{"id":151,"date":"2024-10-07T06:49:37","date_gmt":"2024-10-07T06:49:37","guid":{"rendered":"https:\/\/myrealestatearticle.com\/?p=151"},"modified":"2024-10-07T06:49:37","modified_gmt":"2024-10-07T06:49:37","slug":"how-to-negotiate-with-contractors-the-definitive-guide","status":"publish","type":"post","link":"https:\/\/myrealestatearticle.com\/?p=151","title":{"rendered":"How to Negotiate with Contractors: The Definitive Guide"},"content":{"rendered":"<div class=\"et_pb_section et_pb_section_0 et_section_regular\">\n<div class=\"et_pb_row et_pb_row_0\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_0  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_0  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p>The Big Picture On How to Negotiate With Contractors in Real Estate:<\/p>\n<p><span>Build relationships with contractors before you need them. Create a network of trusted professionals for different specialties to prepare you for issues.<\/span><br \/>\n<span>Gather 3-5 quotes for each job, learning more about the work required with each conversation. It\u2019ll you negotiate from a more informed position.<\/span><br \/>\n<span>Buy materials yourself rather than letting the contractor handle it. This prevents markup and gives you more control over costs.<\/span><\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_1\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_1  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_toggle et_pb_toggle_0 et_pb_toggle_item  et_pb_toggle_close\">\n<h5 class=\"et_pb_toggle_title\">Disclaimer<\/h5>\n<div class=\"et_pb_toggle_content clearfix\">\n<p><span>The information provided on this website is for general informational purposes only and should not be construed as legal, financial, or investment advice.\u00a0<\/span><\/p>\n<p><strong>Always consult a licensed real estate consultant and\/or financial advisor about your investment decisions.\u00a0<\/strong><\/p>\n<p><span>Real estate investing involves risks; past performance does not indicate future results. We make no representations or warranties about the accuracy or reliability of the information provided.\u00a0<\/span><\/p>\n<p><span>Our articles may have affiliate links. If you click on an affiliate link, the affiliate may compensate our website at no cost to you. You can view our <\/span><a href=\"https:\/\/sparkrental.com\/privacy-policy\/\" target=\"_self\" rel=\"noopener\"><span>Privacy Policy<\/span><\/a><span> here for more information.\u00a0<\/span><\/p>\n<p>\u00a0<\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_section et_pb_section_1 et_section_regular\">\n<div class=\"et_pb_row et_pb_row_2\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_2  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_image et_pb_image_0\">\n<p>\t\t\t\t<span class=\"et_pb_image_wrap \"><\/span>\n\t\t\t<\/p><\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_1  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p><strong>Image Credits: <\/strong>Sergio Santos \/ <a href=\"https:\/\/www.flickr.com\/\" target=\"_blank\" rel=\"noopener\">Flickr<\/a><span> under a <a href=\"http:\/\/creativecommons.org\/licenses\/by\/2.0\/\" target=\"_blank\" rel=\"noopener\">CC BY 2.0<\/a> license<\/span><\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_3\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_3  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_2  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p><strong>Dealing with contractors is one of the hardest parts of investing in real estate.<\/strong><\/p>\n<p>The ones who actually return your calls promptly, show up on time for work, and complete jobs on schedule? They charge a pretty penny for that basic level of professionalism.<\/p>\n<p><strong>In fact, according to <a href=\"https:\/\/www.remodeling.hw.net\/cost-vs-value\/2019\/\" target=\"_blank\" rel=\"noopener\">Remodeling Magazine\u2019s 2019 home renovation report<\/a>, not a single home renovation had a positive return on investment. All costs are more than what they add to the home in value.<\/strong><\/p>\n<p>But real estate investors can\u2019t afford to make repairs and renovations with negative returns. <strong>Their very livelihood depends on making <a href=\"https:\/\/sparkrental.com\/home-improvements-with-the-best-roi\/\" target=\"_self\" rel=\"noopener\">home improvements with the highest ROI<\/a>\u00a0and earning a positive return on every property update!<\/strong><\/p>\n<p>This means they need to learn how to negotiate with contractors and how to manage them until the project is completed. It\u2019s one of the most important skills real estate investors have ever learned.<\/p>\n<p><strong>Here are useful tips to help you negotiate with contractors more effectively and get great work for a low price.