Any seasoned investor will tell you that finding the right contractor is critical for a successful renovation. The project may be a flip or rental, but in either circumstance the disposition is irrelevant. The wrong contractor can turn any potentially profitable deal into a financial nightmare. Below are some tips for evaluating contractors to ensure you put yourself in the best position to succeed:
1. Evaluate Before the Need
Scrambling to find a good contractor once you have a property under contract is not an ideal scenario. Begin looking before you have a deal ready. That will give you plenty of time to ask pertinent questions and get comfortable with the decision.
Always ask your contractor candidates for a minimum of three references. Make sure the references do not have any ties to the company. Ask how the contractor handled unforeseen issues to determine their level of customer service. Do not forget to get before and after photos to sample the contractor’s quality of work.
3. Insurance, Licenses, and Permit
Many experienced investors utilize their own sub-contractors and will minimize a need for “papered” vendors. For a new investor it is important to broach this topic with any contractor candidate. Proper insurance and licensing is specifically important when dealing with HVAC, plumbing, and electrical. Permits are not always required, but make sure the contractor is prepared to pull them if needed.
4. Cost is Only One Factor
Many new investors think finding the cheapest contractor will save them money. The cheapest option might just cost them more money in the end. The low cost contractor can often provide poor service and an inferior product. Cost is something to consider, but do not let that factor solely dictate your choice in contractor.
Evaluating Contractors Carefully Saves Time & Money
Finding the right contractor is one of the most important components within a successful renovation project. Taking the time to evaluate options and identify a quality vendor should lead to less stress and more profit as you continue to invest.