Property Management Partners: Working with Contractors and Vendors
A big part of your company’s success depends upon healthy property management partnerships with vendors and contractors you can trust.
Finding the right property management partners is a difficult (and occasionally risky) endeavor that property management companies struggle with regularly. Often, the sheer volume of available contractors and vendors is intimidating enough! Selecting a reliable, responsible, and effective partner involves some risk simply because it can be difficult to determine who will make a good partner and whom you should avoid. Luckily, we’re here to help!
No one wants to waste time, especially not when searching for dependable property management partners. You need these partners to provide the services necessary to keep your business running smoothly.
Vendor services such as building and unit maintenance, laundry, landscaping, hot water, insurance, moving and storage, real estate agents, and even real estate lawyers are all examples of the various partnerships your company must find and maintain.
Perhaps one of the most important resources your property management company has is a roster of reliable vendors and contractors you know you can depend on. Be it regular maintenance or emergency last-minute or late-night assistance, a list of trusted property management partners is an invaluable resource.
Partnering with vendors and contractors who reliably deliver high-quality work is important to everyone’s success. This can be hard to achieve for even the most veteran property management companies, and even harder for those just getting started.
When you have a reliable network of property management vendors, business tends to run well. Building maintenance and upkeep is attended to promptly, hot water heaters are always up and running, and you have confidence that your real estate lawyers are always working toward your best interests.
We don’t have to tell you what it’s like when you’re having problems with your property management partnerships. An unreliable contractor can cost you time, money, tenants and even potential legal trouble.
It’s important to understand what to look for when you’re searching for a vendor or contracting service so you can avoid a risky partnership with a new or unknown vendor. A bit of care on the front end during both your research and vetting process will ensure that you find the right partners the first time.
These Aren’t the Contractors You’re Looking For: Watch Out for These Red Flags
No matter if your company is well established or just getting started, the need to keep your property management partners roster up to date is always worth the effort. Time spent researching contractors and vendors for consideration as potential partners is time well spent. A properly vetted and approved vendor can save your business both time and money, especially when called upon for an emergency scenario.
When a problem arises (they always do), the last thing you want is to have a vacant space in your contacts list. Below are some key ideas and advice to consider when building and/or adding to your property management partners list.
No Reviews? Bad Reviews…
If you’re considering a contractor or vendor that doesn’t have any reviews anywhere (Angie’s List, Google Reviews via Google Maps, or their own website), then you should probably keep looking. This is one of the easiest ways to verify the credibility of a potential property management vendor partner. In some cases, they may be a new business and haven’t had the opportunity to acquire any reviews yet, but even a greenhorn should be able to provide you with some sort of referral. On the other hand, one or two bad reviews may not be a cause for concern. If there’s a long list of complaints, then it’s best to keep looking.
No Insurance or License to Operate?
Can they provide credentials, or do they make excuses about their license and/or insurance? Sure, they may be cheaper than the competition, but in this scenario, you may just get far more than you bargained for. Working with anyone who isn’t officially licensed or insured is a risk you simply can’t take. Any legitimate contractor or vendor service should easily be able to produce current credentials and insurance upon request.
“We (You) Don’t Need to Get Permits for This Job”
If a contractor or vendor suggests that they can do the work under the table for any reason, keep walking. Your property management company—not the vendor/contractor—will be legally responsible for any violations, accidents, or mishaps. Never take this advice. Ever.
“We Don’t Need to Write A Contract”
What?! Believe it or not, but this is suggested more commonly than you’d ever think. No. Just no. “Get it in writing” should be a golden rule of working with contractors and vendors. Cover ALL your bases by having a professional contract written and reviewed by your legal team, and make your contractional obligations and requirements clean before hiring any contractors. If any businesses refuse to sign a contract, move on!
Not Sticking to Your Plan (or the Contract)
Is the vendor or contractor ignoring your plan? Are they overriding your established project guidelines? This may be happening so they can cut corners and save money or time while trying to maximize profits for themselves. They may think that they know better than you how a service or job should be completed, or perhaps they simply don’t want to follow your guidelines. If this is happening, you should look for a new vendor who can follow your established plan.
Getting Ghosted in Times of Need?
