{"id":868,"date":"2022-02-01T12:12:28","date_gmt":"2022-02-01T17:12:28","guid":{"rendered":"https:\/\/www.jlbuilding.com\/?p=868"},"modified":"2023-05-10T19:59:48","modified_gmt":"2023-05-10T23:59:48","slug":"effectively-managing-contractors","status":"publish","type":"post","link":"https:\/\/www.jlbuilding.com\/blog\/effectively-managing-contractors\/","title":{"rendered":"Tips for Effectively Managing Contractors as a Real Estate Investor"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Effectively managing contractors<\/span><span style=\"font-weight: 400;\"> is an afterthought for many eager real estate investors. But having the right contractor on your side can be one of the best ways to <\/span><a href=\"https:\/\/www.jlbuilding.com\/homeowners\/\"><span style=\"font-weight: 400;\">ensure remodels or repairs are a success.<\/span><\/a><span style=\"font-weight: 400;\"> Whether you\u2019re looking to renovate an entire rental property or just need some repairs, this blog will explore how to find a qualified contractor, establish a contract, and manage projects on-time and within budget.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Do Your Due Diligence<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A simple piece of advice is to take your time before hiring a team. <\/span><a href=\"https:\/\/www.jlbuilding.com\/blog\/best-time-to-renovate\/\"><span style=\"font-weight: 400;\">It can be tempting to jump right into a renovation or repair project<\/span><\/a><span style=\"font-weight: 400;\"> \u2014 after all, the quicker the job is done, the quicker you can start turning a profit. But neglecting to do your due diligence when looking for the right contractors can cost you a lot of time, money, and headache in the long run.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Get Several Quotes<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">One of the first things you want to do is reach out to a few trusted contractors for a quote. Even though you may think you\u2019ve found the perfect fit the first time around, it never hurts to get to know a couple contractors to learn about their rates, qualifications, and way of conducting business. You can do this by gathering referrals from like-minded investors or homeowners, or searching online for licensed contractors in your area.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At J&amp;L, we make it easy for real estate investors and homeowners to<\/span><a href=\"https:\/\/www.jlbuilding.com\/contractors\/find\/\"><span style=\"font-weight: 400;\"> find trusted and licensed contractors with our \u201cFind a Contractor\u201d portal.\u00a0<\/span><\/a><\/p>\n<h3><span style=\"font-weight: 400;\">Select a Qualified and Licensed Contractor<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Finding a licensed contractor isn\u2019t a one-size-fits all approach. Depending on your job and budget, one type of contractor may work better for you than another. Generally, there are three types of contractors:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><strong>General Contractors.<\/strong> Typically the more expensive option, general contractors manage the entire project for you and bill their project management costs and the cost of their subcontractors\u2019 work. While it\u2019s more affordable to hire and manage subcontractors for yourself, this is an attractive option for a property owner looking to be hands-off.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><b>Subcontractors. <\/b><span style=\"font-weight: 400;\">Perhaps the most popular option, subcontractors are often specialists in various areas, hired to complete specific parts of a repair or remodel. Depending on the size and scope of your project, you may need anywhere from one subcontractor to a small team.<\/span><\/li>\n<\/ul>\n<p><b><\/b><br \/>\n<b><\/b><\/p>\n<ul>\n<li aria-level=\"1\"><b>Handymen. <\/b><span style=\"font-weight: 400;\">This is the most inexpensive option, and is sometimes used to complete a quick, once-and-done task. However, a handyman is generally unlicensed and isn\u2019t a great idea for bigger projects where elements like liability and other potential legal disputes are on the table.\u00a0<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Regardless of the type of contractor you find to be right for your project, the most important component of any business venture or working relationship is to partner with trusted and licensed individuals.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Avoid Paying Ahead<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Unless you\u2019re close with the contractor and have worked with them on a number of projects, it\u2019s a good idea to avoid paying for the entire project upfront. <\/span><a href=\"https:\/\/www.houselogic.com\/remodel\/budgeting-contracting\/top-5-contractor-scams-and-how-avoid-them\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Contractor scams aren\u2019t uncommon<\/span><\/a><span style=\"font-weight: 400;\">, and one popular tactic is for an alleged contractor to offer their work on a project at a highly discounted price because of supposedly leftover materials they have from a previous job. Once doing so, they take the full down payment and disappear without completing any work.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Similar to other areas in life, if it sounds too good to be true, it may be. This is another reason drafting a contract that is air-tight legally is so valuable. You want to make sure the relationship you develop with your contractor(s) is beneficial for all parties involved.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-869\" src=\"https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5-1024x683.jpg\" alt=\"A picture of an investor and a real estate contractor holding an iPad and pointing to a remodel project.