If you need work done around your property, one of the biggest priorities is hiring a contractor. You want to be careful not to hire just any contractor, though, and find the best one suited for the job.
Choosing a contractor is no easy task, and vetting should not be taken lightly. You want to ensure that the work agreed upon initially is the work that gets performed within budget, safely, and promptly.
To ensure all of these aspects of your project, you need to know your contractor. Keep reading to find out more information about why it’s essential to know your contractor and how to find the right one for the job.
Table of Contents
Article at a Glance:
Finding the right contractor is crucial but by no means a simple thing to do. It’s essential to know your contractor because:
- You can damage your relationship with your tenant based on the work they do
- Cheaper work upfront might end up costing you more down the line
- You need to make sure they are licensed and insured
There are specific steps you can follow to help ensure you find the proper fit, which includes:
- Getting recommendations
- Investigating the facts
- Making plans
- Hiring local when able
Why It’s Important to Know Your Contractor
As a rental property owner, you need to know your contractor.
You Can Damage Your Relationship with Your Tenant
Nothing can get you in more trouble than a bad repair or a lousy rehab. If a tenant calls in a repair request and is handled poorly, it will affect your relationship with that tenant. This will not play out very well throughout the time of your tenant living in the property.
Communication is essential, especially when it comes to maintenance.
Cheaper Work Upfront Might Cost You More Down the Line
It might be tempting to look for a willing contractor to complete work cheaper than a more reputable company. But, you have to remember that with the higher costs of a more reputable company, you are paying to ensure insured and completed work is completed by licensed contractors.
For example, maybe you need a new heating unit, and you are looking for the cheapest option possible. You hire someone on the side who is willing to do the work cheaply, and they install the unit in the house in the spring. Later that fall and winter, the tenant begins to turn on the heat and their power bills go through the roof.
What’s the cause? The unit that got installed was strip heat, which sucks as much energy and power as possible. Now, you have a tenant’s power bills that are $600 to $700 a month, which is not affordable, and at the end of the day, it is your fault. Ultimately, you are responsible for covering some of the power bills and replacing the unit less than a year after it has been installed.
Let’s say you try to find the guy who installed it to see if you can do something. Unfortunately, you find out that he is no longer in business, making an even bigger mess for you to clean up.
Ensure They Are Licensed and Insured
You always want to make sure the person you use to rehab your house or do repairs is licensed and insured. Also, as you can see from the example, it might be essential to make sure that the company has been around for a while.
Tips for Hiring a Contractor
Now that you know why it’s essential to know your contractor, here are a few tips to help you when you start your search.
Get a Recommendation
One of the best ways to find a reputable contractor is by getting recommendations from family and friends. You can also check out the National Association of the Remodeling Industry for an extensive list of members in your area.
Other recommendations might come from building inspectors or lumber yards. Either way, having a positive recommendation from someone you know is better than just searching blindly.
Investigate the Facts
Once you can narrow down your list from your initial recommendations, you’ll want to start doing your homework. If able, reach out to previous clients to see what they thought of the work of the contractor you are researching. You can also try to see if the clients will share the final outcome with you.
Another great idea is to visit the current job site of the contractor. This way, you’ll be able to see how they work in action, see the cleanliness of the job site, the safety, and all other elements that will be important to you.
Make Plans
As you continue narrowing your list, the next step will be to start making your own plans. You’ll want to get your plans to begin requesting bids from your final few. Each contractor should break down the offers by labor costs, materials, profit margins, and other expenses.
As a general rule of thumb, this is how your costs should breakdown:
- 40% of the total price should be on materials
- 15% to 20% should be the profit margin
- The remainder should cover overhead
Hire Local Licensed Contractors
Generally speaking, local licensed contractors will be the best suited for your work because they will be easier to get a hold of should any issues arise in the future. Additionally, they will be more aware of the building codes in your area.
When looking to hire locals, take a visit to their physical address to make sure everything adds up. While some contractors might go door to door, be suspicious of anyone who will not leave a contract with you overnight.
Wrap Up
Hiring a contractor can be an arduous process, but it’s necessary to do so carefully for your rental property’s longevity. Even more so, ensuring you have a quality contractor helps to foster the relationship between you and your tenants, who will value quality work. As much as you can, seek out recommendations from family and friends and always be sure to do your research before hiring.
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.