As an investor, you likely have contractors you know and trust, especially if you’ve been in the real estate business for a while.
Because you know and trust them, you’d like working with them when you need repairs or maintenance done. And that makes sense! I always invite my landlords to use their own contractors if that’s what they prefer.
But it’s also my job to let investors know the potential downsides to different situations—and when it comes to working with a contractor that your property management company has no existing relationship with, there are definitely downsides.
The Downsides of Asking Your Property Manager to Use Contractors You’ve Chosen
What exactly are the pitfalls of asking your property manager to work with contractors you know? Could it negatively affect your tenants? And do the benefits outweigh the risk? Here’s some analysis.
It Takes Too Much Time
Your property manager has an existing network of contractors it works with for repairs, maintenance, and anything else your property might need. Because there’s a pre-existing relationship with those contractors, they’ve already ironed exactly how to work together.
When an opportunity to work together comes up, they already have everything in place—from payment processes to communication channels—to make the job fast, easy, and painless for everyone involved.
When you throw a new contractor into the mix, none of those processes are in place. You, your property manager, and your contractor will have to iron out all the details and figure things out as you go—which means a lot of extra time and coordination for everyone involved.
It also means longer wait times for your tenant and a tougher time coordinating repairs—neither of which are ideal when you’re dealing with a maintenance request and an impatient resident.
They Might Be Unlicensed—and Untraceable
While this isn’t as much of an issue for contractors you’ve worked with previously, it can be a problem when investors suggest a contractor strictly based on price.
Sure, their bid might be lower, but the bargain may not be all that it seems.
An unlicensed contractor can cost you far more time and money in the long-run if you don’t take the time to check their past work, monitor their communication habits, and ensure that they meet industry standards. Unfortunately, I’ve seen too many investors burned by contractors who weren’t who they claim to be.
I once had a long-distance client pay an unlicensed contractor $2,000 to paint a house and put in new carpet. After he assumed the work had been done, he called me and told me to go over to the property and see the finished product. When I got there, the contractor hadn’t done any work—and the client was never able to get a hold of the contractor again.
So, if you’ve worked with the contractor before and you’ve been able to gauge their quality of work, go for it! But if you’re strictly basing your choice off of price, I suggest taking a few extra measures, like calling references and checking in while the job is in progress, to avoid unnecessary frustrations.
Simple Solutions to the Contractor Dilemma
Don’t worry, you don’t have to deal with all that extra time, paperwork, or coordination—if you have the proper solution. Here are a few.
1. Manage Your contractors on Your Own
If you’re set on working with a particular contractor, the best solution is to manage the relationship independently.
As I mentioned earlier, I always encourage our investors to use their own contractors if that’s what they prefer. But I also let our investors manage that relationship. So instead of the coordination and payment going through our office, the investor and the contractor work together directly.
As an investor, managing your preferred contractor relationships independently is a win-win. You and your contractor get to continue doing business in whatever way that’s worked for you in the past, and you don’t have to try to onboard your contractor to your property manager’s systems and processes.
But, if you don’t want to spend time and energy managing your contractors or projects, there is another option.
2. Let Your Property Manager Choose Your Contractors
If you want to take a more hands-off approach to working with contractors, there are definitely benefits to working with your property manager’s recommended list of vendors.
Most property managers have a long-standing relationship with their contractors. For example, I’ve been working with most of my contractors for over a decade, and each of them were put through a rigorous screening process before I agreed to work with them (of all the contractors I’ve had the opportunity to work with, only 3 percent made the cut).
Because the property manager has been working with its network of contractors for so long, there will already be a certain level of trust. Not only will the property manager trust the contractors to get the job done quickly and efficiently, but the contractors will also trust the property manager to make the process as seamless as possible. And because it’s easy for them, they’ll prioritize the work — and you’ll reap the benefits.
If you’re looking to hire a property manager, find one who works with contractors whose work they stand behind — and contractors they know will deliver results for you as an investor.
In a nutshell, is it OK to ask your property manager to work with contractors you know? With the right property manager, it is. But keep in mind that if you enjoy working with a specific contractor, it’s probably best to manage the relationship yourself — or to rely on your property manager’s existing relationships to get the job done.