Repair quotes by property manager seem extremely high

43 Replies

Hi,

We own a few single-family properties in the Phoenix area and they are all managed by the same property manager for many years now.

Since these houses aged a little bit and have normal wear and tear it's time to make some larger repairs, such as replacing rotted siding panels, fascia/soffit boards,  support columns in the patio, fixture replacements etc...

For years our property manager pretty much handled all of this, but it seems to me that the quotes we've been getting recently are overblown. I typically demand that the invoices that are forwarded to us by the PM's contractors are broken down into labor and materials, and based on my estimates they typically charge a labor price that would be equivalent to around $90-$100 an hour.

I would like to ask the people here who have experience with rehab or construction in Phoenix, what is a normal price to pay (per hour / per day) for a general handyman that is not necessarily specialized in anything structural or electric / plumbing. I'm mainly talking about routine maintenance and minor tasks like painting, replacing boards, caulking, replacing fixtures etc...

Also, I would like to get your opinion if you think that a licensed contractor is required for these smaller tasks, or should I  go with a cheaper contractor that is not necessarily licensed?

I do however want to point out that our PM only uses licensed contractors, which is understandable because she has to cover herself in case there is an issue. This creates some situations where a licensed roofing company will end up taking care of a fascia board replacement and painting, which can be done by someone else for probably much less.

Thank you very much in advance to anyone who is willing to share some of his/her experience or knowledge!

Contractors generally dont bid by the hour , plus materials . We bid the job .  Thats what you are paying for , the job .  You say based on your estimates they are charging around $100 per hour . Now did you factor in the trip to go look at the job and figure out what needs to be done , then the time to go to the supply house and pick up supplies and drive to the job . If there is 2 men on the job that cuts it in half . 

Then throw in workmans comp, liability insurance and all the other aspects of running a business . What you are being charged is fair.

You can always find someone cheaper , uninsured , no license . But lawyers go after those with "bigger pockets"

Hi Matthew,

Thank you very much for your reply.

Of course I am aware that there is additional overhead such as going to the property to give an estimate, picking up supplies and more... my estimates were based on what I believe it would have taken me personally to fix the issue if I was there physically, now keep in mind that I am not a professional contractor and I don't have the professional tools for some of these jobs, but this is what it would have taken me personally to do it with the little experience and knowledge in construction that I do have. I personally fix stuff like that in my own house all the time.

Many contractors like to bid per job, which is understandable, because at the end of the day they do need to get the job completed, regardless of how many hours it takes them. However, from my experience contractors that only bid per job or per line item in the task list that I give them charge way too much, and they round up everything to the half an hour or more. So for an example replacing a few electric wall plates they will charge 1 hour of labor, when in fact it should take closer to 10 minutes with a manual screwdriver. Now when I give them a task list of 5 to 10 items these all add up very quickly. And that's exactly what I am trying to avoid.

Correct me if I'm wrong, you are saying that it is normal for a contractor/handyman to charge around $100/hr for simple repair jobs?

I am not calling them up to come and replace 1 fixture that takes 20 minutes and pay them $25, I'm talking about giving them enough work that should take 1 man around 1-1.5 days (8-12 hours of work), and they give me a quote of $1000 for labor. Maybe I'm in the wrong business :)

@Roi C.  You may be  in the wrong business .  Thats around where I would be before materials . Thats why I am a contractor , its a rather good living . 

Grass cutting with 2 guys do about $900 a day

Plumber replaces 2 hot water heaters a day $2300 

Electrician hangs 4 ceiling fans  at $ 250 a pop a day .

HVAC guy charges 6 AC units a day   $ 1800 

Ever notice contractors driving around in new 3/4 ton 4 wheel drive crew cab  DIESEL pickups ?   These are $70,000 trucks .   

Good contractors make real good money 

Thanks for the input.

These numbers look pretty good for the contractor that's doing the job, I doubt however that any investor would be willing to pay these prices. 
I understand that retail customers who are not willing to do any research or price comparison will pay more for a turnkey solution that will just get the issue fixed without any hassle. When you own properties that are leased for $1000-$1800 a month you simply cannot pay so much for these type of repairs.
All the best :)

Originally posted by @Roi C. :

Thanks for the input.

