10 Ways | How to Find a Contractor and FIX YOUR PROPERTIES
Repairs and maintenance are one of the biggest hassles in the world of real estate, and not just because of the cost. Obviously, repairs and maintenance cost you money, but contractors can just make it worse!
Contractor doesn’t show up on time, contractor doesn’t call you back, contractor isn’t where he said he was going to be, contractor outsourced work to the wrong people. You hear it all.
It is important to choose a good contractor, rather than a cheap one. It is easy to think that the cheaper deal is a better deal as long as it gets done, but this couldn’t be further from the truth.
By paying a lower price up-front, you are putting yourself at risk for shoddy work. This is common, because… well, there’s a reason that the cheap contractor is the cheap contractor. If they do a bad job, there is a good chance you will need to replace as much as you did before, if not MORE.
Then it will take even longer to get your property ready to move in, which is now disrupting your cash flow. Now, you have to pay the mortgage for another month. It hurts!
So, what’s the solution? You need to learn how to find a good contractor.
If you’re not sure how, follow these steps to learn how to find a contractor, and then you can be a lot more confident in your choice.
How to Find a Contractor
1. Be Proactive
If you wait until you need a contractor to find a contractor, you’ve already lost the battle.
Finding a good contractor to fix and maintain your rental properties can be a time-consuming task. It should be a time-consuming task, because the contractor is one of the most important members of your real estate team.
You need to go out and ask people about local contractors. You need to ask people in your neighborhood who they use, or who their landlord uses, or who their brother in-law uses.
If you are proactive, then when something goes wrong, you will have your favorite contractor on speed dial.
If you are reactive, then when something goes wrong, you’ll call Contractor #1, and he’ll ask you to leave a message. You’ll call Contractor #2, who will say he is unavailable for the next month. You’ll call Contractor #3, who says he doesn’t know how to work on it, so you’ll call Contractor $4, who sets an appointment and never shows up. Then you’ll call Contractor #5, who does the job, but turns out two months later he did shoddy work and it needs repaired again.
See what I mean? One of the biggest complaints from real estate investors is how hard it is to find a good contractor when they need one. It important to find one before you need them, not during.
2. Hire for Cost
Price and cost are two separate things. If you buy a car for $1,000 that broke down on 3 different occasions, and ended up costing you $1,500 for repairs, is it worth it if you could have bought a dependable car for $2,000?
Same thing applies with contractors. Some will be more expensive, but the quality of the work is unmatched, and you won’t have to worry about what they fixed for years to come.
It can be easy to hire based on who is giving the best rates, but have you ever wondered why they are so cheap compared to everyone else?
“Throw out the lowball bid. This contractor is probably cutting corners, or worse, desperate for work.” -Tom Silva
3. Ask for Referrals
Something that is extremely simple, extremely helpful, but definitely overlooked.
Talking to others about who they recommend can be extremely beneficial, especially if you don’t know many contractors in the area.
You can talk to friends, neighbors, and even contractors. But go beyond that. Talk to real estate agents, brokers, and other investors. These people work with contractors on a regular basis, and would be the most likely option to point you in the right direction.
4. Check References
Ask previous customers of your potential contractor. Oftentimes, the contractor themself will give you references from past jobs, and then you can contact the homeowner to see how he did.
You should ask these types of questions:
- Did the contractor show up on time?
- Did the contractor stay within budget? If not, why?
- Did the contractor do exactly what they said they were going to do?
- Did the contractor fix everything that you told them to fix?
- Did the contractor bring any extra fees into the equation?
- Were you satisfied with the overall result of the contractor’s work?
It is important to ask previous customers, because they are most likely to give you the most detailed answer. This goes when you are screening tenants, this goes when you are picking a contractor as well.
5. 6:00 Home Depot/Lowes Trick
This trick is from J Scott, author of The Book on Flipping Houses.
Go to your local hardware store at 6:00 am, and meet the contractors that are getting supplies. If there are contractors there, (there probably will be) then this is a great sign.
The contractors that are at a hardware store at 6:00 are getting the supplies they need before they head out to work, and they are up early so that they can take advantage of all of the daylight they can get.
These are great things to see for a potential contractor.
6. Ask Employees
If you need plumbing work done, head to a plumbing supply store and ask the employees for their opinions on good plumbers.
If you need roofing work done, head to a roofing supply store and ask the employees for their opinions on good roofers.
This goes for any job that you may need done on your property. The employees are around these people every day, and will most likely be able to recommend the best that they have seen.
7. Craiglist Ad Test
Place an ad looking for a contractor or handyman in a specific industry, (plumbing, electrical, carpentry, etc.) and wait for people to respond.
Hire as many as you want, and give them a cheap little task to do. See how they perform. Do they know what they’re talking about? Do they show up on time? Do they respond quickly?
You can use this test to build relationships with potential contractors and find which one is the best for you.
Competition is one of the biggest motivators in jobs today. It is what pushes new products on the line, it breeds innovation.
If a company has a moat around it that can’t be beat, and no other company even tries to compete and goes towards other industries, there will be a lot less competition.
If a company has to prove that it has the best type of product, versus 5 other companies that have produced something similar, there will be a lot more competition.
Which do you think would put more effort into their product? The one with competition, or the one that has no incentive to?
You can hire multiple contractors, and let them know that there are other contractors available. They will be more likely to deliver you quality at a good price, because nothing beats work.
9. Recommendations from Contractors
Once you find a contractor you like, ask them about other contractors. Ask a carpenter who his favorite electrician is. Ask a painter who his favorite drywall specialist is.
If you like one contractor, then you will be a lot more inclined to like another contractor that your contractor recommended. It’s a small world.
10. Be Clear
Explain exactly what you want in a clear, detailed, manner. Oftentimes, a contractor is “bad” because they didn’t clearly understand the instruction, because the homeowner gave bad instructions.
“Contractors are not mind readers. If you give contractors a clear list of expectations, you will find your task much easier.” -Martin Scherer
How to Find a Contractor
Most of the information from this article came from The Book on Rental Property Investing, widely considered the greatest overall book on rental property investing.
In this book, author Brandon Turner describes many things, one of them being how to find a contractor.
Brandon Turner is the author of multiple best-selling books, and is the VP of Growth for BiggerPockets, the largest community of real estate investors in the country. He is also a real estate investor, who has amassed a portfolio of around 300 rental units since starting in 2007.