Vendors and contractors play a role in the success of your rental business. From simple repairs to major renovations, you need experts you can rely on.
Before hiring these experts, you need to screen them. If you don’t research a vendor before allowing them to work on your properties, you jeopardize your rental business’s safety, security, reputation, and financial prospects.
Vendors should help you add value to your rentals, not compromise or threaten them. Avoid these risks by screening all your vendors. This means reading reviews, verifying credentials, and evaluating them personally.
Here are some tips and best practices for screening your vendors.
Use a Local Vendor Directory
Vendor directories are a great place to start when searching for a reliable vendor. If you don’t currently have a vendor for a particular service (e.g., cleaning, plumbing, HVAC repair, construction, etc.), start by finding a list of all the registered contractors in your area. AAOA’s vendor directory is a great resource. You can also check your city or county’s site for a list of local vendors.
Directories help you find out who’s available and what services they offer. You can also find basic contact information for most vendors, including a phone number, email, and website link you can use to explore their company further.
The fact that a vendor is listed in a directory is a good sign, but it doesn’t necessarily mean they will be the right vendor for your needs. Before you give any company a call, continue your digital digging.
Research Reputations Online
Don’t stop at a company’s website. Websites are carefully cultivated by the company to advertise their services in the best light possible. For a less biased view of a vendor, you’ll need independent reviews.
You can find reviews on popular vendor listing sites (such as AAOA’s) or simply search online. You might also try a homeowner’s association for information or browse social media reviews by landlords who have used the vendor’s services. The idea is to read firsthand from landlords who are familiar with the company.
Pictures of finished products are even better if you can find them. A vendor with many positive reviews and approval by your local competitors is most likely credible.
Always Verify Licensure
Never assume that a vendor has the credentials they should for a particular job. Before you let a vendor work on your properties, always ask for identification and the proper paperwork.
If the vendor needs to operate large machinery or use dangerous equipment on your property, are they licensed to do so?
This step will ensure your contractor has enough experience to do the job well and protect you legally.
Confirm Insurance
Likewise, your vendors should also be insured in case of any accidents. Uninsured vendors you allow to work on your properties may lead to legal entanglements if an accident occurs.
Don’t let legal liability be a possibility. Always ask a vendor to verify their insurance before continuing with them. If they cannot or will not do so, politely tell the vendor that you cannot work with them.
Meet Vendors In-Person First
Don’t sign a contract with a vendor without meeting them face-to-face first. This is the only way to truly evaluate whether the contractors you want to hire are friendly, respectful, and courteous.
These individuals will be around or inside your rentals, interacting at the very least with you and probably with tenants in their homes. Contractors who don’t respect your tenants or follow instructions are not worth your money. Plus, they may cause tenants to submit complaints or even move out.
Speaking with your new vendor is a quick way to tell whether they are a good fit. It will also help you evaluate whether you’d like to work with the company long-term and establish an enduring partnership.
Ask for Estimates from Several Companies
A single project description can result in a variety of estimates from different companies. Have several vendors give you an estimate before making a final decision. You want a high-quality job, but there might be a limit at which paying extra won’t offer further benefits.
When you do hire a vendor, ask for a digital invoice if possible. This will make it easier to log the expense on your rental property management software. Some software platforms also let you autogenerate 1099 forms for your vendors come tax season.
Finding Trustworthy Vendors and Contractors
Vendor screening may not seem as urgent as tenant screening, but that doesn’t mean you can neglect it without consequences. Protect yourself, your business, and your tenants by following these tips for vendor screening. You will thank yourself when the job is well done.