<\/strong><\/p>\n<p>\u00a0<\/p>\n<h2>1. Start Building Relationships with Contractors Before You Need Them<\/h2>\n<p><strong>There\u2019s nothing worse than getting a phone call that a pipe burst and is blasting water all over your property \u2013 and not knowing who to call.<\/strong><\/p>\n<p>You end up frantically dialing whatever plumbers you can find in the Yellow Pages or Google. Never mind if they\u2019re any good, never mind what they charge. And, of course, the contractor can hear your desperation all over your voice.<\/p>\n<p><strong>It\u2019s all a recipe for being charged double.<\/strong><\/p>\n<p>Instead, start networking with contractors now, <em>before you need them<\/em>. However, you store your contacts and set up a folder for contractors and sub-folders for specializations like plumbers, electricians, HVAC specialists, roofers, and general handymen.<\/p>\n<p>Because no matter how clear the skies are today, you know it\u2019s going to rain sooner or later. The day will come when you need every single contractor under the sun. <strong>You prepare financially by budgeting for repairs in your properties\u2019 and personal <a href=\"https:\/\/sparkrental.com\/how-much-emergency-fund-should-i-have\/\" target=\"_self\" rel=\"noopener\">emergency fund<\/a>; you also need to prepare by gathering contractors before you need them.<\/strong><\/p>\n<p>Ask for referrals from friends, family members, neighbors, property managers, other landlords, and real estate investors. Search Angie\u2019s List and Google for the best-reviewed contractors in your area. Try them out on small jobs to see how they do.<\/p>\n<p><strong>The wider your network of contractors, the more choices you\u2019ll have and the greater your negotiating position.<\/strong><\/p>\n<p><strong><\/strong><\/p>\n<h3>Key Contractors for Property Maintenance<\/h3>\n<p><span>Speaking of which, below are the types of contractors that may come in handy for your property\u2019s future maintenance.<\/span><\/p>\n<p>Contractor<\/p>\n<p>Areas of Expertise<\/p>\n<p><span>General Contractor<\/span><\/p>\n<p><span>Overall project management, renovations, additions<\/span><\/p>\n<p><span>Plumber<\/span><\/p>\n<p><span>Water systems, drainage, pipe repairs<\/span><\/p>\n<p><span>Electrician<\/span><\/p>\n<p><span>Wiring, electrical systems, lighting installations<\/span><\/p>\n<p><span>HVAC Technician<\/span><\/p>\n<p><span>Heating, ventilation, air conditioning systems<\/span><\/p>\n<p><span>Roofer<\/span><\/p>\n<p><span>Roof repairs, replacements, gutter systems<\/span><\/p>\n<p><span>Carpenter<\/span><\/p>\n<p><span>Woodwork, framing, cabinetry, structural repairs<\/span><\/p>\n<p><span>Painter<\/span><\/p>\n<p><span>Interior and exterior painting, wallpapering<\/span><\/p>\n<p><span>Landscaper<\/span><\/p>\n<p><span>Lawn care, tree trimming, outdoor maintenance<\/span><\/p>\n<p><span>Pest Control Specialist<\/span><\/p>\n<p><span>Insect and rodent prevention and removal<\/span><\/p>\n<p><span>Mason<\/span><\/p>\n<p><span>Brickwork, stonework, concrete repairs<\/span><\/p>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n<h2>2. Plan Property Updates in the Slow Season<\/h2>\n<p><strong>When do you think you\u2019ll pay less to have your furnace serviced, in January or October?<\/strong><\/p>\n<p>HVAC contractors work around the clock in the sweltering heat of summer and the frigid cold of winter, fixing, servicing, and replacing furnaces, duct lines, and air conditioning condensers. <strong>They largely twiddle their thumbs in temperate spring and fall seasons when no one needs their heat or air conditioning.<\/strong><\/p>\n<p>\u201cBut Brian, sometimes the furnace just breaks down and needs immediate attention!\u201d<\/p>\n<p><strong>Sure. But it\u2019s a lot less likely to break down in January if you get preventative servicing in October.<\/strong> Like Scar says, \u201cBe Prepared.\u201d (Or is that the Boy Scouts? I can never remember.)<\/p>\n<p>While emergency repairs do occasionally occur, you can dramatically reduce your maintenance and repair costs by planning preventative maintenance and property upgrades and improvements in advance. Write out a schedule for the next 12 months, indicating which upgrades you want to conduct at which properties.<\/p>\n<p><strong>Then, plan them in the slow season, when contractors are hungry for work rather than swamped. If nothing else, this will help you budget better for them in advance.<\/strong><\/p>\n<p>\u00a0<\/p>\n<h2>3. Never, Ever Look Desperate<\/h2>\n<p><strong>If a contractor smells desperation on you, they\u2019ll double their quote. And contractors are great at sniffing out desperation.