Noticing that they never seem to be around? If your maintenance contractor is nowhere to be found when a problem with one of your properties needs to be addressed, this is a bad sign. Not only does this reflect poorly on the vendor’s work ethic, but ultimately, this can damage your reputation and relationships with your clients or tenants. You pay your property management company to manage the property, so you’d better be sure that your vendors, contractors, and partners are doing their jobs as well.
A Property Management Vendor Guide
To help you avoid wasting time and money, we’ve outlined a sample ideal scenario of what it should look like when finding a vendor or contractor to partner with.
Below, we highlight what an ideal vendor working relationship looks like. The need for a hot water heating service provider serves as our example vendor. We outline from start to finish what establishing a good working relationship should look like with examples.
Your property management company owns or manages various properties including small multi-family buildings and just purchased an apartment complex with over one hundred units. You know that hot water is critical to every single unit and you’re considering a hot water service provider that you can depend on to efficiently service your units hot water appliances.
Your qualifications include a reliable water service provider that can service, maintain, repair, and replace your machines quickly and without fail. The last thing you want is for any of your tenants to be without hot water for any amount of time.
Additionally, you are also considering the option of renting vs. owning your water heaters, and you’re looking for reliable and trustworthy insight into the advantages and disadvantages of both options.
Research and Vetting
- References: First things first—check references. As you look for a hot water heating service that can meet the above-outlined qualifications, you need to do your research into each of your potential vendor choices. Don’t just look for testimonials on their website but check other review sites as well. Look for both positive and (if any) negative reviews and be sure to read into why they received these reviews.
- Communication: How easy are they to get a hold of? Do they respond immediately or within an established timeline? Do they answer your calls or call back as soon as they are able? Do they provide an honest assessment of the work and do they always show up to the job site on time or even ahead of schedule? Have they given you a non-biased outline, guide, whitepaper, sell sheet (or even simply a conversation) detailing the pros and cons of renting vs. owning your various properties’ machines?
- Honest Work: Does anything appear “off” about how they do business with your company? A reliable property management partner won’t give you pause about how they operate professionally, nor will they cause you to question if they are a trusted partner. Honest work and communication aren’t hard to identify. If you find yourself questioning the honesty and credibility of your hot water service vendor, look for a new one.
- Honest Recommendations for Service: You should also feel confident that they are providing you with honest recommendations. After reviewing their response to renting vs. owning hot water heaters, how do you feel about the information they’ve provided? Does it sound legit? Have you cross-referenced with other information researched online and how does it stand up? The information offered by your selected hot water service provider should be honest and inclusive. It should include the pros and cons of each option and any recommendations they make should sound reasonable and be backed up by facts. Don’t let high-pressure sales and dismissive tactics affect your opinions.
- Competitive Price Structure: This one is pretty straightforward but worth mentioning. Do your research and find out what the competition charges for similar services. Whomever you decide to work with, their pricing structure should be fair, competitive, and beneficial to each party involved.
- Effective and Organized: You can usually tell how organized a company is fairly quickly. Signs include communication, response time, maintenance and service schedules, job completion and invoicing best practices.
- Establishing A Fair Property Management Contract: Depending upon how well-established the hot water service vendor is, they may already have a form of “boilerplate contract” that both of your companies can work from. If your property management company doesn’t have at least some sort of stock contract template drafted, it’s definitely worth the investment. You can easily acquire your own custom template from your real estate attorney partner(s), or perhaps even find one that you can modify to suit your needs online.
Regardless, the details of your contract agreement should be hammered out together with (each and every one of) your chosen vendor or contractor before any work and/or payments are to begin. Once both parties have agreed to the terms, take the extra steps in having your attorney look over the documents to ensure that there are no surprises hiding in the fine print. Your client should do the same.
For more information on property management partnership contracts, visit here.
If your hot water service vendor satisfies these conditions professionally and with speed and grace, you know you’ve found a solid property management partner. If not, then it’s probably best you keep looking until you do find one that satisfies these values.
This example scenario is designed to be a good outline for what your property management company should be working toward with your vendor and contractor partners.
While the details of each contract and relationship will vary depending upon the services provided, the above outline provides you with a solid structure to follow no matter what type of property management partnership you’re working to establish.
For more ideas, tips, and best practices to help you manage your property management partnerships, hot water needs and all your property management industry concerns, visit us today!
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