When you’re leasing out commercial real estate, you need access to a fantastic list of preferred vendors and even more importantly – contractors. You’ll be making renovations for tenants, you’ll be doing repairs and rehabs during tenant turnovers, and you’ll want to improve and modernize your buildings from time to time. That’s going to require a contractor you can count on.
Here’s the thing: prices are going up, and so is demand. Most of the contractors we know are busier than ever, and the cost of materials and labor are rising along with prices for just about everything else.
What does this mean for you, as a commercial investor?
It means you need a good contractor you can trust. You need someone who will be available to you and committed to keeping prices competitive.
Here’s how we do it as commercial property managers in the High Desert.
Only Work With Licensed and Insured Contractors
It might be tempting to cut corners and hire a guy you met on the internet or at the hardware store.
Don’t do it.
You need a licensed and insured contractor when you’re making repairs and renovations to your commercial space. It’s the first and most basic requirement that must be met when you’re looking for help.
Licensure means you’re working with a credible, experienced professional. They’re serious and they’ve likely seen and done it all. They’ve undergone the necessary training, qualified for the license, and continue to keep their knowledge of building codes and best practices current.
Insurance is equally important. If you hire a contractor who doesn’t have insurance and they end up getting hurt while they’re at your property, you can expect a lawsuit and a lot of liability. It’s just not worth the risk.
Ask for the license and insurance, and if they are bonded before you hire a contractor.
Check Reviews and Reputation
Reputation counts, especially in the contracting business. Why would you work with someone who has a long list of complaints that the work wasn’t done properly, the projects ran late, or the pricing was way out of bounds? Ask for references for past projects. Read online reviews and testimonials. Ask about particular challenges.
Visit former buildings that your potential contractor has worked on. How do they look?
Ask for referrals and recommendations as well. When someone has worked with a fantastic contractor, they’re usually more than willing to share their contact information.
Check Out the Pricing
It’s rarely a good idea to hire the lowest bidder. You want to hire a contractor based on value and service more than anything else. But, you have a budget that you likely want to stick to, so pricing will be a factor in who you hire.
You can evaluate a few contractors and choose the one you like best, then try to negotiate a price with them. It’s a sole source procurement where you’re not asking for bids or proposals. Many contractors will be willing to work with you on this if they know they aren’t competing with others for your business.
Or, choose two or three contractors you like and ask for bids. Make sure the scope of work is consistent so they’re bidding on the same thing.
We work with a great network of contractors, and we’d be happy to tell you more about how to know you’re working with the best. Please contact us at Preston-Lee Management Company for more advice on commercial property management.