<\/strong><\/p>\n<p>So before calling a contractor, give yourself five minutes of meditation, breathing exercises, or whatever it takes to calm down if you\u2019re feeling anxious. When you call the contractor, speak slowly and casually. <strong>Explain the scope of the work in a precise but relaxed way.<\/strong><\/p>\n<p>Wrap up by explaining your timeline. Ideally, this shouldn\u2019t be \u201cyesterday.\u201d But if it is a more urgent repair, tell each contractor that you\u2019re collecting four or five quotes. <strong>While you do want to get the repair done as quickly as possible, you don\u2019t want rushed or shoddy work.<\/strong><\/p>\n<p>Ask for their best price and what their timetable looks like.<\/p>\n<p>As you talk to each contractor, ask questions and take notes about the job requirements. <strong>The better you understand the repairs yourself, the better informed you are to the next contractor you call.<\/strong><\/p>\n<p>\u00a0<\/p>\n<h2>4. Gather 3-5 Quotes, and Learn As You Go<\/h2>\n<p><strong>When you tell contractors that you\u2019re gathering four or five quotes, that shouldn\u2019t be a bluff.<\/strong> You need to actually do it, despite your protestations about how much work it is and how urgent the repairs are.<\/p>\n<p>To begin with, you have better odds of finding the right contractor for the job if you talk to five contractors instead of two. <strong>And with each quote you collect, you better understand what \u201cnormal\u201d pricing for the job looks like.<\/strong><\/p>\n<p>But talking to more contractors also helps you know what the hell you\u2019re talking about. <strong>When the first contractor comes out, you might only know that the air conditioning isn\u2019t blowing cold air like it should.<\/strong><\/p>\n<p>They look at your air conditioning condenser and give you their opinion on the source of the problem. <strong>When the second contractor comes out to the property, you can explain the symptoms of the problem and the previous contractor\u2019s diagnosis of the cause.<\/strong> This second contractor gives you even more information, which you then bring to the third contractor, and so on.<\/p>\n<p>You gain confidence with each contractor you speak with and can discuss the problem fluently and authoritatively, which puts you in a better position to negotiate.<\/p>\n<p><strong>Be sure to call the first contractor or two after speaking with the others so you can share what you\u2019ve learned and give them a chance to update their quote.<\/strong><\/p>\n<p>When the time comes to choose an option, you\u2019ll be well-informed and feel confident in your choice of contractors.<\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_5\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_4  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_divider et_pb_divider_0 et_pb_divider_position_ et_pb_space\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_3  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p><em>(article continues below)<\/em><\/p>\n<\/div><\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_4  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h5><strong>Real estate investments? Awesome. Being a landlord? Less fun.<\/strong><\/h5>\n<p>Learn how to earn 15-30% on passive real estate investments in one free class.<\/p>\n<\/div><\/div>\n<div class=\"et_pb_module et_pb_image et_pb_image_1\">\n<p>\t\t\t\t<a href=\"https:\/\/webinar.sparkrental.com\/registration-33\" target=\"_blank\" rel=\"noopener\"><span class=\"et_pb_image_wrap \"><\/span><\/a>\n\t\t\t<\/p><\/div>\n<div class=\"et_pb_button_module_wrapper et_pb_button_0_wrapper et_pb_button_alignment_center et_pb_module \">\n\t\t\t\t<a class=\"et_pb_button et_pb_button_0 et_pb_bg_layout_light\" href=\"https:\/\/webinar.sparkrental.com\/registration-33\" target=\"_blank\" rel=\"noopener\">Learn the Ropes in 1 Class<\/a>\n\t\t\t<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_6\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_5  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_video et_pb_video_0\">\n<div class=\"et_pb_video_box\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_7\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_6  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_divider et_pb_divider_1 et_pb_divider_position_ et_pb_space\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_divider_2 et_pb_space et_pb_divider_hidden\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_5  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h2>5. Collect Credentials &amp; Documentation <em>Before<\/em> Signing a Contract<\/h2>\n<p><strong>Before you sign on the dotted line, you\u2019re in a position of power, and contractors want to win your business.<\/strong> They\u2019ll offer up their credentials and documentation to make the sale, such as copies of their contractor\u2019s license, insurance bond, and customer references.