These numbers look pretty good for the contractor that's doing the job, I doubt however that any investor would be willing to pay these prices. 
I understand that retail customers who are not willing to do any research or price comparison will pay more for a turnkey solution that will just get the issue fixed without any hassle. When you own properties that are leased for $1000-$1800 a month you simply cannot pay so much for these type of repairs.
All the best :)

 Everyone wants their contractor to do 3 things.

Good work.

Cheap work.

Fast work.

A good contractor will give you 1 of the 3. 

A great contractor will give you 2 of the 3. 

No contractor will give you all 3.

Originally posted by @Roi C. :

Hi,

We own a few single-family properties in the Phoenix area and they are all managed by the same property manager for many years now.

Since these houses aged a little bit and have normal wear and tear it's time to make some larger repairs, such as replacing rotted siding panels, fascia/soffit boards,  support columns in the patio, fixture replacements etc...

For years our property manager pretty much handled all of this, but it seems to me that the quotes we've been getting recently are overblown. I typically demand that the invoices that are forwarded to us by the PM's contractors are broken down into labor and materials, and based on my estimates they typically charge a labor price that would be equivalent to around $90-$100 an hour.

I would like to ask the people here who have experience with rehab or construction in Phoenix, what is a normal price to pay (per hour / per day) for a general handyman that is not necessarily specialized in anything structural or electric / plumbing. I'm mainly talking about routine maintenance and minor tasks like painting, replacing boards, caulking, replacing fixtures etc...

Also, I would like to get your opinion if you think that a licensed contractor is required for these smaller tasks, or should I  go with a cheaper contractor that is not necessarily licensed?

I do however want to point out that our PM only uses licensed contractors, which is understandable because she has to cover herself in case there is an issue. This creates some situations where a licensed roofing company will end up taking care of a fascia board replacement and painting, which can be done by someone else for probably much less.

Thank you very much in advance to anyone who is willing to share some of his/her experience or knowledge!

“Licensed”? Na. I used to post on Craigslist. I don’t need someone “licensed” to do 99% of work that’s needed. Even when it’s stuff that needs licensed I try to get my guys to do most of the work, then a licensed person to do the smaller % of it. 

You need to have a heart to heart with your PM. If she insists on high dollar labor for every issue you may need to find a new PM

Originally posted by @Matthew Paul :

@Roi C.  You may be  in the wrong business .  Thats around where I would be before materials . Thats why I am a contractor , its a rather good living . 

Grass cutting with 2 guys do about $900 a day

Plumber replaces 2 hot water heaters a day $2300 

Electrician hangs 4 ceiling fans  at $ 250 a pop a day .

HVAC guy charges 6 AC units a day   $ 1800 

Ever notice contractors driving around in new 3/4 ton 4 wheel drive crew cab  DIESEL pickups ?   These are $70,000 trucks .   

Good contractors make real good money 

 I’d laugh till I cried if I got a bid even 1/2 those prices. I can see $250 for a ceiling fan for a retail home owner calling someone to do one. But a contractor who’s doing several as part of a bunch of work? First they could do more than 4 in a day.  But even if they couldn’t, I don’t know any handyman (which is the work discussed) making $1000 a day in labor. That’s insane. 

My guys could easily install 4 fans in a day and they’re paid about $20/hr. So if it took them 8 hours to install 4 that would be $40 each. 

But hey man. If you can find people who will pay that to you - congrats 

@Cody L. got to remember , it takes the same amount of time and energy to hang a ceiling fan for an investor as it does for a homeowner .  

As a licensed contractor my price is the SAME for homeowner and investor ,therre is no reason to give a any discount .

Licensed contractors generally speaking do better work , they have a license they can lose . 

Honestly if someone calls me for work and says they are an investor , or landlord , those calls are not as important as the homeowner calls . 

This post has been removed.

The true cost of 3rd party management is not fees...it's management of occupancy and maintenance costs.  And many 3rd party management companies use reliable licensed contractors who they trust and don't have to manage...but are not inexpensive.

You should always get a few quotes for "check and balance".  Labor is typically equal to the product cost then add on profit and overhead to it as a minimum.

Couple quick thoughts here.

Many property managers add a percentage on top of the contractors rate as a revenue source. So if something costs $100 to the contractor, you get billed $110 for instance.

