Repairs and maintenance are inevitable in any rental business.
When there’s an appliance to fix or a building to repair, you want it done right the first time. Who do you trust to handle the task?
When it comes to rental maintenance, you need reliable, licensed contractors. These include general maintenance contractors, carpenters, painters, HVAC professionals, landscapers, electricians, plumbers, or other contractors.
Before choosing a vendor, you should research the company, verify that the vendor is trustworthy, and carefully explain the task and conditions to whomever you pick. If all goes well, you’ll want to keep your new vendor handy for future jobs of a similar nature.
Here are a few tips for finding excellent vendors for your rentals and what to remember during the process.
Use a Local Vendor Directory
Your first step toward finding a reliable vendor is to seek an online vendor directory for your area. The American Apartment Owners’ Association (AAOA) has extensive national vendor listings on their website to browse whenever you need a new vendor.
Other popular vendor listing sites include Home Advisor, Pro Referral, and Houzz. Once you find a directory, you’ll need to enter a vendor category (Air Conditioning, Carpentry, Landscaping, etc.) and a ZIP code. Then you’ll be able to view the websites, addresses, and phone numbers of vendors in your area.
As you acquire high-quality vendors, keep them listed someplace handy. The next time you have a repair job, you can refer to your list of approved vendors.
Get Estimates for Large Jobs
If the project you’re working on is extensive, you should get multiple estimates. This way, you can see how the project will fit into your rental budget for the year and compare different vendors’ prices and qualifications.
Remember that a bigger investment often means bigger rewards down the line in terms of tenant safety, security, and general satisfaction. You can also get some of this money back come tax season by strategically applying tax deductions for repairs and depreciation for improvements.
Screen Vendors
Vendor screening is just as important as tenant screening. If you accidentally hire an unqualified contractor for a job, you might have to hire someone else to fix the damage they caused.
By screening all your vendors thoroughly, you prioritize the safety of your property and tenants while minimizing the risk of damage or danger.
Be sure to find out the following information:
- Experience – How long has the vendor worked in their specialty? Are they properly licensed? Do their references and testimonials check out? What about their employees?
- Insurance – Does the vendor have insurance in case of injury or damage?
- Communication – Is the vendor easy to contact and generally a good communicator?
As you consider a vendor, make sure you also conduct a brief phone interview or invite them to look at the project together for some preliminary discussion.
Outline the Task
Once you have a vendor, it’s your job to adequately outline the project. You should give sufficient detail and instructions so that the vendor is clear about the job.
You should also establish a timeframe for the project, as well as a plan for if that timeline goes awry. Discuss what you’ll do if additional time or expenses are needed to complete the task.
Don’t forget to mention and consider any possible risks to tenants as well.
Tax Tips
If you selected a trustworthy and experienced vendor, you’ll likely be satisfied with the finished result. Before you pay your bill, remember that landlords can apply special tax deductions for certain repairs.
Make sure you know what qualifies as a repair and improvement on the federal tax code. Repairs are tasks that maintain buildings and their systems in typical working order and as operating expenses are fully deductible in a given year. Improvements, on the other hand, are betterments, adaptations, or restorations of your property. These must be depreciated over several years.
To take advantage of the best deductions, record your project as a repair whenever possible. You should ask for separate invoices for repair and improvement activities. Also, ask your vendor to use language that implies a repair (“fix,” “patch,” “mend”) rather than an improvement (“replacement,” “remodel,” “addition”).
Integrate with Property Management Software
Finally, remember that your property management software or rental accounting solution may allow you to track vendor expenses. You can keep track of all your invoices from contractors in one place, in addition to incorporating them into your general budget.
Developing Vendor Partnerships
The goal of any interaction with a vendor is to establish a strong partnership. By researching, screening, and informing your vendors, you can rely on your loyal vendors to keep your rental business in top shape year to year.
