Home Renovation in a Foreign Country: 11 Keys to Nailing It
By Kathleen Peddicord
Do you daydream about buying a home overseas to restore? Perhaps you could buy a farmhouse in France or a country home in Ireland that's a little worse for wear. Something charming, old, historic and in need of a facelift. I sympathize. I'm drawn to old houses in the way that some women are attracted to new shoes. More than what is in front of me, I see what a house has the potential to become.
This can be a dangerous habit when it comes to buying real estate in a foreign country. In Ireland years ago, my husband and I bought a 200-year-old stone farmhouse that had been vacant for years. The previous owner had been an elderly woman who'd lived in the house alone for decades while it fell slowly to ruin around her. After her death, the rate of deterioration accelerated.
When I walked in for the first time, though, I didn't see the mold growing on the walls or the rot eating away at the wooden door frames. I saw classic Georgian symmetry complemented by high ceilings, ornate moldings, a grand central staircase and original wood plank floors. There were also built-in shutters on all the oversized windows that opened, in every direction, to views of rolling green fields embroidered with low stone walls and centuries-old hedgerows.
I thought this house would offer the best of Irish country life, which is just what we'd come to Ireland to find. Sure, the place needed a little work, but what a great project to restore this stately structure to its original Georgian splendor.
It turned out to be a much bigger project than we'd bargained for. Beneath the wooden floors and behind the wooden shutters, the place was riddled with rot. Before the renovation was through, we'd torn out every piece and every panel of timber. The floorboards, baseboards, window casings and door frames all had to be ripped out, treated, then replaced. If the rot was too bad, a new piece had to be made to fit.
Week after week, we watched as the charming Georgian country house we'd bought was reduced to rubble inside. That's what it can mean to undertake a renovation in a foreign country. We so enjoyed the experience that we undertook another one when we moved to Paris several years later. The floors and the walls of the apartment we wanted to buy were made of stone, not wood, meaning no rot, we assured ourselves.
But in a 300-year-old building, like the one where our Paris apartment was located, there can be other problems having to do with the plumbing, heating and wiring. This project was expected to take two months, but took eight and cost 2½ times what we'd budgeted.
Over the years, I've been involved in eight renovation projects in six countries. Here's the first thing I learned (and that you should know): It always takes longer and costs more than you think it will. I now count on twice as long and two times as much. Use that rule of thumb, and sometimes you'll be pleasantly surprised by the actual outcome.
The second thing I've learned about undertaking a renovation in a foreign country is that you're better off working with professionals. I've managed renovations using off-the-books laborers. Working this way saves money, but adds additional risk and management burden. I've also once undertaken a renovation with a nonprofessional contractor. This not only adds risk and hassle, but doesn't save money in the end, I'd argue, because if the top guy doesn't know what he's doing, you're going to have to pay for his mistakes.
Here are nine other things to know before you undertake a renovation project in a foreign country:
1. Be sure you have the time, money and enthusiasm to complete the project. Renovating a property in another country is a lot of work.
2. The best case is when you can be there, managing the project yourself full time. Any renovation in a foreign country is a challenge. A long-distance renovation can be madness. If you can't be physically present to supervise the work, budget for the cost of your travel for site inspections at critical points and engage someone you trust in the country to visit the property regularly, at least weekly, and certainly before you make the final payment to the contractor. Have your on-site representative send you regular reports, including photographs.
3. If you can't be there full time, you'll also need a plan to protect your investment when you are absent. You need security. You can go high tech and install a security system, or you can go low tech and provide quarters for a live-in caretaker.
4. Investigate the track record and reputation of any contractor you consider. Your contract is only as good as the person with whom you enter into it. A contractor eager for work, anywhere in the world, may underestimate the cost. Once the project is under way, you really have no choice but to continue paying the bills, even when they exceed your expectations. Enforcement of a contractual price can be difficult after the project has begun.
5. Be sure the construction supervisor can communicate with the workers in their language. Even though English is the primary language in Belize, for example, many of the construction workers are Spanish speakers from Central America or Mexico. In Paris, our crew was Romanian and spoke only Romanian.
6. Develop a formal set of plans and stick with them. The workers need direct and constant supervision. If uncertainty sets in about how to do things, nothing gets done right.
7. In many developing markets, laborers' wages are typically paid in cash weekly. Many construction workers are temporary residents who follow the work and do not establish bank accounts. You need a good cost-tracking system to monitor cash flow.
8. Not only the crew, but your contractor, even if he's a good one, needs to be monitored throughout the entire process.
9. Use local materials and appliances whenever feasible. Replacement parts are more readily available for locally purchased products, and local tradesmen are more familiar with the installation, operation and repair of local products. Plus, local products are designed to stand up to the local climate, including humidity, salinity and other local conditions.
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Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring and investing overseas in her free e-letter. Her newest book, "How To Buy Real Estate Overseas", published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.
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