There are “bad” people in every profession. Just like there are bad doctors, bad lawyers and bad stock brokers, there are bad contractors. That being said, you shouldn’t let one bad apple give a black eye to everyone else in the business. If you are doing rehab work or any type of repairs on your properties, your contractor holds to key to your budget. If you follow them blindly, you could be susceptible to getting taken advantage of or not getting the best deal as you possibly can. Before it gets to that point, you need to talk to the prospective contractor and make sure you are both on the same page. Working with the right contractor is essential to your success as a real estate investor.
Most contractors come from referrals received from people in your network. There are some instances where your primary contractor is booked and you need to look elsewhere. If you do not have an existing relationship, you need to do your homework and ask questions. For every ten contractors you will run across, one that is either unscrupulous or inept. It is that one contractor that can put you behind the eight ball on your property.
If you find yourself looking for a contractor, you need to get multiple estimates. Going with the first person you talk to could leave you with regret in the middle of the project. Look for at least three different estimates and make sure you compare apples to apples. If your contractor can not itemize all of the costs or expenses, it could be viewed as a sign that they are looking to up-sell you somewhere. Contractors have every right to make their money, but they should also feel confident in their work and be willing to put this in every estimate. If the estimate is lumped together as just one number, you should scratch them off your list and move on.
If you aren’t sure the best way to go about doing the work, you can certainly ask your contractor for suggestions. They may try to up-sell you on items that will increase the life of the property or add greater appeal. This should not be viewed as a turn off and an automatic sign they are looking to milk you for every dollar. What should be alarming is when they belittle and ignore the work you want done. You can listen to the suggestions, but ultimately this is your house and you are paying for the work. If you want something done the way you want it, you are the one that is writing the checks and it should be done that way. If your contractor does not agree, you can always find someone else.
The more documentation you have, the better you will be if there is a disagreement down the road. Document everything from price to time-frames to the kind of materials used. If your contractor will not give you this documentation or starts to stray from what they said they would do, they may not be trustworthy.
Finding a good contractor is not an easy thing to do. Like anything else, it takes time to develop trust and to see how they work. If you have a good contractor, treat them like gold. If you don’t take the time to find someone right to work with, it may come back to haunt you. Picking the wrong contractor can do great damage to your business.