The other thing is in some states, agents and property managers are required by law to only use licensed contractors. In Maryland, I actually have to check a contractors license status, keep a log of me checking it, before I can even refer a contractor to someone. If I even refer someone and my records are audited and I didnt check the status, its a $3000 fine to me.

This is a good thread, but it simply comes down to what @James Wise said.

My own 2 cents on this is that the property manager should have some "handymen" on file that can take care of the smaller stuff for a more reasonable fee. Major stuff should always be handled by a trusted professional. It may cost more, but the work is going to be done right. 

Maybe a closer eye on the property can avoid some of these costs in the future, in my opinion rotting panels and support columns is not something that happens overnight, and is not due to normal wear and tear.

Handyman is slang for unlicensed contractor .

You have to remember management companies are for profit businesses , They arent going to get 3 bids for the little jobs under $5000 , too much time meeting guys to bid , they pick up the phone and call their regular contractor and ask 2 questions , how much ? and how fast can you get on it ? 

They are not shopping price to try and save the landlord a couple hundred . 

In Phoenix I pay: 

Paint $1/sq ft

18" tile on diagonal $4/sq ft

Garbage disposal $60

Ceiling fan $40

You can get a second quote if your PM has a lock box at the house.  You may be able to find help thru a good realtor.

Some PMs do markups on invoices anywhere from 5-15%. I spoke with a PM in Silicon Valley that was doing 20% markups on their contractor invoices. Check on that. 

The hourly rate you quoted isn't off base for a good contractor. It is a reasonable price. However, it may be that your PM is sending licensed contractors to do work that a handyman should be doing. You don't need a licensed contractor to touch up paint or nail holes etc. 

Originally posted by @Matthew Paul :

@Cody L. got to remember , it takes the same amount of time and energy to hang a ceiling fan for an investor as it does for a homeowner .  

As a licensed contractor my price is the SAME for homeowner and investor ,therre is no reason to give a any discount .

Licensed contractors generally speaking do better work , they have a license they can lose . 

Honestly if someone calls me for work and says they are an investor , or landlord , those calls are not as important as the homeowner calls . 

Didn't mean to suggest that it takes you a different amount of time or that you'd charge a different amount.  I'm saying a home owner who doesn't have that type of work often that's just calling someone in the yellow pages is going to pay a lot more than an investors who does this all the time, has a collection of guys who can put in a fan with their eyes closed for $50 etc. 


I know this as I'm often that "Sucker" home owner because if something happens in my PERSONAL home, my wife will call whatever contractor she can, and what they charge is what we pay.  I'm powerless to deal with it because I'd rather pay a few hundred extra bucks then have a pissed off wife (and all my workers are in Houston -- I'm in San Diego).  But for my work done on my portfolio in Houston?  Yeah, no way I'm paying $250 to hang a fan.  I just did a rehab on a small'ish 32 unit where we replaced every bit of -- well -- everything.  If I paid those rates I'd be homeless. 

Originally posted by @Derek Janssen :

In Phoenix I pay: 

Paint $1/sq ft

18" tile on diagonal $4/sq ft

Garbage disposal $60

Ceiling fan $40

You can get a second quote if your PM has a lock box at the house.  You may be able to find help thru a good realtor.

 $4/sf for tile install?  I normally pay $1/sf, maybe up to $2/sf.   I have a 46 unit building that has small 500SF studios.  I paid a husband/wife couple $500/unit to install tile.  Does your $4sf include thinset and grout and all that?   If so maybe that's a bit better but if you're supplying EVERYTHING, then that's quite expensive.  For 1000SF place, that would be $4k and would take 2 guys maybe 2 days. 

Originally posted by @Cody L. :
Originally posted by @Matthew Paul:

@Cody L. got to remember , it takes the same amount of time and energy to hang a ceiling fan for an investor as it does for a homeowner .  

As a licensed contractor my price is the SAME for homeowner and investor ,therre is no reason to give a any discount .

Licensed contractors generally speaking do better work , they have a license they can lose . 

Honestly if someone calls me for work and says they are an investor , or landlord , those calls are not as important as the homeowner calls . 

Didn't mean to suggest that it takes you a different amount of time or that you'd charge a different amount.  I'm saying a home owner who doesn't have that type of work often that's just calling someone in the yellow pages is going to pay a lot more than an investors who does this all the time, has a collection of guys who can put in a fan with their eyes closed for $50 etc. 


