particularly appreciate the following: 

  • Pet-friendly accommodations 
  • Hot tub, especially if the property has a scenic view
  • WiFi Internet access 

Set Rental Rates

Setting rental rates is a surprisingly complex task. Gone are the days of fixed rates for weekdays and weekends. Today, dynamic rental rates fluctuate with the seasons as well as short-term events such as bad weather.

Start by researching comparable vacation rentals in the same area. It’s also a good idea to consult with experts in the vacation rental market. Short-term rental property management companies can help you calculate your rates by using algorithms, local expertise and other tools.  

Market Your Vacation Rental Property 

You’ve found the ideal property in a charming location. You’ve decorated, added amenities and set your rates. Now it’s time to spread the word about your vacation rental home.  

You can choose from a variety of listing sites. Some sites specialize in certain types of properties, from city apartments to remote cabins. A short-term rental management company can use SEO, social media ads and other resources to help you market your property. 

You want your vacation rental to make a fantastic first impression. At RH Blanchard, our experienced general contracting team can get your property in shape for listing. Contact us today for a free consultation.

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5 Advantages of Basement Renovations

February 16th, 2022 |

A basement does not have to be a dark, forgotten space in your investment property. It can turn into a second bathroom, bedroom, or another source of income. Read on to learn about basement renovation costs and return on investment (ROI). 

#1 ROI vs. Basement Renovation Cost

Basement renovation costs can be pricey, but this type of renovation provides a 70 percent average ROI nationwide For houses in Massachusetts and other New England states, the ROI averages 52.8 percent. The cost of a basement remodel depends on the type of remodel and the planned use of the space. The nationwide average cost for a midrange basement remodel is $71,115, while in New England it’s $76, 429.  

Of course, the size of the basement helps determine the cost of a renovation. For a small 300- to 700-square foot basement, the price typically ranges from $9,000 to $52,000. Renovating a 1500- to 2,000-square foot basement, however, can cost from $45,000 to $150,000.  

#2 Increases Home Value

As a property investor, you’re keeping your eye on the bottom line — especially your property value. Basement renovations tend to increase the resale value of homes. You will likely be able to recoup a good chunk of your expenses when you sell your property.  

Let’s say you’re spending $50,000 on a Boston-area basement renovation. With the typical ROI of 52.8 percent for the region, your resale value could increase by $26,400. 

#3 Increase Living Space

With a basement renovation, you can increase the living space of the property without enlarging its footprint. This is an important advantage if zoning codes prevent you from expanding outward or upward. In some neighborhoods, an addition may not be possible because it will be too close to the neighboring house. Other locations have a two-story limit on homes. If your property has a basement, you can still add that extra room or apartment. 

#4 Increase Income

If zoning laws allow it, you can turn the basement into a rental unit and increase the income potential for the property. If you keep the property after the renovation, you will have increased cash flow from the additional unit. If you sell the property, the potential income from the renovated basement is a good selling point. A buyer may see the rental income as a chance to ease the burden of mortgage payments. 

#5 Additional Uses for a Renovated Basement

Bathroom 

An additional bathroom can be a deciding factor for a home buyer. The cost of hiring a plumber for this renovation can be worth it when it’s time to sell the property.

Bedroom 

Adding a bedroom increases the size of the home as well as potential rental income. A bedroom must have two forms of egress, such as windows, so the project will likely involve knocking down foundation walls to create openings. 

Recreation Room

Since it is below ground, noise from loud parties or kids playing will be muffled. A basement is an ideal location for a recreation room if you don’t want to disturb the neighbors. 

With more than 15 years of general contracting experience, RH Blanchard will give your Boston-area basement renovation the care it deserves. Get in touch for a free consultation.

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A Guide to Investing in Rental Property for Beginners

February 8th, 2022 |

Rental properties are an attractive option for many investors. If you are new at buying rental property, there are many considerations you should keep in mind. Before you take the plunge, read this guide to investing in rental property for beginners. 

Decide If You Want to Be a Landlord 

When you buy a rental property, you become the landlord of the property. You can hire a property manager for these tasks, but they typically charge between 8 and 12 percent of collected rent. If you are a novice rental property investor, you will likely have to deal with the following issues yourself:

  • Screening prospective tenants
  • Doing your own repairs on the property
  • Hiring contractors for repairs and maintenance  

Research Property Location

Location is key when it comes to investing in rental property. Look for mid-range properties in an economically healthy neighborhood. Do a market analysis to find out the following: 

  • Landlord-tenant laws
  • Rental population
  • Rental rates
  • Price to rent ratio
  • Property taxes
  • Crime rate
  • Quality school district 
  • Job market growth

Get in Shape Financially

Before you start shopping for rental properties, you’ll want to be in the best possible financial shape. Lenders have stricter standards for rental property mortgages than for traditional mortgages. Here are some typical requirements for a successful rental property mortgage application: 

Income vs Expenses

During your first year as a rental property owner, a 6 percent return on investment (ROI) is a reasonable goal, with the expectation that it will increase over time. The rent you charge must cover operating expenses, which can total 50 percent of the rental income you collect. Expenses can include  

  • Maintenance and repairs
  • Homeowners association fees
  • Homeowners insurance
  • Property taxes

On the other hand, rental property owners often qualify for tax breaks on mortgage interest, maintenance and other expenses. Rental properties also often increase in value over time, so you may be able to recoup expenses if you sell the property..

Advantages of Buying Investment Properties

Although there are exceptions, real estate values are generally more stable than other investments such as the stock market.

  • Rental property is a source of passive income, especially if you hire a property manager. 
  • As you collect rent income, you can devote time and energy to your full-time job.
  • You don’t have to pay Social Security taxes on rental income.