<\/p>\n<p><strong>Afterward, contractors have no reason to give you any of that.<\/strong> They\u2019ll stonewall you because there\u2019s no upside for them in giving you that kind of leverage over them.<\/p>\n<p><strong>As you collect quotes, request copies of their license, insurance bond, and references.<\/strong> Spend ten minutes making phone calls to verify the license and insurance are valid and the references\u2019 feedback about the contractor. Ask penetrating questions about what they liked and didn\u2019t like about the contractor, the quality of their work, and whether they stayed on schedule and within budget.<\/p>\n<p><strong>Keep in mind that your municipality might require the use of licensed contractors for specific types of jobs.<\/strong> If you need to pull a permit, you need a licensed contractor.<\/p>\n<p>In the event of a dispute, you can file complaints or claims with the state licensing agency and bond insurance company.<strong> The license and bonds help protect you, the customer, so get them while you can.<\/strong><\/p>\n<p>\u00a0<\/p>\n<h2>6. Check with Other Clients, Too<\/h2>\n<p>Contractors cherry-pick their references, just like every company. T<strong>hey want to highlight their most satisfied clients.<\/strong><\/p>\n<p>However, you should also get a sense of how their average client feels about their work, not just their happiest clients. <strong>Ask contractors what jobs they\u2019re working on currently, and ask for the client\u2019s name and phone number.<\/strong> Call them up and get their feedback.<\/p>\n<p><strong>Also, take advantage of online review platforms like Yelp, Home Advisor, and Angie\u2019s List to read real customers\u2019 reviews and experiences<\/strong>. Every business has the occasional negative review, so don\u2019t discount a contractor over one client\u2019s rage fest.<\/p>\n<p><strong>If half the reviews are negative, that\u2019s a different story entirely.<\/strong><\/p>\n<p>\u00a0<\/p>\n<h2>7. Don\u2019t Share Your Budget<\/h2>\n<p><strong>Contractors want to get to know you before providing a quote. <\/strong>One way they do this is by asking for your budget; if the standard price for a given job is $2,000, and you answer that your budget is $4,000, what do you think the contractor will quote you?<\/p>\n<p><strong>Instead, you want to force the contractor to create the numbers.<\/strong> Ask them probing questions like how much they charge by the hour for labor and for a quote broken down by labor and materials (more on materials shortly).<\/p>\n<p>If the contractor insists on your budget, tell them your budget is $0, but since that\u2019s not realistic, you need their best price because you\u2019re collecting multiple quotes. <strong>Put the onus on them to come up with the quote for you.<\/strong><\/p>\n<p><strong><\/strong><\/p>\n<h3>Dealing with Contractor Pushback<\/h3>\n<p><span>Interestingly enough, even the smoothest negotiations can have bumps. So, you need to learn how to handle when a contractor starts pushing back.\u00a0<\/span><\/p>\n<p><span><strong>Keep your cool<\/strong>: Always\u2026Always stay calm and professional. A level head can keep the conversation on track, even when things heat up.<\/span><br \/>\n<span><strong>Stand your ground<\/strong>: Restate what you want and why. Sometimes, a quick reminder is all it takes to solve an issue.<\/span><br \/>\n<span><strong>Get them talking<\/strong>: If the contractor resists, tell them to explain their concerns to you and listen to them! However, expect one of two outcomes: uncovering the real issues or hearing petty excuses.<\/span><br \/>\n<span><strong>Be flexible<\/strong>: Tell them that you\u2019re open to alternatives when it\u2019s necessary. If there\u2019s a genuine problem, work on meeting halfway.<\/span><br \/>\n<span><strong>Remind them of your options<\/strong>: Casually mention you\u2019re considering other contractors if they can\u2019t take your request. This can nudge them to cooperate or show you it\u2019s time to move on.<\/span><br \/>\n<span><strong>Be ready to walk away<\/strong>: If they\u2019re still being unreasonable, don\u2019t be afraid to look elsewhere. There\u2019s not much you can do except find somewhere else.<\/span><\/p>\n<p><span>Remember, negotiations should aim to find a mutually beneficial solution.<\/span><\/p>\n<p>\u00a0<\/p>\n<h2>8. Get Aggressive About Structuring Draws<\/h2>\n<p><strong>If you\u2019re <a href=\"https:\/\/sparkrental.com\/financing-rental-property-renovations\/\" target=\"_self\" rel=\"noopener\">financing renovations<\/a>\u00a0or a large-scale renovation project costing thousands of dollars, the payment will\u00a0be released over several draws.<\/strong> After each set of work is done, you release money for that draw.