Whether you are a real estate investor who prefers to fix and flip houses, or a landlord who prefers to use rental properties for long-term passive income, working with contractors is simply a part of doing business. In the real estate investment world, however, horror stories abound about contractors who have turned potentially lucrative property deals into complete disasters. As a real estate investor, it is important to know how to avoid these situations altogether. Here are 4 ways to avoid having contractor horror stories of your own.
Use Only Highly Recommended Contractors
This is easily the most important step to take to protect yourself from contracting nightmares. If you cannot find satisfactorily in-depth positive reviews of a given contractor's work, it is best not to do business with that contractor. If possible, find out what contractors other real estate investors in your area use on a regular basis. Local real estate investment clubs can be an excellent resource for finding out who your fellow investors recommend.
Learn About the Work Your Contractors are Doing
As a real estate investor, you use contractors as a way of better leveraging your time and efforts. That, however, does not mean that you shouldn't know as much as you can about the projects your contractors are tackling. This is knowledge that will come with experience, but new investors can learn the basics of plumbing, electrical, flooring and other renovation projects through online tutorials or home improvement books. Being armed with a positive knowledge of what needs to be done and how much it should cost will help to prevent any problems with unscrupulous contractors.
One of the largest mistakes a real estate investor can make is to set a contractor to work and then simply leave. When working with contractors, it is important to remain in contact and get regular updates on the project. Being present at the home that is being worked on from time to time can also help to remind the contractor that you are keeping track of the time and progress of the project. Maintaining regular contact and communication will not only help to speed the process along, but will also help you to quickly manage any problems that may arise.
Keep Your Contractors
One of the most valuable assets that a real estate investor can possibly have is a list of tested and proven contractors that he or she has worked with in the past. If a contractor works quickly, does a great job, and exceeds expectations, make sure you use that contractor again in the future. Over time, you will develop a list of go-to contractors for certain project types that you know you can depend on.
Real estate investing can be difficult at first, but employing these simple steps will make dealing with your contractors much easier and help you to avoid the hassle of contracting disasters. The real estate business is all about finding systems and methods that consistently allow you to leverage your time more effectively. Another excellent way to do this is to use hard money lenders for your capital, rather than concerning yourself with the difficulty of bank loans. To learn more about how hard money lenders can help you and your real estate business, contact us today.