Rehab by a management company or a contractor?

Question

About the rehab step, it is commonly advised to work with a contractor but get advises from our property manager on the scope of works.
But many property management companies also offer rehab services. I'm wondering if it's better to find a contractor by myself or let the management company do it. Shouldn't the management company know better what repairs/upgrades have better return in the local market?

Appreciate if anyone can share your thoughts on this.

John Chong · Answer

I would reach out to both to see what they offer along with pricing. It also depends on the size of the team/operations and your scope.

Jeff Roth · Answer

Hi-

All three property management companies I use are smaller but have their own in-house maintenance people.

I would ask on blogs like this for property manager referrals or Facebook groups for investors in your area.

To your success!

Wenlong Zhao · Answer

Are your property managers small or big? My PMC is kind of big and has in house rehab team. I found the work done last time just ok but expensive. What are your advices to find new PMC? Thanks

Wenlong Zhao · Answer

Thanks for the reply. But for a Rehab in BRRRR method kind of job. Would you recommend finding a a contractor your own? It just seems like there are too many management companies provide rehab service right now.

Jeff Roth · Answer

Hi Wenlong-

This is a great question.

I have three property managers I work with in Michigan in different areas.

All of them do rehab services and I let them until I find I reason not to which has only happened once and mostly due to the contractor they selected and not workers from the management company.

I like real estate being mostly passive and if I am managing contractors it becomes active very, very quickly.

To your success!

Michael Smythe · Answer

Your PMC should have a better idea of the scope of work needed to "Maintain to the Neighborhood" and not over improve a rental property.

Michael Smythe · Answer

Your biggest challenge will be "Maintaining to the Neighborhood" so you don't kill your ROI.

A PMC is better equipped to determine that, versus a contractor who usually just wants to max out their scope of work at a location.

Eliott Elias · Answer

It depends on the extent of the rehab. My rule of thumb is, if the job costs less than $300, let the property manager handle it.

Rehab by a management company or a contractor?

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