The Secret to Managing and Keeping Quality Vendors
Whether your rental property is just two miles away or is located in another state, you need a quality vendor team you can rely on when your tenant reports a leaky toilet or a blown down fence. Your property's value is dependent on keeping it well maintained and that includes managing the vendors who repair it. If you're unable to keep a skilled vendor on your team, it may be because you spend too much time haggling over price or that your pay schedule is too slow. If your maintenance costs are sky high, you are probably using a specialist for a job when a good generalist will do. A carefully crafted team of vendors will not only save you time and money, but will also help guarantee something all owners want - good tenants who want to stay. Here are a few tips on how to manage your team of vendors to get great results.
Use Licensed Vendors
Sure, you can get away with using an unlicensed vendor for some minor jobs, but you may be substituting quality for shoddy work, resulting in unsatisfied tenants. Moreover, quality vendors are licensed and are usually bonded and insured for workman's compensation, liability and property damage. Your tenants trust you to place vendors who are not only knowledgeable about the repair but they are also allowing them into their home without fear of harm or having possessions stolen. Using quality, licensed vendors also offers you some level of protection from being sued should they get injured while doing work on your property. The only upside of using unlicensed vendors is that they can't file a mechanic's lien against your property if you refuse to pay them. However, if their work must be inspected and repaired by a professional, you will end up spending more money in the end.
Determine Needs of the Job
You can spend a lot of money on repairs if you send out the wrong person for the job. When reviewing the tenant complaint, determine what type of vendor to use. For example, a good handyman should be able to inspect and replace a worn out wax ring on a bathroom toilet or repair a clogged garbage disposal. Yet if there is a leak inside a bathroom wall, or water pooling around the water heater, hire a plumber. The same rule applies when doing rehab work on the property. A handyman carpenter can lay down baseboards and trim in molding but don't rely on this generalist to install the hardwood floors. If you do, you may find yourself having to rip out a newly installed floor because the sub flooring underneath was not leveled correctly prior to installation.
Ask for Proof of Work
Whenever you send a vendor to do a job, ask that they take a photo showing proof the work was completed. You may have to request this be written into the estimate before you sign it. Smart phones and other electronic devices make this an easy request that takes only a minute. Be suspicious of any vendor who refuses to do a before and after photo of proof of work. If a property management company manages your property, make this part of your request and ask that they attach the photos to your file with the work order. A good, quality vendor will often provide an explanation of the problem with the picture or invoice and describe what was done to remedy it.
Avoid Being Cheap and Pay on Time
Quality vendors who are punctual and do good work are busy and they charge a good wage for their time. They will walk away from owners who haggle over price and are slow to pay. When you find a good handyman or specialist vendor, pay them a fair wage. There are other ways you can cut price. If you own more than one property, ask for a discount in return by giving them bulk service. For example, an HVAC contractor may agree to charge you a lower rate to do preventative maintenance service for all the air conditioning units in your eight unit apartment building. Consider teaming up with a group of rental owners in your local real estate investment club to create your own "Group-On" with a vendor that specializes in cleaning and repairing gutters.
Be prompt with payments. Prepare for unexpected repairs by setting aside a reserve fund for big expenses. You can offer vendors a partial down payment and pay the balance within 10 days.
A quality team of vendors can prolong the life of your property and save you money in the long run. Manage your team well and your reward will be a well-maintained property with happy tenants who will never want to leave.