Disadvantages of Buying Investment Properties  

Rental property investment is not for everyone. Here are some potential drawbacks to consider: 

  • Interest rates are usually higher for rental property mortgages than for a traditional mortgage. 
  • As stated above, rental property mortgages are more difficult to obtain than traditional mortgages.
  • Dealing with tenants can be a hassle if you don’t hire a property manager. 

If you’re a Boston-area rental property owner, RH Blanchard can help with your general contracting needs. Contact us today for a free consultation.

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Understanding the Difference: General Contractor vs Construction Manager

January 21st, 2022 |

If you’re thinking about starting a construction project on your investment property, you may be wondering what is a general contractor vs construction manager. A construction manager represents you, the property owner, and is part of your team. A general contractor, on the other hand, wins the job by bidding on your project. Read on for more comparisons between general contracting and construction management.  

Pre-Construction Phase

A general contractor usually is not involved with pre-construction planning. Once the architect has completed the design, the general contractor enters the project and develops a bid package based on the design. Other pre-construction duties include hiring subcontractors and obtaining permits. 

A construction manager is involved from the beginning of the project and often has input into the design process. Like a general contractor, they handle hiring subcontractors for the project. 

Budget and Timeline

General contractors and subcontractors both keep the owner informed about the project budget, timeline, and delays. The general contractor and subcontractors must personally adhere to the schedule, while the construction manager monitors the contractors’ adherence to the schedule. 

A major difference between the professions is the way they are paid. A general contractor is paid based on their bid for the project. If the completed project costs less than the bid, the general contractor keeps the difference. If the project will take longer or cost more than the bid, they must either charge the client more money or change the project specifications. 

A construction manager is paid a flat fee that is usually a percentage of the total cost of the project.  They set and oversee the budget, but unlike a general contractor, they are paid the same amount whether the project goes over or under budget. 

Subcontractors and Site Supervision

Both general contractors and construction managers hire and coordinate subcontractors. One difference, however, is that a general contractor usually has a network of trusted electricians, plumbers, and other subcontractors. Over time, these subcontractors develop a sense of teamwork and cohesiveness. 

A construction manager hires subcontractors, but their immediate team usually consists of project managers, accountants, and other professionals who do not do construction work. The team works at every stage of the project, from design to completion.

General contractors and construction managers may hire supervisors to oversee a construction site. A general contractor implements and oversees job-site safety, while a construction manager oversees the constructors’ adherence to safety procedures and building codes. 

Credentials for General Contractor vs Construction Manager

Qualifications for both professions vary from state to state. In Massachusetts, general contractors and construction managers must obtain a construction supervisor license from the Massachusetts Office of Public Safety and Inspections. Both professions require three years of work experience in building construction and design. Enrollment in a relevant vocational school or college degree program can substitute for some of the job experience.

Although it is not required for a license, a bachelor’s degree in construction management can be an advantage when looking for a job as a construction manager.

At RH Blanchard, we’re the experts when it comes to Boston-area general contracting and project development. Get in touch today for a free consultation.

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6 Interior Design Trends for 2022

January 6th, 2022 |

When it comes to interior design trends, 2022 is chock full of bold ideas. This is the year to add fresh colors, textures and design to your investment property interior. Read on to find out what’s new in interior design. 

Windows, Windows and More Windows 

A wall of windows helps banish that cooped-up feeling we’ve all had during the past two years. It’s time to let sunshine and nature into the home with windows and more windows. For example, multiple casement windows over the kitchen sink and range let a family enjoy the outdoors while they cook or grab a snack.  

Light Floors and White Walls 

You’ll want to maximize the light that streams through all those windows. Light-colored floors and white walls will reflect that sunlight back into the room. This color scheme also helps a room look spacious and airy. Light-colored flooring is available in a variety of materials, including 

  • White oak 
  • European white oak 
  • Maple
  • Bamboo
  • Ash
  • Sandstone 
  • Travertine  

Black painted trim or colored, textured furnishings add contrast and warmth to rooms that have light floors and walls.

Patterned Flooring

Here’s an interior design trend that making a comeback in 2022: patterned flooring. You can choose from many geometric patterns for your wood floor. For example, the classic herringbone pattern adds elegant style to hardwood floors. To highlight the flooring, choose neutral colors and natural materials for your furnishings. 

Patterned tile is another flooring option that works well in a bathroom. Consider different patterns and colors for the shower floor and bathroom floor.  

Green Tones 

With the emphasis on neutral and subdued tones, you can still add a subtle pop of color with green. It’s no coincidence that many paint companies chose a green tone as their 2022 color of the year. Cool, green walls complement light wood flooring, while green trim subtly sets off white walls. From olive to evergreen, there’s a shade of green to suit every taste.  

Kitchen Islands 

In 2022, a kitchen island offers a lot more than extra counter space. Depending on its size, an island can be a multifunctional, efficient addition to a kitchen. It’s still a great place to prep vegetables or store pots and pans, but why not add seating and a prep sink? Install a small refrigerator and microwave oven at the end of the island so that people can heat up food without blocking traffic. With its central location, a large kitchen island can conveniently include a dishwasher and pullout trash container.  

Sustainable Materials 

Sustainability continues to be a hot trend in 2022, and interior design is no exception. Responsibly sourced woods, natural fabrics and other sustainably produced materials are available for the home interior. High-performance windows let you conserve energy and save money on heating and cooling bills. Wood, stone and other natural materials help create a serene, calming environment. You may even inspire others to adopt sustainable interior design practices.

Are you ready to update your Boston area investment property with the latest interior design trends 2022 has to offer? At RH Blanchard, our team has outstanding general contracting experience and skills. Contact us today for a free quote.

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