<\/p>\n<p>The problem is that contractors want to structure the draws so that as much money gets released to them as early as possible.<strong> If possible, they want to get paid before doing the work<\/strong>. And you want the exact opposite: you want to pay them only after the work is completed to your satisfaction.<\/p>\n<p><strong>Unfortunately, they know their costs and trade far better than you do.<\/strong> So you get extremely aggressive about pushing money to the back end of the draw schedule.<\/p>\n<p>Release as little money as possible in the first few draws, for the maximum possible work. <strong>Hold as much money as you possibly can for the last draw, which will be released after the project is finished.<\/strong><\/p>\n<p>If the contractor gets ahead of you in terms of money, there\u2019s no reason for them to finish the job. <strong>They can simply walk away and leave you hanging with a half-finished job and more than half of your money.<\/strong><\/p>\n<p>\u00a0<\/p>\n<h2>9. Buy Materials Yourself<\/h2>\n<p>Far too many contractors charge a premium for materials and earn a margin.<strong> They quote you material costs at $2,000, even though they\u2019ll actually cost $1,400.<\/strong><\/p>\n<p>Don\u2019t play that game. Before negotiating with contractors, ask for the initial lump sum quote and then ask them to break it down by labor and materials. Then tell them you\u2019ll buy the materials yourself and simply pay them for labor. <strong>Watch their reaction carefully\u2014if they hesitate and try to argue, you know they inflated their materials quote.<\/strong><\/p>\n<p>It also removes their argument for an up-front \u201cmaterials\u201d deposit. <strong>It helps prevent them from getting ahead of you on the draw schedule.<\/strong><\/p>\n<p>After hiring a contractor, go with them to the supplier and buy the materials yourself. W<strong>atch what they buy carefully, and question any materials you don\u2019t understand or look out of place for the job.<\/strong><\/p>\n<p>As an extra perk, you can charge the cost of materials directly to your credit card, helping you partially finance the renovation costs. Depending on the size of the project, you may be looking at a lot of reward points!<\/p>\n<p><strong>And if you\u2019ve taken out an <a href=\"https:\/\/sparkrental.com\/investment-property-loans\/\" target=\"_self\" rel=\"noopener\">investment property loan<\/a> to finance the renovations, it gives you more flexibility to buy the materials on your own, with your credit card, and decide yourself when you want to reimburse yourself for it.<\/strong><\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_8\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_7  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_6  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p><em>(article continues below)<\/em><\/p>\n<\/div><\/div>\n<div class=\"et_pb_module et_pb_divider et_pb_divider_3 et_pb_divider_position_ et_pb_space\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_divider_4 et_pb_space et_pb_divider_hidden\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_7  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h5><a href=\"https:\/\/sparkrental.com\/investment-property-loans\/\" target=\"_self\" rel=\"noopener\">Want to compare investment property loans?<\/a><\/h5>\n<\/div><\/div>\n<div class=\"et_pb_module et_pb_divider_5 et_pb_space et_pb_divider_hidden\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_8  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p><a href=\"https:\/\/sparkrental.com\/investment-property-loans\/\" target=\"_self\" rel=\"noopener\"><\/a>What <strong>short-term fix-and-flip loan<\/strong> options are available nowadays?<\/p>\n<p>How about <strong>long-term rental property loans<\/strong>?<\/p>\n<p>We compare several buy-and-rehab lenders and several long-term landlord loans on LTV, interest rates, closing costs, income requirements and more.<\/p>\n<\/div><\/div>\n<div class=\"et_pb_button_module_wrapper et_pb_button_1_wrapper et_pb_button_alignment_center et_pb_module \">\n\t\t\t\t<a class=\"et_pb_button et_pb_button_1 et_pb_bg_layout_light\" href=\"https:\/\/sparkrental.com\/investment-property-loans\/\" target=\"_self\" rel=\"noopener\">Compare Investor Loans<\/a>\n\t\t\t<\/div>\n<div class=\"et_pb_module et_pb_divider_6 et_pb_space et_pb_divider_hidden\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div>\n<div class=\"et_pb_module et_pb_divider et_pb_divider_7 et_pb_divider_position_ et_pb_space\">\n<div class=\"et_pb_divider_internal\"><\/div>\n<\/div><\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_9\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_8  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_9  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h2>10. Demand a Discount for Sign Marketing<\/h2>\n<p><strong>Contractors want to use your property for free advertising.