Don't Get Ripped Off by Contractors: 3 Essential Tips For Your Airbnb

Welcome to Short Term Rental Riches. Quick, actionable ideas to help you along your real estate investment journey, but with a specific focus on short term rentals. Welcome back to the Short Term Rental Riches podcast where we talk about real estate, but usually with a focus on short term rentals. Today is more just about real estate in general and something that you are going to have to deal with one way or another. At some point in your real estate career. Almost everyone will have to either improve their property or deal with maintenance. It's just part of the game. And along with that, we have to deal with contractors or the people doing the work. And I've dealt with a lot of contractors in my day. I mean, if I had to guess, like 100 or 150 or something, you know, I don't even know. And in multiple cities across the US and outside of the US down in Colombia, where I've been living. So I've learned a lot. And I want to give you guys just some tips today, some things to consider and some things just to make the process easier and to know that you're not getting ripped off, which happens far too often, unfortunately. I was just talking with a buddy recently and he was telling me about his grandmother getting a new H VAC system, new AC, and it was like $21,000 or something like that. This is for a residential home and not a mansion, anything like that. You know, a pretty normal home. And he said, you paid what, grandma, $21,000. So they stopped. They stopped that deal right there already. They ended up getting a different company to finish the job for like 7,800 bucks or something like that, which is about the right price for that job. The old company was so embarrassed or worried for their reputation, which should be bad anyways, that they just left. They just left the equipment there. But this stuff happens all the time. And I'll give you an example of one that I just came across myself. But first, I just want to give you some tips for getting good estimates. The biggest thing in getting a good estimate with a contractor is that we just have to know what type of work they're doing. That's when most people get taken advantage of, when they have no clue what's entailed in the job. So they. The more you ask your contractors or your maintenance people or whoever's helping you, the more you're going to learn. And we have the benefit today to, I mean, we can figure out whatever we want to know in a pretty quick amount of time. It doesn't take a long time at all. We can jump on YouTube and you know, what does it take to change a water heater? For example? You can watch a five minute video and you can get an idea. That way we can learn whatever we want. And the second piece to getting those good estimates is just getting multiple bids, multiple estimates. And in that process, you're going to learn more about the work that you're doing if you're not already familiar with it. So that's another way it's just going to happen naturally. And I highly, highly recommend getting multiple bids, but also letting the people that are giving you the bids know that you are getting more than one. That way they know that you're savvy and you're comparing and you want to get the best deal, which doesn't always mean the least amount of money, by the way. The quality of the work and the price of the work is not directly related. A third thing that can help you is just to break out the labor and the materials on the bid. This is going to be different for different types of jobs. Some jobs are just labor based, for example, like pressure washing a building or something like that. But if you're doing an addition or you're doing a big plumbing job or bathroom remodel, those are going to have lots of materials. So if your contractor, whoever you're working with, can break those out for you, that'll give you a little better idea. So really the goal behind getting a good estimate is just you got to know a little bit about the job you're doing and do a little bit of research and that will help you get a good estimate. Now once we have a good estimate and we decide who we want to work with, I've got some tips on working with the contractors too, because depending on how big the job is, I mean, especially if it's a big remodel or something, I mean, you're going to be talking to these people, this company. Often you need a good relationship with them and you want to maintain a good one. So that's really, really important. But the first piece after you decide to go with someone is just get that job in writing. Even if it's a small job, just send them a text message that says you're gonna start at this time or on this date. This was the amount. These are the items we're covering. Ideally you have, you know, an invoice or something like that that really has it spelled out. But if it's something small, at least get it in a text message. And that way if the job Takes longer than expected or it's a long job to begin with. You don't get to the end and you guys both forgot what you agreed on. So that's the easiest thing and it makes it for both sides so that there's no confusion going forward. Don't pay too much up front. So if the job costs $10,000 and your contractor's asking you for 75% up front, that that's too much. That doesn't, you know. Now, of course, every job's different. Again, if this is like a labor only type of job or primarily labor, then you don't need to give as much money up front. If it's a roof job for ex, which requires a lot of materials, then giving 50% up front or something like that, you know, that's pretty standard. And you will learn this as you're talking with the different contractors too. It's