As a real estate investor, you’ll need a contractor at some point for your rental property. Maybe you’ll buy something that needs a full rehab before it’s ready for the rental market. You might find yourself wanting to renovate a kitchen or add a bedroom in order to increase what you’re able to earn. Sometimes, a contractor is needed to manage comprehensive repairs due to an accident or a disaster.
Most investors have experience finding a plumber or a roofer from time to time, but what are you really looking for when you need a contractor?
You’re looking for reliability, a great reputation, lots of experience, and value.
This is a fact that a lot of owners are struggling with: prices are going up, and so is demand. Most of the contractors we know are busier than ever, and the cost of materials and labor are rising along with prices for just about everything else.
What does this mean for you, as a residential real estate investor?
It means you need a good contractor you can trust; someone who will be available to you and committed to keeping prices competitive.
If you don’t already have a great relationship in place with a contractor, how do you know where to find someone?
We recommend that you start by asking for referrals. As local Philadelphia property managers, we work with contractors and vendors all the time. We’re happy to partner with you in seeking the best professional for your property.
In the meantime, we wanted to share a handy list of questions you should be asking any contractor that you’re thinking about hiring.
Are You Licensed and Insured?
This is a non-negotiable item on your checklist of what you’re looking for in a contractor. You need to work with licensed professionals who carry liability and worker’s compensation insurance.
It’s an important distinction and something you have to look for. In Pennsylvania, there’s no state law that requires a license for contractors. They simply need to register with the attorney general’s office. Philadelphia, however, requires a contractor license for anyone doing demolitions, constructions, or repairs. New Jersey does require a Home Repair Contractor License. You can ask for proof of licensure and verify that the contractor you’re considering has the required licensure.
Insurance is just as important. If you hire someone without adequate insurance, you could find yourself liable for any injury that occurs to workers or others while your property is being repaired or renovated. You don’t want an unlicensed, uninsured worker falling off a ladder and breaking some bones. The exposure to you – because it happened on your property – is huge.
How Many Years Have You Worked in Your Field?
Experience is important, and you want to know that the contractor you hire has managed projects similar to what you need before. Talk about areas of expertise, and where they need to rely on the help of others. Ask about how they handle their business operations. This will tell you if your business values align and if you think you’ll work well together.
How do you Stay up to Date on your Profession?
Things change frequently. Laws and best practices are always evolving. You need to know your contractor is smart and understands the industry.
How do you Manage Subcontractors?
The contractor you ultimately hire will likely need to work with subcontractors to get everything done. For example, a kitchen remodel could require electricians, plumbers, someone who understands flooring, and a drywall installer. Ask how those subcontractors are chosen and whether the same people will be coming to your property every day or if there are different subcontractors brought in throughout the project.
How do you Stand by Your Work?
Ask whether warranties are offered and whether you can ask for things to be redone or touched up if they’re not what you expected. You’ll also need to know how they manage to catch up when work falls behind and deadlines are missed. Do they work in the rain if most of what they’re doing is outdoors?
Always ask how a contractor handles permits, disputes, and disruptions.
Questions about the Specific Needs of your Philadelphia Investment Property
All of those questions we recommended that you start with are about their general knowledge, experience, and how they do business. Once you’ve established that you’re talking with a contractor who is dependable and professional, you’ll need to ask some questions about how they will handle the project you need them to complete.
Talk about your property and the specific results you’re looking for. When you need help installing a new bathroom, you don’t really need to know much about their roofing experience. Ask them questions that are focused on the project you’re proposing, and be open to their suggestions and plans.
Here’s what you might want to know:
- What kind of projects have you done like this? Do you have samples you can show me, or are there references or testimonials I can read?
- Will you provide a quote? Is that quote estimated or fixed? Is it itemized? Are you willing to negotiate any parts of what you’re charging?
- What is the realistic timeline for this project?
- Can you apply for and obtain the appropriate permits?
These questions will allow you to get to know the contractors you’re interviewing. You’ll have a way to understand how they do business and what they can do for you in terms of the work you need at your rental property. Always measure the scope of work against the cost of the project as well, and make sure you’re getting the value you expect.
Hiring a contractor can be complicated if you’re not prepared. You don’t want to go into this relationship blindly, and it’s always a good idea to do some general research online before reaching out to the contractors you want to speak with. We can help you with this process. Contact our team at TCS Management and let us know what you need for your investment property.
TCS Management is a full service property management company headquartered in Philadelphia, Pennsylvania, also serving Harrisburg, PA, Cherry Hill, NJ, Wilmington, Delaware and the surrounding areas. We focus on single-family and multifamily residential property management of homes, condos, townhomes, and apartment buildings.