How To Find The Best Contractor For Your Business
By Paul Esajian on January 27, 2017
Every real estate investor needs a good contractor. Regardless if you focus on rehabs or rental properties there is a strong need for a quality contractor. In a perfect world your contractor will come from a referral of someone you trust. Even with a referral you still need to do your due diligence. Working with an unreliable contractor can not only cause delays in the process but can end up costing you money, or worse. The best contractors don’t necessarily offer the lowest price but are the most trustworthy. You have to be able to trust your contractor in handling your rehab project or working on a rental property. This starts with taking your time to ensure you have the right fit. Here are five ways to help find the best contractor for your business.
- Licensed/Insurance. There are several ways to find a contractor when you need one. The key is to develop a relationship before a problem presents itself. One of the first items you should find out is whether or not they are licensed and insured. Everyone in any business is focused on price. However there are times when price is truly not the most important thing. A contractor who promises the moon and vows to work 10-15% below the competition may be more trouble than they are worth. Without a license or insurance you open yourself up to potential litigation. If something goes wrong you have no leverage and no leg to stand on. Your contractor may do great work but without insurance the door is always open for potential problems. If your contractor gets injured on the job site the blame may eventually come back to you. A licensed contractor has put the time and effort in to know their craft. You may save a few dollars working with someone you find online but without a license you are just asking for trouble.
- Get Something In Writing. Running a business means protecting your assets. You always want to have as much protection with your rehabs or rental properties as possible. Only of the only ways of doing this is by getting as you can in writing. As you talk to prospective contractors you should not be afraid to ask how they conduct their business. Ask if they would be willing to put an estimate in writing and if so how it is delivered. Most professions are able to quickly generate an estimate and send it over via email. However, if your contractor claims that they only deal in verbal estimates because things always change during the project it can be seen as a red flag. In some cases verbal estimates can be binding but often times it will be your word against theirs. There are too many other contractors out there without having to rely on verbal contracts. If your contractor won’t put something in writing you need to move on to someone who will.
- Itemized Quotes. Getting a quote is not enough to feel comfortable. It is important you ask a potential contractor how specific they are with their quotes. If you are not comparing apples to apples with other contractors you won’t be able to fully understand the numbers. A good contractor has nothing to hide and should be able to stand behind whatever they quote. If a contractor claims that they don’t do things that way you really need to think about working with them. As we mentioned price is always a factor but you have to look at the big picture. Quality work is more important than saving money in the short term. A contractor that is willing to list all of the costs for any work they do should grab your attention. They are confident in their abilities and are not afraid of competition.
- Proven Track Record. You should never feel uncomfortable asking a contractor for information about previous projects. Even the most untechsavvy contractor should be able to produce pictures, videos or descriptions about projects they were involved in. In fact, most have a portfolio of previous projects they are proud of. If they don’t have something they can show you it can be seen as a sign they may not be a good fit for the work you are looking for or aren’t organized enough to put something together to grow their business. Either way it does not cast them in a great light. If they do have a portfolio ask specific questions about the work and how they came up with the concept. Being able to develop ideas and think outside the box means you can trust them to do the same with your property.
- Understand Costs/Expenses. A good contractor should understand the scope of your business and know exactly what your goals are. Anyone can find someone to work on a property when they need to. What separates a good contractor from a great one is the ability to do the work required and come in under budget. They understand all of the minor expenses involved and know where to cut corners and where to spend a little more. If you connect with a contractor who knows the financial side of the business your work life will be that much easier. Instead of constantly checking up on the property making sure things are running smoothly you can devote your attention elsewhere.
It cannot be understated just how essential a good contractor is to your business. Finding that contractor won’t be easy but if you take your time and know what to ask eventually they will come your way.