Saving Money At Any Cost – Why it’s Dumb

October 25th, 2014 · 2 Comments · Commercial Property, Contractors, Property Management, Rental Property

Dumb and Dumber (1994)

Here’s the problem with constantly asking contractors for lower prices. Someone will say yes and they will give you your money’s worth.

Here’s the other problem. You own the house. and. the. crappy. illegal. building. code. breaking. “renovations”.

You are not saving money, you are just kicking the can down the road.

I’m currently having a major issue with a renovator who managed to mess up a basement apartment that has actually been vacant for over a year. I got some quotes from decent contractors I have used before. They do nice work. The owner managed to find their own contractor who had a much lower price. Shortly after hiring said contractor the owner left the country. It was left to me to approve the final work and payment for the work.

It was awful. Now it’s my problem. Except fixing other contractors work is not something anyone wants to do for a reasonable price. So the apartment sits empty for another 2 months while we wait to find a price cheap enough to repair the mistakes of the previous “cheap” contractor.

Heating Adventures

That’s ok, because as it turned out, the heat doesn’t work. I send out my usual contractor (another landlord I work for) and as it turns out the hot water tank is being used as a boiler and also supplying the hot water. This is the result of a previous cost saving initiative. I called the contractor who did the initial installation and they do not want to come back because apparently they have come back every year and now they don’t want to.  According to the current guy this type of system will work for a few years then plug up.

This is also now my problem. Lucky me.

Meanwhile back at the ranch, the owner is telling me that they will sell the property this spring because it doesn’t cash flow. I call this phenomenon starving the goose that lays the golden eggs. There is nothing wrong with the property.

Working For The Contractor But Not Being Paid

The other day, I get a phone call from another owner. She’s headed out to pick up materials for her contractors. She works full time and has a couple kids and now she’s picking up materials. I told her to hire people who pick up their own materials. Get the wrong thing and the wrong amount and it’s your fault. Push the responsibility to the people it belongs to. She’s not getting a discount or being paid to do their work. Shopping and picking up materials is contractors work.

In most cases I install a lock box and the contractors go and let themselves in and out. The contractors I use are not crackheads from Kijiji. There is not a cost savings on the planet that is great enough for me to micromanage a project like painting a basement apartment. I’m not picking up the paint, standing over them, telling them how to paint, cleaning up their drips and generally putting up with bullshit.

Neither Should You. Are you sick of problems with contractors? Tell me your horror story in the comments…

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2 Comments so far ↓

  • George

    I had a fellow right an estimate to renovate my basement on the inside of a cigarette package. He was the cheapest offer, obviously. Wow, I really jumped at that opportunity. At least it was a written offer though. Looked elsewhere. Seriously, you get what you paid for. Oddly, the most expensive guy is underused in town. HIs framing on the basement had better cuts than a lot of the finishing work in the main part of our 3 year old house (at the time)

    • Rachelle

      What amazes me about those guys is that they never seem to be moving fast or sweating or rushing. At the end of day there is a giant mountain of work completed. The guys who rush and look busy well you think they are working hard but at the end of the day the guy who is experienced and is making even movement count, is way far ahead and your house won’t fall down around you.