Every day, we’re reading and hearing stories about the disruption to supply chains. These disruptions have impacted just about every industry and real estate is no exception.
According to experts at Harvard Business Review, “disruptions can come from any number of factors – weather (floods), natural disasters (hurricanes), economic slowdowns, or even social unrest.” Supply chain disruptions are unpredictable and are happening all over the world.
We’ll leave it to the economists to figure out what’s causing the supply change issues. But whatever the cause, it’s something real estate investors have to plan for as they take on new projects. Not only is it taking longer to get supplies, but if you can get them the cost of supplies continues to increase.
So, how should you move forward with real estate investments in the current market? Here are a few tips:
Plan early and Remain Flexible – Order your “must-have” products as soon as possible – ideally 90 days in advance. And recognize that the product you always use might not be available, so stay flexible. A similar faucet or paint color today is much better than the exact faucet you want in 3 months! Also, remain flexible with brands and colors – or items such as faucets. You may be tempted to stockpile supplies for future projects, but stay within reason. Having too much inventory could force you to pay more in storage fees and the products could become obsolete before they’re ever used.
Track your Inventory Diligently – this is a very time-consuming process but it will help you and your team know where every piece of inventory is at all times. The sooner you know you need something, the sooner you can order it.
Cultivate supplier relationships – Many investors go to the large chain stores because they can save you money, but now’s a time you might want to consider getting to know your local hardware store. Someone who knows you personally might be able to pull a few strings to get you that “must have” item you need.
There’s no telling when the supply chain will return to normal, and there’s nothing we can do to fix it. The only thing you can do is plan accordingly to minimize the impact on your bottom line.
Do you have any other suggestions for dealing with the supply chain? Let us know.