I know this as I'm often that "Sucker" home owner because if something happens in my PERSONAL home, my wife will call whatever contractor she can, and what they charge is what we pay.  I'm powerless to deal with it because I'd rather pay a few hundred extra bucks then have a pissed off wife (and all my workers are in Houston -- I'm in San Diego).  But for my work done on my portfolio in Houston?  Yeah, no way I'm paying $250 to hang a fan.  I just did a rehab on a small'ish 32 unit where we replaced every bit of -- well -- everything.  If I paid those rates I'd be homeless. 

There is a difference between us , you are talking production work . I was talking about service call , in and out . Like the ceiling fans , thats 3 or 4 different stops .  The average investor  has 2 , 3 or 4 properties ,  and a flipper who does 1 or 2 houses a year . They are no different than " Harry homeowner ' there is no economics of scale to a contractor

Originally posted by @Cody L. :
Originally posted by @Derek Janssen:

In Phoenix I pay: 

Paint $1/sq ft

18" tile on diagonal $4/sq ft

Garbage disposal $60

Ceiling fan $40

You can get a second quote if your PM has a lock box at the house.  You may be able to find help thru a good realtor.

 $4/sf for tile install?  I normally pay $1/sf, maybe up to $2/sf.   I have a 46 unit building that has small 500SF studios.  I paid a husband/wife couple $500/unit to install tile.  Does your $4sf include thinset and grout and all that?   If so maybe that's a bit better but if you're supplying EVERYTHING, then that's quite expensive.  For 1000SF place, that would be $4k and would take 2 guys maybe 2 days. 

 All in, set diagonal, thin set, grout, and removal of existing flooring.

@Roi C. I don't think anybody has truly answered this:  $45/hr.  That's a general handyman unlicensed for whatever scope you desire in Phoenix.  

$45/hr is ballpark.

Good thread. So what do you do when your PM also owns the maintenance company (as mine does)? My PM is generally good, and very responsive, but I always believe there are more maintenance items on every turnover than their really need to be, and they cost a bit more than they should, but not being on-site, I have no way to verify it. 

@Roi C. Phoenix is experiencing a bit of a labor shortage in the middle of a very strong market which has helped increase costs and increase time on almost all projects.  To say the good contractors are busy is an understatement.

I believe its reasonable to ask your PM to get additional quotes for work to help verify the proposal is at current market.  This could/should be stipulated in your management agreement.

Most of the rates that have been quoted in this thread appear high for the Phoenix market... with the exception of @Derek Janssen   his rates are similar to what I've experienced. ($3.83 SF Labor & Materials for Tile install)

Your Management company may have a policy that they only use licensed contractors. This is a good policy but it generally only protects them. It isn't a requirement in AZ to only use licensed contractors.  You can use an unlicensed Handyman for projects up to $700.  If you use the same Handyman multiple times in a year and his 1099 is much more than $700 you probably should consider going with a licensed contractor... or better, that Handyman should get licensed, it's not really that difficult.

Rehab and Repair are almost always potentially contentious issues between the Investor and the PM and even if the PM isn't marking up Rehab costs it sometimes doesn't feel like they have the Investors best interests in mind.  Based on your comments, it sounds like you've had a long, good relationship with your PM.  If I were in your shoes, I would lean towards a Trust but Verify position.  If Verify didn't support the proposals being sent me I would make a big shift and start over.

Best of Luck!

Originally posted by @Derek Janssen :
Originally posted by @Cody L.:
Originally posted by @Derek Janssen:

In Phoenix I pay: 

Paint $1/sq ft

18" tile on diagonal $4/sq ft

Garbage disposal $60

Ceiling fan $40

You can get a second quote if your PM has a lock box at the house.  You may be able to find help thru a good realtor.

 $4/sf for tile install?  I normally pay $1/sf, maybe up to $2/sf.   I have a 46 unit building that has small 500SF studios.  I paid a husband/wife couple $500/unit to install tile.  Does your $4sf include thinset and grout and all that?   If so maybe that's a bit better but if you're supplying EVERYTHING, then that's quite expensive.  For 1000SF place, that would be $4k and would take 2 guys maybe 2 days. 

 All in, set diagonal, thin set, grout, and removal of existing flooring.

 Gotcha. 

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