Vendors, Unicorns, and Fairy Tales

Property managers might as well be a side show in the circus because we are master jugglers. One of our most notable acts is the juggling of relationships. I like to think of us as being in the center of the wheel:

• One spoke represents the owner investors, without those guys, there’s no house to rent.
• Another spoke is the renter without whom we would have no need for a rental.
• An easily overlooked spoke is the pool of preferred vendors.

As  property managers, we are the proud nuts that hold it all together so this wheel can move on down the road.

Trustworthy Vendors

If you’ve ever had to have any work done on your home, you know that having a trustworthy vendor you can trust is worth their weight in gold. Most people don’t have a selection of general contractors in their pocket, know at least two HVAC vendors, or have a plumber they consider a friend. Thankfully, I’m not most people. I guess now I know what they mean when they say, “I’m not like the other kids.” Thanks to my job at HRS, I can usually say, “I know a guy.”

The relationship we build with vendors is such an important one.

I can tell you that vetting a new vendor is not easy, nor is it fun. I’ve been married for 24 years and finding a new vendor makes me feel like I’m dating again. We’re both trying to figure out if the other person is really what they present themselves to be. We’re trying to play it cool, but we are both secretly wondering if this relationship has what it takes to go the distance. Will our kids be good looking? Vendor Tinder! Why isn’t that a thing? Someone needs to make that happen.

Like with any relationship, there has to be some level of trust. When I send a work order to a vendor, I have to trust that they will do their due diligence to connect with the renter, they will do the work they say they did, and invoice accordingly. I also have to know that if something goes awry on a job, our vendors will do what needs to be done to take care of the situation.

The vendor has to trust that we are going to keep sending them enough work to keep their staff working, we will pay them in the agreed upon time, and we will be respectful of their time and their work. We also rely on vendors to let us know if they see something in a house that seems off. It could mean they report a pet that was not on the work order, it could be more people living in a house than expected, or even the possibility of renter misuse. This can give us an opportunity to mitigate potential damages before they get out of hand. 

We are a society that is accustomed to comparison shopping for most everything we buy. We often have investors requesting to use a vendor they choose for work being done on a house. This request always brings with it a sense of dread. From years of experience, we know why this is rarely as good as it looks. The first hurdle we have to get over is approving the proposed vendor.

Here’s what we need from any vendor doing work on a house:

• Current general liability insurance
• Current work comp insurance
• Agreement from the vendor to accept payment on a net30 term
• W9
• The vendor has to be willing to work with a Property Manager. We’ve had vendors who refuse to work with anyone except the property owner.
• The vendor will have to set up a profile in Property Meld, the maintenance software we use to share work orders. This is where they will get the scope of work request, the renters contact information, and will be able to schedule.

Once the vendor has provided all of these documents, we are ready to move on to the next set of challenges:

• What is the lead time for the vendor to get to the house?
• Are they booked out for weeks, requiring the renter to deal with the issues for longer than necessary?
• What is their turnaround time for the work?

Our preferred vendors know that time is money for everyone. In an occupied house, delaying certain types of work can lead to rent concessions, reimbursement to the renter for lodging or other incidentals. In a vacant house, every day that house sits empty costs the owner money. Think of it as reverse rent. Instead of earning $x/day for every day the house is rented, you are losing that much money for every day that house is vacant.

If vendor B can do the job for $100 less but their turnaround time costs you $300, what have you gained? One of my favorite expressions in these cases is “stepping over dollars to pick up dimes.” Picture yourself in one of those wind tunnel booths where the money is flying around. You’ve got 30 seconds to grab as much money as you can. Are you going to grab the $1 bills or are you going to grab the $20 bills? (For safety reasons, I cannot share an image where there is change flying around in this booth. So, no dimes.)

A Good Contractor is a Unicorn

As I said before, a good contractor is a unicorn. We know that many investors have developed their own relationships with vendors. We want to help you nurture those relationships. If that vendor is awesome, they might even make it into the deep end of the HRS vendor pool. We are happy to flag the property profile to use certain vendors. However, we need to get the vendor approved and set up to receive work orders BEFORE you need them to do work on the house. That way, when the need arises, we have everything we need and there’s no delay in getting done what needs to be done. 

Investors, Renters, and Property Managers all want the same thing when it comes to taking care of maintenance on a house. We want it done well, done quickly, and at the most reasonable price without sacrificing quality. Wait, that’s not entirely true… Actually what we all want is for nothing to ever go wrong in a house and if it does, for it to be free to fix. That is the fairy tale. And the only unicorn in this story is the perfect contractor.