one of the things you want to ask them. If it's a big job, how much do I need to pay up front? And so on and so on. So don't tell them. You know, they always ask when you want to get the job done. And if you tell them you don't really have a deadline or you know, like you're not in a hurry, then it's probably never going to get done. A lot of contractors, you know, they do, they prioritize their work and if you don't have a set deadline or anything like that, then they may leave your job and go work on someone else's job that's maybe paying them more or that's more in a hurry. And so you're going to get way behind. And you know that that's just such a big thing about renovations and construction. They always take longer than we expect them to. Unless you're, you know, flipping 500 houses a year and you have an excellent team that you work with, you have a pret darn good idea how long it's going to take. But if you're doing a few projects here and a few projects there, you know, or the first time, home development or something like that stuff always takes longer. There's always unknowns. So set a date, something that you're kind of firm on, and just make sure that that's something they could work with. So don't tell them you're not in a hurry or you don't have a deadline. And remember this is a relationship. So if it's a bigger job, then treat each other fairly. You want to, you know, if a big piece of the Job changes. Make sure you guys work something out reasonably and especially if you're in this for the long run like I am, and like I hope you are or will be. If you're not invested in real estate already, you're in this for the long run. And you want to have a good relationship with good contractors that you trust so you can use them in the future. So just remember, it is a relationship. It doesn't just come down to the terms of the deal. You know, there's. There's another piece to it. So a recent example for me, I'm renovating a commercial property right now, which is new to me. You guys know I, you know, short term rentals is a big focus of mine because we can make crazy, crazy returns. But I've got long term rentals and I've got a commercial property that I'm working on now, and I've never done a commercial property. It's got five. It's a small retail strip center. Plan to put a laundromat in two of the units. And the other ones I don't know what I'm going to do with yet. But it's a different type of roof. I've never worked with these roofs before, and so I learned a ton. And I got a lot of bids because it's a big job. I ultimately settled with someone. It's 31,000 bucks to change this roof. Now, most all these people are using the same materials, but I can tell you I think I got four bids, maybe five. This job fluctuated like tens of thousands of dollars for the same job, same materials that I have in writing. So make sure you get multiple bids. And I got this specific roofer from a referral who's done a lot of roofs with them. So that's, that's a big key. Not just taking the lowest price, but going with someone that you trust, that you hopefully have references from, especially if it's a big job in regards to finding these contractors. Referrals. I mean, I think referrals is one of the best ways because you're hearing from someone that you trust and they had a good experience with them. You can also find contractors on like HomeAdvisor now, which will have reviews, which are essentially like a referral. You know, that's a good thing that we have now. But if you're looking for someone just to help out with lots of things all the time, you know, go to your Home Depot, go to your Lowe's, go like on a Friday evening or something, you know, and if you can just, just wait there in the parking lot. That's where contractors are coming and waiting. Like the contracting pro area where people have their reserved parking spots and stuff like that. And just talk to some of the people going in. And most of the time they're professional. They're going to have advertisements on their truck or their van. So that's a good way to do it. So referrals are just driving around the area where your property's at. That can be a good way to do it too. And then at least you know that they already work in the area. So those are just a few things, you know, just make sure you know what your job is. Especially if it's a big job, get it in writing and get multiple bids because they range big time. And when you're working with your contractors, just remember you want to have a good relationship. Hopefully you're in this for the long run, you can use them going forward in the future. And they, if they are a good contractor, they can also refer you to friends of theirs that maybe specialize in another trade. So remember that you work well with them, they give you referrals to people that they've worked with and trust as well. And that can be a great source too. So if you're doing a project, just remember these things. The cool thing about doing a lot of this construction is once we do it, it's done. You know, it's done for a while. But if you don't do this right and you don't consider some of these things, this is the biggest stress point real estate it has been for me. It's where people go over budget. It takes way longer than expected and it's just, oh man, it can be stressful if you're not working with the right people. So remember, price is not always correlated with quality. Sometimes people that charge good prices still do just as good quality as the other ones. Hopefully that helped you. Hopefully you're not getting stressed out with any contractors you're working with right now. Until next time, have a wonderful day.

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