Landlording & Rental Properties

The Landlord’s Guide to Screening Vendors

Expertise: Landlording & Rental Properties
15 Articles Written

Vendor screening for property management takes time and research. Still, the effort you put into finding the right personnel will save you real money by avoiding potential damages or when faced with liability or Fair Housing claims.

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The Importance of Screening Your Vendors

Property managers and landlords will likely utilize a vendor at some point in their career for a variety of services—from repairs during tenancy to routine maintenance during turnover. While every vendor should be vetted prior to service, maintenance vendors are especially important to screen because of their interactions with your tenants and potential liability to your business.

This can be a more complex proposition than it appears. Choosing a vendor for your rental property business is more than simply locating service providers who are skilled in their trades. Each vendor you hire in turn becomes a representative of your business, and their service will affect the experience and opinions of your tenants and homeowners. Vendors should be carefully selected before you commit to working with them in order to protect your business and ensure the safety of both your property and your tenants.

Prior to choosing choose a service provider with whom to work, it is important to clearly map out what your rental properties will need from each vendor. Identifying your specific wants and needs will help you make the right decision when comparing different services. Once your needs have been established, you’ll need to do some research on local vendors for each type of service you might require as a property manager. If you self-manage, decide which jobs you can handle yourself and which ones you want to contract out to a vendor.

Every landlord should have a compiled list of approved vendors ready before they are actually needed. Taking the time to research and select reliable service providers is much easier to do when you aren’t faced with an emergency situation.


How to Start the Process of Screening Vendors

Begin your vendor screening by examining some key basic requirements of each service provider. These can include things like:

  • Access and approachability: How close is the vendor located to your rental properties? Are they easy to contact and do they return correspondence in a timely manner? Do they offer 24/7 or emergency services?
  • Staffing protocols: Does the vendor screen any employees or contractors that they may send to work on your property? As a landlord, you could ultimately be found responsible if you contract a vendor who employs a dangerous or irresponsible person who causes harm to a tenant, your property, or themselves.
  • Depth of experience: How long has the vendor been in business? How many projects (and what type) do they have under their belt? Do they have testimonials or references that you can use to verify the quality of their work and past business relationships?
  • Insurance coverage: It is extremely important to verify that your vendor has insurance to cover any damages, injuries, or liability claims if necessary.
  • Proper licensing: Make sure both the business license and the individual’s professional license are valid and up-to-date. Unlicensed vendors should be avoided.

If this information is not readily available for the vendors you are researching, don’t hesitate to ask for it. Vendors should be happy to provide you with any reasonable information you are looking for in order to secure your business. If a vendor seems hesitant or refuses, it’s a red flag. If you’re finding it difficult to research to this extent on your own, take advantage of available vendor screening services that check criminal and financial backgrounds of vendors and their businesses.

Write Your Own Vendor Policy

To take it a step further, consider creating a list of policies and rules for your own company when it comes to vendors. Demonstrating that you’ve done your part when it comes to due diligence will go a long way should any issues arise. This kind of formal compliance policy, which you and your vendor should mutually agree upon, can include things like:

  • Expected timeline for reviewing any issues, providing a quote, and completing the work (if the estimate is accepted)
  • Preferred method of contact—email, phone, text, or other
  • Required documentation from the vendor, such as contact with tenants, photographs, paperwork, and invoices
  • Consequences for not meeting deadlines as outlined in the timeline
  • Formal anti-discrimination policies

You’re Ready. Now What?

Of course, online research is a quick and easy way to begin researching local vendors. If you find a vendor you’re interested in, a quick search on the Better Business Bureau website will provide you with more information and details on any filed complaints. Research the vendor’s website to learn more about where they are located and the services they provide, and utilize sites like Google or Yelp to check out any reviews. You’ll likely knock a few vendors off your list before you start making calls.

Beyond the internet, a great way to find qualified vendors is through recommendations and referrals. Your local landlord association should have a list of preferred vendors posted online. An association event can connect you with other property owners who can give word of mouth recommendations for vendors. Once you’ve created a list of potential vendors you’re interested in, you can schedule a quick interview over the phone or in person to see if it’s going to be a good fit for your business.

Properly screening potential vendors is time-consuming, but it cannot be overlooked because of the potential consequences. Vendor screening should be included as part of your standard operating procedures as a rental business, and implemented to increase your company’s value by providing an established service to tenants and owners. Vendor compliance does not assure a vendor’s quality of work or ethics, but it does protect your business from liability. In the end, you’ll have a reliable group of people you can trust when an emergency or other situation arises at your rental property.

What’s your policy for screening vendors? Any tips you’d add?

Comment below!

Aside from being a landlord and real estate investor himself, Nathan founded Rentec Direct, a software company that serves the rental industry. Today he works with over 13,000 landlords and property managers by providing them automation software and education to effectively manage their rentals.

    Christopher Smith Investor from brentwood, california
    Replied 7 months ago
    Good points emphasizing the liability aspects of property management. So many folks erroneously think that property management entails little more than cashing checks and clearing clogs. They couldn’t possibly be more wrong. Beyond a whole spectrum of PM operational duties none of which I want to do or am even capable of doing well, is the liability mitigation element of effective property management. Capable and competent property management should be your best first line of defense against legal liability issues. In the final analysis, this aspect of PM may bring greater value added to your operations than the entire portfolio of other activities that a solid PM provides. Top flight property management can greatly lessen the need for awkward, opaque and expensive Rube Goldberg like legal entity structures that are being relentlessly pushed by the many rather dubious document mill operators that have sprung up in the last 10 years.
    Chuck Glover
    Replied 7 months ago
    Great that you include doing your own groundwork, setting expectations in advance. A rule similar to the real estate rule, “location, location, location” is “document, document, document.” Thanks for this article on a needed subject.