Contractor Screening

Contractor Screening

Contractor Screening

Contractor screening is essential in the property management business. But, not all property management companies are careful when choosing an outside contractor. In fact, some even hire vendors without verifying their license, insurance coverage, financial standing, or running a background check for criminal records. The result, poor quality work, fraud, or lost money. In other words, shoddy work will need to be redone by a competent contractor. And, if the work quality is really bad, it can even cost extra to undo poorly completed work. Every day in the property management business, new vendor relationships are forged. But the problem is, vendors are not always vetted, which puts many landlords at risk.

For these reasons and more, contractor screening is one of the best ways for rental property owners to reduce their risk. Remember, as a rental property owner, you will inevitably work with contractors. Whether it is to flip a house, buy and hold a rental property, or any other investment strategy you use, sooner or later your properties will need repairs or renovations. And, when that happens contractor screening is something you cannot overlook. That is, if you want to stay in business! With this in mind, we offer some more insight on why contractor screening is so important.

Red Flags

Have you ever had that feeling deep down in your stomach that something was wrong? It’s called intuition… while some of us are attuned to it, others simply ignore it. But, when it comes to a hiring a contractor for your rental property renovations, ignoring a red flag puts you at risk. Whether you are looking to update a kitchen or need a simple electrical job completed at one of your rental properties, it’s important to know who you are hiring! Luckily, bad contractors are easy to spot. Here are some of the red flags to watch out for: 

Bad Contractor – Red Flags To Watch Out For:

    • Refuses to put anything in writing
    • Tries to convince you to pull your own permits
    • Rarely shows up at the job site
    • Cuts corners and overrides your plans
    • Does not have a contractor’s license, insurance, or reviews
Contractor Screening

Contracting Scams

Because it is not always possible to spot a bad contractor, some rental property owners fall prey to popular contracting scams. One popular contracting scam is low balling other bids. To do this, the bad contractor sends in a lower bid to win the job and later asks for more money to keep moving forward. This happens when they run into “unforeseen problems”. While the fees may be genuine, they likely accounted for it earlier, but sent in a lower bid to win the job. Other contracting scams include:

Asking For Money Up Front:

  • Asks for all or a certain percentage of money upfront to rent equipment or buy supplies
  • After they receive the money they either take off
  • Or take their time finishing the job

It’s Not In The Contract:

  • Will verbally agree to one thing, but not put all the details in writing
  • So you end up paying an additional cost
  • Or end up with work that is not completed

Why Contractor Screening Is So Important

Working with a dishonest contractor can be just as devastating as renting to a bad tenant. That’s because, both types of people put you at risk, and in the end, cost you time and money. Remember, contractors can be your greatest resource or your worst nightmare. Which is why contractor screening is so important! The trick is, to weed out the bad seeds and to do this, you must screen them carefully! With this in mind, we offer some contractor screening tips: 

Ask Questions: 

  • How long have you been in this line of work?
  • What skill would you say you are the best at?
  • What tasks do you dislike?
  • In what cities do you typically work?
  • How many employees work for you? 
  • How busy are you?
  • Do you pull permits?

Ask For References: 

  • Make sure the ask the references several questions for example
    • What work did they do
    • How fast did they do it
    • Were they clean
    • Was there any problems
    • Would you hire them again

Verify: 

  • License and certificate
  • They have insurance coverage

Background Checks: 

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Conclusion

Hiring a reliable contractor is the most important step when beginning a repair or renovation project. For this reason, contractor screening is just as important as tenant screening. After all, you wouldn’t let just anyone live in one of your rentals, so why would you let just anyone work on them. Because hiring the wrong contractor can put your business at risk, you may want to consider hiring property management company to help you.

If you’re a rental property owner or landlord looking for a more hands-off approach when it comes to hiring the right contractors, we can help! We have been involved in property management long enough to know the difference between good contractors and bad ones. In fact, we only work with licensed, certified, insured, reputable professionals that have been fully vetted.

So, whether you are interested in changing property management companies, or simply looking to hire one for the first time, we can help. We manage single-family homes, condos, and multi-family properties throughout San Diego County. Call us today at (858) 576-2176 to get started.