Property Management Challenges

In our many years as a property manager we have faced numerous challenges with our vendors. Here are a few examples:

  • A sewage pump failed over the weekend and we called a vendor who wanted $5,000 to replace the sump pump. The pump cost was $1,000. We needed it replaced but ended up negotiating with the vendor to reduce the price. This company paid the technicians half of everything they brought in as a commission. You can imagine how they priced their emergency response.
  • A roofer installed a new roof. They issued a warranty on the roof. Within a year, the new roof started leaking and unfortunately the roofer went out of business, so the warranty was worthless.
  • A painter bid a project and asked for half upfront to cover painting expenses. After we paid half upfront, he ignored the project, took the money and went on vacation. We ended up litigating.
  • A drain cleaning company cleared a drain line. Unfortunately, the cutting tool on their drain cleaner destroyed the pipe. Was the pipe old? Or did they destroy the pipe?

As you can tell, there is room for error…and errors cost you money. Your goal is to limit the errors and in turn improve property operating returns.

Vendor Pricing

Most of us are driven by vendor pricing. We want the least expensive price we can find — that is just natural. Unfortunately, the lowest price often produces substandard work due to lack of licensing or insurance, miscommunication or plain old inexperience.

Scope/Specifications (Spec)

First, you need to provide your vendor with clear instructions. Do you really know what you want? In particular, do you have a special siding you want to use, a special roofing system you want installed, or a paint job completed where the paint has a mold inhibitor included?

Your property might need a paint job, but you may not know how to get a vendor to do this correctly. To get help on this you can meet a few vendors and get educated or you can go to a paint store (where they have paint specifications or specs on file to get direction). You can also hire a consultant (an engineer or an architect) to help you with details. In other words, you need to learn how to manage major repairs and get them done right.

It makes sense to meet with at least three vendors and obtain three bids. Make sure they detail what they are going to do. I usually also ask for a hand sketch of the property or the job to help visualize where repairs are going to take place, especially for siding and asphalt repairs. This process is somewhat time-consuming, but the investment in time is worthwhile if we want the best quality we can afford.

This painting scope is an example of a “Spec”:

General:

  • Your contact details
  • Preferred timeframe

Surfaces to be painted: Specify the material of each interior and exterior surface (brick, wood, plaster, metal, cement, render, etc.) and whether they are new or previously painted. The material and condition of the surface will impact the level of preparation required, the sealing process required, and number of finishing coats needed.

Interior:

  • Walls
  • Ceilings
  • Doors
  • Windows
  • Trims
  • Floors

Exterior:

  • Siding
  • Roof
  • Gutters / drain pipes
  • Fence / gates
  • Doors
  • Windows
  • Garage
  • Garden paths

Preparation Required. This is the most time-consuming part of the painting process and most critical for long-lasting results. Preparation items to include:

  • Re-putting of window glazing
  • Mold removal
  • Washing / cleaning of surfaces
  • Dust, grease or scale removal
  • Rust removal
  • Loose or flaking paint removal
  • Patching holes, cracks, broken plaster
  • Sanding
  • Removal of fittings
  • Priming and sealing
  • Caulking of windows and doors
  • Soffit and siding repairs

Painting Materials and Colors: Some colors will require more coats than others. The more specific you can be about colors and materials, the more likely they will be able to achieve the desired outcome. Include in the brief:

  • Color schedule
  • Brand of paints
  • Gloss level
  • Depth of paint application
  • One or two coats?
  • Paint samples

Method of Application: The best method of application will depend on the type of finish being applied, the desired results, the type of surface and your budget. The three methods are:

  • Brush
  • Roller
  • Spray painting

Clean Up: Ensure that the quotes include information on clean-up procedures including:

  • Rubbish removal
  • Paint disposal
  • Splatter removal
  • Landscape / outdoor furniture protection

Vendor Relationships

Over the years of owning and managing property you will have developed special relationships with vendors you trust, i.e. those that come back and repeatedly do a good job. Most of the time you will have received a referral from a friend, or through a rental owners organization, like the Rental Housing Association (RHA) or the Metro Multifamily Housing Association (MMHA).

You might search online or turn to online directories such as Angie’s List. I caution you to be careful when using the internet exclusively. Vendors who are very tech savvy will have stacked the deck and may be paying to maintain their web reputation.

Smaller, more cost-effective vendors will be harder to find on the internet. You may have to rely on word of mouth. Always ask the question if the referral source is getting paid for referring the vendor.

Other key items to consider as you chose vendors to work on your property:

Professionalism

  • Do they care that the job is done in a professional manner?
  • Will they do it right the first time, using products and parts that will last?
  • Will they limit their work to repairs authorized by the Landlord?
  • Does their staff have the right skill set? Are they well-trained?
  • Will they issue a warranty or guarantee for more than 30-days?
  • Do they have general liability and worker’s compensation insurance?
  • Do they have a contractor’s license and are they bonded?
  • If they hire sub-contractors to perform the job, who is responsible for liens and quality control?

Emergency Vendors (such as plumbers, electricians, basic carpentry/handy person)

  • Are they available 24 hours a day, 365 days a year?
  • How much extra do they charge for emergency response?

Recalls

  • Is your vendor willing to admit their mistakes?
  • Will they give you a credit?
  • If required, will they redo the job?

Cleanliness

  • Will the job site be cleaned before they leave?
  • Will they protect tenants’ possessions?

The Fine Print

Make sure you understand the language on the back of the bid.

  • The vendor’s rules they ask you to comply with
  • When the late fees kick in and at what rate they accrue
  • Collection procedures if you do not pay
  • Mediation to solve disputes
  • Lien releases for large jobs

Summary

We use most vendors over and over again. They are part of our team and we need them to deliver a quality job on a consistent basis. Therefore, it is our responsibility to be clear in our instructions and expectations. We also need to acknowledge excellence and pay them on time. Vendors have bills, employees, health insurance and taxes to pay. If we expect them to deliver for us, we should behave responsibly as well.

The vast majority of vendors are trustworthy. What differentiates vendors is their experience, their tools and equipment, their overhead, the quality of their staff and their problem solving techniques. Your job as a property owner is to clearly spell out the job scope and pick the best vendor for the job. Unfortunately, this is not easy, but the tips in this article will simplify the process for you and improve your maintenance results.

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SVN PM Value Prop

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