\" width=\"1024\" height=\"683\" srcset=\"https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5-1024x683.jpg 1024w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5-300x200.jpg 300w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5-768x513.jpg 768w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5-1536x1025.jpg 1536w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5-1008x673.jpg 1008w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image5.jpg 1999w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<h2><span style=\"font-weight: 400;\">Develop the Relationship<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When thinking through <\/span><span style=\"font-weight: 400;\">how to effectively manage contractors<\/span><span style=\"font-weight: 400;\">, we can often miss the more personal elements that help make a working relationship run smoothly. The more you get to know your contractor\u2019s work and communication style, the better you will work together and the easier it will be to <\/span><span style=\"font-weight: 400;\">manage your contractors effectively<\/span><span style=\"font-weight: 400;\">. This means less back and forth throughout the project, quicker project completions, and less money spent dragging a job out for months past its due date.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Part of developing a strong relationship starts with the basics. Simple steps like creating a contract and keeping a project journal can be the difference between costly job disasters and legal fees.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Create a Contract<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">An important rule of thumb in business is to get everything in writing. The best way to protect yourself against misunderstandings, mistakes, or scams is by drafting a contract that holds both parties accountable to agreed upon terms.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s always important to get your estimates in writing, map out the project expectations in detail, and make sure the contract is clear before signing. Contracts must include, but are not limited to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Parties associated with business addresses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fines for exceeding the terms of the contract.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Scope of work, including a complete list of all work that needs to be done.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance and license requirements.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Terms of payment, including how much the entire work costs and when and how payments will be made.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Location\/address of the project, start date, and end date.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Who should provide tools and materials?<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Establish Clear Communication Guidelines<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A key component of <\/span><span style=\"font-weight: 400;\">effectively managing contractors<\/span><span style=\"font-weight: 400;\"> is establishing clear expectations and rules for communication. You don\u2019t want your contractor(s) calling you about every little thing, but you also don\u2019t want them to be completely unresponsive to your outreach should you have a question or a concern.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A lack of clear communication can easily delay a project and increase the budget, so it\u2019s important to set expectations upfront about how important communication is to you and how often you\u2019d like to keep in touch throughout the project.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Keep a Project Journal<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As work is being completed, it\u2019s a good idea to <\/span><a href=\"https:\/\/www.planradar.com\/us\/product\/report-templates\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">keep a simple log of how the project is progressing<\/span><\/a><span style=\"font-weight: 400;\"> and whether or not it\u2019s going as planned. You can also use it as a place to jot down any questions you may have for your contractor(s). Whether you choose to keep your project journal in a notebook, text document, or on your phone, it\u2019s there to help you keep track of how things are going.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The Qualities to Look for in a Contractor<\/span><\/h2>\n<h3><span style=\"font-weight: 400;\">Experience<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It\u2019s tough to beat experience. Working with a contractor who knows how to handle all the moving parts of a project, is experienced working within different budgets, and understands <\/span><span style=\"font-weight: 400;\">construction safety management<\/span><span style=\"font-weight: 400;\"> can go a long way. Realizing that the unexpected can happen, it\u2019s also a benefit to work with an experienced contractor who can stay nimble and quick on their feet when last minute delays or reroutes pop up.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Qualifications<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Again, finding a contractor with the proper qualifications and licensing is one of the most important details to look for. You want to ensure the contractor(s) you partner with have the necessary requirements from the State License Board, as well as the proper insurance coverage.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Proof of Work<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Partnering with a contractor excited to provide proof of work is a good sign. Similar to referrals, knowing firsthand the person you\u2019re heading into business with has completed similar projects before is reassuring. It\u2019s also nice to work with professionals proud of their work and eager to tackle their jobs with precision, skill, and care.