Turning Red Ink to Black – Reader Question

July 7th, 2011 · 11 Comments · Contractors

If women don't find you handsome...
Creative Commons License photo credit: nosha

I got a reader question the other day…

Hi,

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.

Surprise Surprise!

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.

Any additional tips out there for how to find a handyman who won’t require raids on Fort Knox for payment?

Tags:

Get Your Free Landlord Documents Now! 

11 Comments so far ↓

  • ThatGuy

    Emphasis on ‘treat them well’ as this is a good outline of a likely lengthy process that you don’t want to keep doing.

  • CanuckLandlord

    Be very cautious when hiring someone who isn’t licensed or who doesn’t have workers compensation… if the worker gets injured, then the property owner is the one liable for their injury… and any other expenses that come up related to that injury. If said worker becomes permanently disabled… well, have fun with that.

    Just something to think about when you say that you can’t afford a licensed tradesperson with proper clearances.

    If you don’t plan on doing the repairs and maintenance yourself and don’t plan on learning how, then your should have accounted for those costly items when you were doing your due diligence before buying the property.

    • Rachelle

      It’s a risk most owners have to take…should have could have would have once you have the place and you have to choose between paying the mortgage and paying the premium trades, well the choice is clear.

  • CanuckLandlord

    Excellent point about hiring people for small jobs when you aren’t desperate. It helps to build a call list of various trades in your area. That way you can always get a check price to make sure the quotes you get are competitive.

    In construction you can only choose TWO of the following: Time, Money, Quality… that means you have to sacrifice one of the three on every job. If you only get one of the three from someone, then never use them again.

    • Rachelle

      Well I happen to disagree with this, I’ve hired people who are expensive and do crap work and hired people with inexpensive prices that are good.

      One thing to keep in mind as well, the average rental apartment is not the Taj Mahal either, so you have to temper your expectations as far as quality goes. I know people who have spent tens of thousands of $$$ on basements for example, with the expectation that they would get a great tenant in there. Or in the wrong area…

      • CanuckLandlord

        Like I said, you shouldn’t keep working with someone who doesn’t give you two of the three.

        I’m assuming you never worked with the expensive, low quality trades person again, right?

        I’m also assuming you kept your inexpensive, high quality trades person on speed dial.

        I never meant that you will never find the occasional gem who does excellent work and doesn’t charge too much (if you find them, be nice to them), but the norm in construction is you can only have two out of three.

        I agree that you should not be aiming for top dollar when doing repairs and maintenance on rental units (Quality). I always tell the trades I’m working with that we’re not building a Hilton here, so I need done on time (Time) and on Budget (Money).

        Handymen definitely come in, um, handy for tasks that do not require a licensed trade, but remember the old saying “jack of all trades, master of none”. If you ever encounter a handyman who does bad work, then you’ll realize why paying to have it done right the first time makes the most sense.

        I’d let a handyman replace a faucet or paint a wall, but there’s no way someone unlicensed is rewiring an apartment for me… My $0.02. YMMV.

  • New Zealand Property Management Software

    Nice article! Great post about Turning Red Ink to Black – Reader Question! Thank you for the info Rachelle.

  • Getting Blood From A Stone, or Proper Planning Isn’t Always Perfect | Canuck Landlord

    […] got myself involved in a discussion in the comments section of an article over at Landlord Rescue the other day and it gave me the inspiration to expand on it over here. The article began with a […]

  • Property Purchase Analysis Software

    Thank you for the Turning Red Ink to Black – Reader Question information. Congratulations again on a good job Rachelle.

  • Great Oak Reno

    I own a small office building ( 9 commercial spaces ) and i have been a contractor for the last 12 yrs. My clients are repeat clients because their commercial / residential property is treated as if it is my own.
    I agree with the general ideas that have been put forth in your article.
    Unfortunately, handyman, contractors etc, get a bad wrap due to the many losers who think money first instead of quality work first.
    If you have put forth the quality work, the money ( hopefully, if they don’t stiff you, yes it has happened to me! Even after the client admitted in court that she agreed to the contract and that she signed it willfully, my bank account is still short $14,000), will present itself.

    I Thank you for your time and place to rant!
    Enjoy reading all your info!

    • Rachelle

      Budget is the biggest problem…and yes contractors do get ripped off a lot. Not only that but they have a very difficult job because none of them have x-ray vision :) once the wall is opened up it’s like a barrel of monkeys in there, who knows what fun things are gonna be found.

Leave a comment