New investors can run into some unique situations dealing with contractors, especially if you have never dealt with contractors before. I have not only have had deal with contractors for years owning and managing rental properties, I’ve also done contracting for myself and other property management companies and individuals. This article will give you some great tips you can actually apply when you’re looking to hire a contractor to do repairs at your property.
The most common issue I see with new investors is they do not ask the right questions. And that’s ok, because below I have provided you with several questions you can use when hiring contractors.
1.Can you provide me a copy of your insurance? Or can I call your insurance agency directly?
2. What suppliers do you get your materials from? Do you have a commercial account?
3. Do you recommend I get 3 bids? Or should I just go with your bid?
4. Are you on social media? Instagram? Facebook? YouTube?
5. Are you listed on HomeAdvisor, Angie’s List, BBB, or any site similar?
6. How long have you been in the business?
7. What do you think may cause this project to be delayed?
8. What is the largest job you have done to date?
9. What are you working on now? Are you busy?
10. Are you or your company licensed?
Getting a written contract. And that doesn’t mean a text message. The contractor should be providing you with a written estimate. Which should include the details discussed in the walk-through or based off the plans or discussion you had with them or the plans. A lot of individuals missed the step for some odd reason. It is imperative that you get in writing what you are paying for, so you can understand what to expect.
I honestly don’t believe you should pay the contractor upfront, before any work is done. This is my personal opinion and this is how I operate my business, unless a very rare occasion. So, my suggestion is that if the contractor wants to be paid “upfront,” start the work and then you pay him/her the same day, once you verified work has been started and/or completed. Though this may cost a little time up front, for me, it has saved headaches in the long term. Also, if it’s a longer project you would obviously want to set up payment draws through the length of project.
Please check out my course landlordblueprint.com where I talk in great detail about dealing with contractors and how to get the best results.
Thelonious C Jones – The Realist Real Estate Investor