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-870\" src=\"https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3-1024x678.jpg\" alt=\"A close-up picture of a yellow hardhat with two men shaking hands in the background.\" width=\"1024\" height=\"678\" srcset=\"https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3-1024x678.jpg 1024w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3-300x199.jpg 300w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3-768x509.jpg 768w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3-1536x1017.jpg 1536w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3-1016x673.jpg 1016w, https:\/\/www.jlbuilding.com\/wp-content\/uploads\/2022\/02\/image3.jpg 1999w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<h2><span style=\"font-weight: 400;\">Contractor Management 101<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Below are some important FAQs that homeowners or real estate professionals may run into when working with a contractor. Operating above-board isn\u2019t just about your reputation, it also will help you avoid costly mistakes and legal battles.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Is the Homeowner or Contractor Responsible for Securing a Permit?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">When <\/span><span style=\"font-weight: 400;\">creating a contract between a contractor and a homeowner<\/span><span style=\"font-weight: 400;\">, it\u2019s important to specify who is responsible for securing the building permit. It\u2019s important to note that unlicensed contractors cannot secure building permits.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Do You Need a Letter to Terminate a Contract Between a Homeowner and a Contractor?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Understanding your <\/span><span style=\"font-weight: 400;\">homeowner\u2019s rights with a contractor <\/span><span style=\"font-weight: 400;\">is invaluable. To know how to get out of a contract with a contractor, you must go through the terms of the contract and review the wording of the cancellation policy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">All contracts should include the &#8220;Notice of Right to Cancel Policy.&#8221; Although each state has its cancellation deadline, most states allow customers to cancel signed contracts within three business days, with no further action required on the part of the consumer.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You\u2019ll only need to mail in a signed and dated written notice of cancellation on or before midnight of the third business day following the signing of the contract. Once mailed, the notice becomes valid, as long as it is sent to the contractor&#8217;s correct address.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Does Homeowners Insurance Cover Unlicensed Contractors?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Many unlicensed contractors do not maintain an insurance policy, which can lead to out-of-pocket expenses for homeowners. Faulty work completed by an uninsured and unlicensed contractor is not covered by your homeowner\u2019s insurance. Additionally, product warranties can be voided due to the work done by this type of contractor.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Can a Contractor Sue a Homeowner?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. If a contractor believes they have found the homeowner to be in breach of the contract, they can file a lawsuit. The same applies to a homeowner who thinks the contractor hasn\u2019t held up their end of the contract.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Can a Homeowner or Contractor Write a Release of Liability Waiver?<\/span><\/h3>\n<p><a href=\"https:\/\/blog.waiverforever.com\/ensure-liability-waiver-enforceable\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Liability waivers are only as effective as they are enforceable.<\/span><\/a><span style=\"font-weight: 400;\"> To draft a proper release of liability waiver, you\u2019ll want to work with an attorney experienced in this area of legal documentation.<\/span><\/p>\n<h5><span style=\"font-weight: 400;\">As a property owner, <\/span><span style=\"font-weight: 400;\">effectively managing contractors<\/span><span style=\"font-weight: 400;\"> is one of the most important parts of a remodel. For more information on how we can help you, <\/span><a href=\"https:\/\/www.jlbuilding.com\/contact\/\"><span style=\"font-weight: 400;\">contact us today<\/span><\/a><span style=\"font-weight: 400;\"> to learn more about our work and the trusted contractors we partner with.<\/span><\/h5>\n","protected":false},"excerpt":{"rendered":"<p>Effectively managing contractors is an afterthought for many eager real estate investors. But having the right contractor on your side can be one [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":871,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[14],"tags":[],"class_list":{"0":"post-868","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-home-remodel","8":"entry"},"acf":[],"_links":{"self":[{"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/posts\/868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/comments?post=868"}],"version-history":[{"count":0,"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/posts\/868\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/media\/871"}],"wp:attachment":[{"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/media?parent=868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/categories?post=868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jlbuilding.com\/wp-json\/wp\/v2\/tags?post=868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}