How Does a Property Management Company Go About Choosing The Right Contractor For The Job?

For property management companies of all sizes, a key aspect of managing effectively is the quality of the workforce they have at their disposal. Property managers need employees, handymen, licensed tradesmen, and contractors to keep all parts of their business working optimally.

Cleaners, gardeners, and janitors are important for meeting the day-to-day needs of tenants for clean, attractive, comfortable, and accessible living quarters. Handymen and technicians take care of the repair and replacement of parts in the building’s structures and systems.

When Property Managers Need A Licensed Contractor In Chicago

But, once in a while, property managers need the services of a contractor to oversee projects they cannot comfortably assign to a handyman or tradesman. Typically, these types of projects go beyond basic repairs and involve major changes that alter the existing footprint of a property.

Property managers will normally give jobs like patching walls and unclogging toilets or kitchen drains to a handyman. While these small and inexpensive repair jobs are essential for maintaining the smooth operation of a home, they don’t do much to improve the property’s value.

On the other hand, jobs undertaken by contractors have the capacity to significantly improve the market value of a property. They are more expensive, take a longer time to complete, and are more disruptive in the way they affect the overall operation of the property manager’s business.

This is why a property management company’s approach to finding the contractors it uses for such projects is important, says MTD Management in Chicago. Because such projects have the potential to damage a home’s appeal and the property manager’s reputation; managers must ensure the contractors they use for these jobs are top-notch.

How can a property management company do this? How should property managers go about choosing contractors for their most important projects?

What Property Managers Should Look At When Choosing Contractors

Chicago property management contractorThe overall ease with which a project manager (PM) completes their projects depends on three things:

  • The breadth of their contractor selection criteria: how well-defined and relevant the conditions the company uses are
  • The level of adherence to the selected criteria: this is about the quality of attention a property manager gives to the contractor selection process
  • Proper project supervision: property managers must recognize that the best contractor may underperform if the PM does not keep their eyes on the project

How Is This Related To The Criteria Listed?

project managerEssentially, it means that the criteria are meaningless if they are not accompanied by a resolve to follow the guidelines to the letter. The level of detail a property management company brings to the processes for choosing contractors determines its success in finding the best contractors.

Where To Source For Property Management Contractors

Where the company goes to look for potential contractors determines the overall quality of the contractors they find. Property managers are often advised to start their search for reputable contractors by asking friends, relatives, or their real estate agent.

These approaches don’t work unless those friends or family members have the same high standards as the PM. Estate agents, on the other hand, may simply recommend contractors they have a relationship with.

Three of the best methods for finding good contractors are:

  • Visit local big-box stores

Local contractors will often visit box stores and building supplies wholesalers to get materials for their jobs. If a contractor is in a store early in the morning, it means they have a job to complete and are probably better than average.

Contractors are easily identified in these stores by the volume of materials that they purchase. Some stores will give out the names and telephone numbers of contractors.

  • Use Home Depot’s contractor services

Home Depot has a list of contacts of good contractors wherever they are needed in the country. The contractors available through this service are usually more expensive but they are quality companies.

  • Ask a local engineer

This is probably the best way to find a competent local contractor. Local engineers have the benefit of seeing various contractors’ work up close. They often see the state of the home before the contractor works on it and after they have finished their work. Local engineers also visit building sites during projects and they soon get an idea of who the best contractors are.

Licensing And Bonding

Chicago property management contractorsContractors who are not licensed and recognized by their local professional bodies should not be considered. Additionally, the contractors must have a stellar reputation on Yelp, BBB, and other similar platforms. Contractors must also have adequate insurance (including liability insurance) and they must be bonded.

Documents to back a contractor’s claims about their insurance or bonding status must come directly from the insurer or surety to the property manager’s office or email and not from the contractor.

Contractor’s Work History

If a contractor has been working in an area for a reasonably long time, it is usually better to work with them. This is because their work history is easier to verify and they have knowledge of local laws and some conditions that may affect a project.

Additionally, a company that has been in operation within an area for a long time will have built a reputation. If that reputation is a bad one, the company’s fortunes will often decline. Moreover, it will be easier to find locals who have complaints about the contractor.

Get And Check References

Finding the right contractor is often a game of numbers. The law of averages operates here also; the more prospective contractors a PM talks to, the greater the likelihood of finding a good one among them.

Every contractor on the shortlist must provide between 5 to 10 references. But beyond the number of references contractors provide, the system for verifying those references is the key.

Two methods can be applied here:

  • Talk to the contractor’s references

The contractor should provide the names and phone numbers of the owners of their past projects and not just the photos of those projects. These references should be contacted. If the owner is willing, the property manager should visit the building to view the contractor’s finished work or the reference should send pictures of it.

  • Verify with the city that the job was done

Details of jobs a contractor has done may be verified by pulling the permits for those jobs from city records. If the records don’t exist, the contractor lied or they did the job without a permit. In either case, they have failed.

The Quality Of Their Subcontractors

Unless a property manager chooses to work directly with subcontractors (which though more demanding is cheaper), they must depend on the contractor to hire and oversee subcontractors for the project. Before a contractor is hired, it is important to find out the subcontractors they work with and their relationship with those subcontractors.

Contractors who have a firm and binding agreement with subcontractors can usually be trusted to finish a project within schedule. Having solid relationships with competent subcontractors also means the contractor will have access to the best hands at all times.

A Written Bid Is Non-negotiable

Before submitting their bid, the contractor must be fully briefed on the details of the job, possibly with a visit to the site. The contractor’s bid must be written. How timely they are in submitting the bid and how detailed it is matters.

It must contain a complete breakdown of how much they are charging for every aspect of the job. Bids should also include a timeframe for completing the job. A written bid is a way to ensure the contractor fully understands the scope of the job. If it is signed by both the PM and the contractor, the document serves as a reference throughout the project.

Professionalism And Integrity

Most contractors are poor managers of time. They are often dishonest about their availability for projects and give sketchy details about the project timetable. Contractors who do this will destroy a property manager’s ability to plan and their relationship with tenants. Issues of timeliness and honesty should be one of the key questions to ask the contractor’s references.

A contractor must be willing to enter a contractual commitment to project dates and timelines so that their availability is assured. Contractors who refuse to sign a binding agreement on dates may not be trustworthy.

Their Payment Schedule

Another way to judge a contractor’s integrity and professionalism is how they structure payments for a job.  If the contractor is committed to providing the highest level of service, they will have no problems with receiving payment after a job is done.

Contractors who do a shoddy job prefer to get the bulk of their money upfront because they know that clients, on seeing the work, may be unwilling to complete payment. As a rule, no work should be paid for unless it has been completed. If a contractor demands money upfront to purchase materials, the materials can easily be purchased by the PM from Home Depot.

Communication Is Important

This is another question to ask a contractor’s references. Contractors must be timely, detailed, accurate, responsive, and flexible in the way they communicate. If a contractor delays to communicate or communicates inadequately before they are awarded a job, they will usually behave even worse during the project.

Contractors who don’t keep project owners in the loop will leave the property manager without a way of knowing that the job is going to schedule or being done to the requirement. An incommunicative contractor will make managing change orders very difficult.

There you have it, tips on how to choose the right Chicago general contractor for your rental property needs.