Remodeling showed resilience during recession, demand is surging and startup costs are low
Now that the economy is gaining steam, thousands of builders who left the real estate industry during the Great Recession are taking note of increased home sales and are wishing that they had a big enough nest egg to get back into business. Many of them are starting to realize that rather than build new houses, there's a lot of money to be made by remodeling older homes — and the startup costs and risk are lower.
DreamMaker has fielded calls from former home builders who are interested in starting a remodeling franchise, and here's why it's a move that makes a lot of sense:
1) It's a lower investment.
Compared to building speculative houses, which can cost hundreds of thousands of dollars, the startup costs for a DreamMaker remodeling franchise are relatively low. Your estimated initial investment ranges from $99,791 to $261,853. Financing is available, so you won’t need to have all of the money up front. What you will need is a net worth of $100,000 to $250,000 and liquid cash available (savings and checking accounts, retirement accounts, stocks and bonds, etc.) of $50,000 to $80,000.
2) The remodeling market is strong.
The remodeling industry has been growing at a rapid clip over the past several years, and the trend doesn’t appear to be slowing. The Joint Center for Housing Studies at Harvard University recently announced the home-improvement industry could see record levels of spending in 2015. The center’s analysis of the industry concluded that after the housing market went bust during the Great Recession, many homeowners decided to upgrade their homes instead of selling. Also, the federal government issued a series of stimulus programs for upgrades that boost energy efficiency.
“More and more American homes are entering their peak remodeling years,” says Doug Dwyer, president of DreamMaker Bath & Kitchen. “In 2011, U.S. Department of Housing and Urban Development conducted a survey as to the median age of owner-occupied homes and found the average American home is 35 years old. Remodeling activity typically peaks when homes are between 25 and 35 years old. Other elements in the housing market, such as home construction, remain far below the pre-recession peak, while the remodeling industry is on an upswing.”
3) The risk is lower.
The demand for remodeling is constant — it's something people do much more often than they buy a home. You also have multiple projects, so less cash is tied up in any one home. Projects also last weeks or months — not most of a year or longer.
4) You can serve a customer more than once.
While most people would only buy one house from you, that same customer may bring you in to remodel their kitchen, three bathrooms, a den and every other room in the house. DreamMaker Bath & Kitchen, despite our name, can handle renovation projects all over our customers’ homes.
5) You join a team of fellow business owners who help each other out.
You have access to corporate, as well as to other franchisees, for help. In fact, the DreamMaker remodeling franchise owners share a sense of community. Owners meet at our yearly Reunion to build relationships, talk shop, share financials and bounce ideas off of each other.
“Having many other DreamMaker franchisees throughout the country that you know personally, that you can talk to about anything at all, is very valuable,” says Lee Willwerth, co-owner of a DreamMaker remodeling franchise in Ann Arbor, Michigan. “Other remodelers are friends, but they’re also competitors. You can’t discuss your financials. If you are having a challenge, you aren’t going to mention it because you don’t want that information getting to your customers. It’s an arm’s-length relationship. With DreamMaker, there is no separation there. We’ll share everything. We’ve stayed in many franchisees’ homes and spent time with their families. It’s a very tight-knit group.”
Learn more about DreamMaker
DreamMaker Bath & Kitchen helps remodeling franchise partners stand out by offering savvy, proven marketing plans and tools, excellent systems for operating your business, and a wealth of support to help you grow. Our systems encompass the full range of interior remodeling projects, which allows you to win repeat business and grow revenue. DreamMaker’s systems have helped dozens of remodelers, like Steve Miller, find a new level of success. To learn more about the remodeling industry, and why we are excited about the growth potential for our franchisees, visit our research pages. To learn even more, fill out a form to download our free franchise report and start a conversation. We look forward to talking with you!