I got a reader question the other day…
I can’t seem to find this subject on your blog.
I’m in need of some advice to get my place from the red to the black.
my 6 plex has been in the red for over 1 yr now.
How can I be smart to hire the right contractor/handyman to fix my place up and avoid being ripped off ?
Any advice you could give me would be extremely appreciated.
Thank you and have yourself a wonderful day.
How To Get Contractors…
This is one of the hardest part of property management. It doesn’t take a genius to open the Yellow Pages and call a few people to get some quotes. The problem is that you are going to pay retail prices for your contract work. If you own a building you can’t afford it. Every single month you have suites that turn over, you have to pay wholesale rates for your contract work.
Where Can You Find These Elusive Wholesale Contractors?
I have been known to call 20-30 people to find one that has decent prices and shows up after you give them the job. Showing up cannot be over emphasized because… lots of times when you get the price you want, job day starts and no one shows. Keep going.
Another good spot to find decently priced workers is other buildings. Any fair sized building will have regular trades. Not condo buildings, anyone who has ever paid maintenance fees can tell you that they don’t save money on operations. Look for medium sized buildings that are owned by private owners.
Licenses, Permits, Clearance Certificates
You can’t afford it. What you can afford is small owner operated companies that will make the trade off of price for regular work. These small companies can’t wait 90 days until you get your crap together with your accounting department. You’ll have to pay them when they are finished. If they have to order something expensive, like a furnace, you’ll likely have to pay that up front.
Try not to pay upfront for anything. Pay when they are done and not one second before for most jobs that need doing. This way they have an incentive to show up and finish. If they need materials, go buy them and get them delivered. Your decent honest tradesman should have some money to float the job. The guy who doesn’t have any money to buy 100 square feet of tile and supplies necessary to do his trade is likely to steal your tools and enjoy a beer party with his friends with your deposit.
No one is going to build your house and install a furnace for no money down so use your judgement. You friendly neighborhood handyman that can change taps should be able to buy them.
Don’t Give Away The Farm
Try people out on a small job, before giving them a big job if you can. Or if you need two suites done, show them one and let them do one before you give them the next. The last thing you want is some horrible hack screwing up your place. I’ve seen some so called handy men that should be charged for damages.
Just Keep Looking!
It’s frustrating as hell! I am going through this currently, eventually you’ll find that rare combination of acceptable quality/reliability/price. When you do make sure you get them their checks on time and treat them well.
Finally If It Isn’t Working…
So if quality is unacceptable and you are just hiring them for fear that you might find worse, start shopping when you aren’t desperate. It’s nice to have a pair and a spare if you can. So don’t just give your everloving devotion to one contractor. What if he gets hit by a bus? You have to produce so you need a back up plan.