Whether you’re a homeowner hiring someone for a small home improvement or a real estate investor taking on a major rehab project, it is critical to find and choose the right contractor. This guide will give helpful tips for locating and hiring a contractor, as well as developing a good working relationship. Even if not from personal experience, everyone’s at least heard a few contractor horror stories. Fortunately, most of the construction project problems and complaints could have been avoided or at least seriously reduced, if homeowners and real estate investors did their homework in advance and hired a reliable, honest, and proven licensed contractor.
The process of hiring the right contractor for a project takes some substantial and concentrated effort on the part of homeowners and real estate investors. It is necessary to check and verify the potential contractor’s license status and to call and visit with the potential contractor’s references.
Homeowners and investors must have contractors give them a written detailed scope of work, time frames with deadlines, a detailed outline of costs for materials and labor, and a written procedure of how and when payments will be paid. All of these will need to be included as part of the written contract, once the contractor is chosen.
Choosing between a Licensed General Contractor or a Licensed Subcontractor
General building contractors are essentially project managers. They manage or supervise projects and they schedule and coordinate the use of appropriate subcontractors as needed for a particular construction or remodeling job. For example, if a homeowner or investor is doing a complete bathroom remodeling job which involves several “trades” (such as a plumber, electrician, and a carpenter), the use of a licensed general contractor is appropriate and generally recommended. If the homeowner or investor is doing a single trade job such as putting on a new roof then a specialty subcontractor is typically the better option for that specific project.
Finding the Best Contractor
Generally speaking, you should only consider hiring licensed contractors with a track record of being in the contracting business at least five or more years. They have a greater chance of being honest, hardworking, financially stable, and responsible in their business dealings.
Possibly the most effective way to find a highly-qualified licensed contractor is to get referrals from successful real estate “rehabbers.” Go attend the local investor club, or call investors that post the “We Buy Houses” signs in your neighborhood, and ask the experienced investors who they regularly use and recommend for your type of project. Sometimes the personal recommendations from friends or relatives, who recently had similar projects completed and were satisfied with the job, could also prove to be worth checking out.
Other effective ways to find quality contractors include:
Looking online. A simple search for “home repair contractors” along with the name of your town will get you started. Craigslist can be useful for finding contractors. In addition, you can join a subscription site like Angie’s List, which provides user reviews and comments for contractors. And, although many companies are concentrating their marketing efforts online, the newspaper classifieds, weekly flyers (i.e. Pennysaver), and the Yellow Pages can still be worth a look.
Run your own ad. Run an ad in the local newspaper and on internet classified websites that reads: Local Investor looking for Quality Contractors to do Multiple Jobs in the _______ County Area, Call Me @ ________.
Go to job sites. You often can find jack-of-all-trades contractors at residential job sites. Talk to them during a lunch break or at the end of a work day. You often can find quality licensed contractors that take on side-jobs.
Regardless of how you find your potential contractor, you absolutely need to ensure that the contractor is licensed, bonded, insured, and has excellent local current references…
Verify the Potential Contractor’s License
Homeowners and real estate investors always need to check and verify the potential contractor’s license status with their particular State’s contractors licensing board. Many of the registrars are online and the license status and history of the contractors are available to check. Many states provide extensive information on the holders of the license, including the license history, any consumer complaints, and the bonding information.
Check out, verify, and even visit Potential Contractor’s References
Always ask the potential contractor for at least 3 recent references and 1 or 2 references of current jobs they are working on. Make sure to call the past references to verify that they were completely satisfied with the contractor’s work and the project overall.
Asking potential contractors for the names and addresses of their current local jobs will give you the opportunity to “stop by” and check out the work being done, and if the job site is relatively clean and organized. By “stopping by” a current job site, you might luck out and get the chance to ask the homeowner about their experiences with the contractor.
It’s also a good idea to investigate the potential contractor with your local city or county building department, your local consumer protection agency, the consumer fraud department of your State, and also the local Better Business Bureau. This might sound like over-kill to you, but it can potentially save you from a renovation disaster and truly is worth the extra time. Homeowners and investors should check with these organizations to see if they have any information, especially negative information, about the potential contractor they are considering hiring.
In addition to current and past references, homeowners and real estate investors need to get the contractor’s business address and their business telephone and fax numbers. Be sure to verify that they have a physical place of business even if it’s their home. A potential contractor who essentially operates out of the back of his truck and only has a mobile telephone may be very tough to track down if something goes wrong or if there is repair/warrantee issues in the future.
To wrap it up, there are no short cuts in the verification process of finding the right contractor. Always thoroughly investigate each contractor …references, license, bond, insurance and anything and everything else you can uncover. In doing so, you’ll dramatically increase your chances of having a positive experience with your new contractor.