The 7 Most Important Things To Remember When Working With Contractors
Real estate investors will constantly complain about the difficulties of dealing with a contractor. Whether it is the process of finding one that is reliable, organizing them before the project begins, or managing them throughout the rehab, investors have to be prepared for the basics of working with their contractor in order to have a successful partnership. Here are seven tips to get you started down the path of a better and easier time dealing with your future contractor.
1. Look Carefully Before You Hire
Just like any job you are hiring for, you’ll need to make sure you find someone that is both trustworthy and reliable. Ask other real estate investors for recommendations or go online and check out popular websites that specialize in reviewing businesses to see what comments have been made about the contractor you are looking to hire. Be diligent in your research before making that final decision so you are confident that who you are working with will not only get the job done, but done well.
2. Get Multiple Estimates
You don’t want to just take the first estimate you receive. When you find a list of potential contractors, allow them to walk the property and evaluate what work needs to be completed and how much they expect it to cost for both materials and labor. You should also confirm with them how long you want the project to take and see if they can finish the renovations in that timeframe.
3. Sign on the Dotted Line
Most businesses will require a contract, and your real estate investing business should be no different. Draft a contract for your contractor to sign that details what the job will entail and outlines the estimated cost for labor and materials and what date you want the project completed by. One of the most important pieces of this contract is making sure you solidify with your contractor an agreed-upon time for the renovations to be done by. Rehabs that go on too long will cost investors not only time but more money.
4. Prepare for the Repair
Get organized before the renovations begin by discussing with your contractor exactly what you want done. Give them a schedule and a detailed list of what you want them to complete during the course of the rehab. They can’t read your mind, so it will be up to you to make it clear to them what your expectations are for this renovation project.
5. Monitor the Money
Keep a close watch on the budget because that nice estimate your contractor initially provided you may slowly start to increase, and before you know it, you are paying more than you anticipated and cutting into your potential profits. You can choose to give your contractors the entire budget at the beginning of the project or provide money to them in installments so you can better control the costs.
6. Check In Often
Make unannounced visits to your investment property to make sure your contractor is completing the job properly. Being present and overseeing the renovations will help ensure that the project is finished in a timely manner and within budget.
7. A Job Well Done
Once the project is done, do a last minute walk-through and make sure everything is completed as you originally outlined before you finalize payments. If you are satisfied with the results, don’t hesitate to recommend your contractor to other investors as well.
What do you feel is the most important piece of advice when it comes to dealing with contractors? Let other investors know in the comments below!