My new fourplex is going to need quite a bit of work to be ready to get top market rents. The previous owner had let a LOT of things go over the years. Here are just a few things on the list: replacing all of the windows, replacing all of the vanities, sinks, and faucets, replacing loose and missing railings, replacing front doors that literally have massive holes in them, and painting the building inside and out. There’s a lot more than that, but those are some of the major categories. Some of those things I can do myself, but some of them are above my pay grade, and I just don’t have the time or ability to get all this work done myself in a timely manner. Every day the work sits unfinished is another day I lose out on collecting rent. So now I have to do the scary job of choosing a contractor to do the work.
Choosing a Contractor: Factors to Consider
Choosing a contractor is nerve-wracking for me for several reasons. These are some of the factors I’m considering in the process:
First, I obviously need a contractor who’s going to do quality work. In a sense, it’s more important to get a good contractor for a rental property than it is for work on your own home, because tenants can be very, very hard on property. They slam doors, they bang into counter tops, and they are just generally tough on everything, because they don’t own it. It’s like driving a rental car: no one is as careful with a rental as they are with their own car. If you have a contractor who cuts corners, you’re way more likely to notice it in a rental, because the tenants are stress-testing every component of the work.
Second, I need a contractor who is going to charge a reasonable price. This is tricky. You can get a bid from your contractor in advance, but sometimes things pop up during the process that aren’t included in the original bid. And you have to be careful to review the bid very carefully before you start to make sure everything is listed that you want to have done. At some point, you have to just trust your gut and go for it.
Third, I need a contractor who’s going to get the work done fast. At $1,500 per month, which is just a little less than I hope to get for each unit, that’s about $50 per day in lost rent. If one unit falls behind schedule, it will cost me $50 per day until it’s done. If all four units are behind schedule, that’s $200 per day. Speed is going to be critical. I’m already going to be losing money during the renovation process, so the faster I can get all the units back on line, the sooner I can start making money again to pay the mortgage, insurance, and renovation costs.
Finally, I need a contractor who I can work well with. Getting a contractor who shows up late and leaves early every day, or who doesn’t take direction well, or who isn’t willing to discuss things with you or ask you clarifying questions about what you want can be a nightmare. This is especially important to me because of my personality. I hate feeling like I’m imposing on other people. If I ended up with a contractor who acted as though I was bothering him whenever I asked a question, I would feel pressured to stop asking questions, and I probably wouldn’t get as good of a product at the end. It’s easy enough to say I just need to suck it up and make my voice heard throughout the process, but that’s easier said than done, and ultimately I don’t want to feel uncomfortable the whole time.
Getting Multiple Bids
I am a pretty serious introvert, so I really dislike having to talk to people. Also, I used to work in a call center, so now I absolutely HATE having to talk on the phone. You can imagine how fun it is for me to call around to different companies to get multiple bids to do the work. Ugh. But there’s really no way around it. You can just call one company and take whatever price they offer, but if your job is a few thousand bucks or more, you could be losing some serious money by not getting multiple bids.
I called two contractors and set up a time to go through the property with each of them. They were supposed to be at the property at nearly the same time, one at 8:30 a.m. and one at 10:00 a.m., but the 10:00 a.m. guy called to say he was stuck at another project and wouldn’t be by until mid-afternoon. Fortunately, I knew where the local Home Depot was, so I popped over there and bought some Decora outlets and light switches and busied myself by swapping them out while I was waiting.
I walked each of the contractors through the vacant unit (the one that was formerly occupied by the owner) and the outside of the building. I tried to describe all the same stuff to both guys, so I could get comparable bids. There were a couple of things that I mentioned to the first guy that I forgot to mention to the second guy, and vice versa, but for the most part I think I did a pretty good job of highlighting all the same things. They both took notes as they walked through the property. When I got their bids, though, there was very little in common between them. You would almost think they walked through different properties. Fortunately, I was able to find about three line items that they both quoted, so I could use those items to compare between the two.
One contractor was definitely quite a bit cheaper than the other on the few line items that I could compare. It’s a contractor who I’ve worked with before, too, so that was good news for me. This guy did an extensive remodel of the upstairs portion of my house a couple of years ago. Having that prior working relationship with him made my decision a little easier because I didn’t have to guess about whether he and I would have a good working relationship (we do), or whether he does quality work (he does). There were just a few small flaws that I noticed in his work at my house, and most people probably wouldn’t even notice it. The durability seems good, and that’s more of what I’m concerned about.
Mixing It Up with Different Contractors
One of the other things I’m going to do to save costs and try to keep things moving along quickly is that I’m going to hire out some of the work to specialty companies. These are the things that I will likely hire out separately: the window replacement, the painting, the artificial turf, the garage door replacement, and the deck repair. Generally speaking, I prefer to hire one person to do almost everything. There’s some efficiency in having the same person show up to the worksite every day, versus having to coordinate with multiple contractors. But for some of the specialty work, there’s just no substitute for expertise in that specific field. It can mean the difference between a just-okay finished product and a really stellar job. Also, the cost is usually a bit cheaper if you use the specialty pros, because they’re more efficient at it, so they can do it with less labor cost.
One of the contractors, for example, quoted me a price of $12,000 for the artificial turf. That seemed high to me. I had artificial turf put in at my house back in 2011, and for the front and back yard combined, it was about $7,500. Eyeballing this area for turf installation, it seemed to me like it should be around $5,000–$6,000. Sure enough, when I measured the area (using Google Earth, since I wasn’t at the property) and called around to three other turf installers, they quoted me a range of $4,800 (for cheap product) to around $5,500 (for the better quality product). I’m hoping to get as good a result by calling a specialty window company, too.
The other thing I like about using the separate contractors for the specialty work is that it will free up my primary contractor to get all the general repair work done faster. The sooner we can get all this work done and get the units re-rented, the sooner I’ll be able to sleep at night!
Now that I’ve done the scary part of choosing a contractor, I’m anxious to get the ball rolling. I have one unit that I can get working on now, but the others won’t be ready for a little while because the tenants haven’t vacated yet. One (or maybe two) should be vacant by the end of this month. The last one or two should be vacant by the end of the April. As soon as they are all out, I can really get started on the major work. In the meantime, it’s going to be a bit of a struggle to do what I can on just that one unit and on the outside of the building, while I’m waiting for the other units to clear out.
What do you look for when you hire a contractor? Do you have any tips for choosing a good one?