<\/strong> They want to put up their enormous, tacky yard sign saying, \u201cAnother great job done by XYZ Contractors!\u201d or some other such nonsense.<\/p>\n<p><strong>As you negotiate with contractors over price, ask if they want to market their business with a sign on your property.<\/strong> If they say yes, tell them that using your real estate for marketing isn\u2019t free, and tell them they can either compensate you for it through a discount on the quote or they can leave their huge sign in the truck.<\/p>\n<p><strong>They\u2019ll object, moan, and complain that it\u2019s \u201cstandard industry practice.\u201d<\/strong> Stand your ground, and respond: \u201cIt\u2019s my property, and using it for your marketing campaign isn\u2019t free. If you want to advertise on my property, it will cost $___ discounted off my quote.\u201d<\/p>\n<p>Your goal isn\u2019t to be their best friend or easiest customer.<strong> You aim to negotiate the best possible price for your repairs and renovations<\/strong>. That means being confrontational and holding firm, even if it\u2019s not in your nature.<\/p>\n<p>\u00a0<\/p>\n<h2>11. Pick Over Every Single Word of the Contract<\/h2>\n<p><strong>Is it boring? Yes. Is it dense legalese? Certainly.<\/strong><\/p>\n<p>Do you need to read it extremely carefully? Absolutely.<\/p>\n<p><strong>First, ensure the contract lists the contractor\u2019s license number and insurance bond information so there\u2019s no ambiguity later.<\/strong> Their license and bond policy are on the line, and they need to know it before they start work on your property.<\/p>\n<p>While every word of the contract is important, pay special attention to the list of materials used, the warranty on the work, the draw schedule, and the scheduled timetable.<strong> These should be outlined in clear, black-and-white language\u2014no legalese, no confusing prose, just the cold, hard facts.<\/strong><\/p>\n<p>And don\u2019t be afraid to get creative with the terms. <strong>Consider offering a bonus for completing the work early, by a specific date, and including a penalty for failing to complete the work by the listed deadline date.<\/strong> It might read something like, \u201cOwner agrees to pay a $500 early completion bonus if the work is satisfactorily completed by ______. The contractor agrees to provide a $500 late completion discount if the work is not completed by ______.\u201d<\/p>\n<p><strong>Structure the deal however you like to feel confident that the work will be completed on time and within budget.<\/strong> But do it before signing while you still have the power to negotiate with the contractor.<\/p>\n<p>\u00a0<\/p>\n<h2>12. Carefully Manage Contractors Until the Project Is Complete<\/h2>\n<p>Make no mistake: hiring a contractor isn\u2019t a passive activity. <strong>Screening, hiring, and negotiating with contractors all take a <em>lot<\/em> of work.<\/strong><\/p>\n<p>And it doesn\u2019t stop when you sign with a contractor. <strong>You need to stay on top of them daily until the work is finished to your satisfaction.<\/strong> That means visiting the property every day to check on the work.<\/p>\n<p>While there, ask the contractor how the project is going. <strong>Leave it open-ended first, then ask whether they\u2019re on schedule<\/strong>. If they hesitate at all, pounce on them immediately.<\/p>\n<p>\u201cIt sounds like you\u2019re not 100% confident that you\u2019ll finish this job on time. Keeping this project on schedule is extremely important to me, so let me ask again: What do <em>you<\/em> need to do to make sure this project finishes on schedule?\u201d<\/p>\n<p><strong>My experience with contractors is that they wander off schedule and over budget when left to their own devices.<\/strong> Therefore, it\u2019s your job to ensure that doesn\u2019t happen, and it requires diligent, attentive management.<\/p>\n<p>Because ultimately, just because you\u2019ve finished negotiating with the contractor and signed a contract doesn\u2019t mean you have what you want. <strong>What you\u2019re paying for is the result, the finished work at a high level of quality.<\/strong> And until you get what you\u2019re paying for, you need to stay on top of the contractor to ensure it happens.<\/p>\n<p><strong>It\u2019s not fun. It\u2019s not easy. If you wanted easy, you should have found another profession.<\/strong><\/p>\n<p><strong><\/strong><\/p>\n<h3>Communication Tips for On-going Projects<\/h3>\n<p><span>Once work begins, clear communication is important to keep the project on track. For the sake of your property, make it a duty to ensure that everyone stays on the same page, and this can be done through multiple means aside from regular check-ins.<\/span><\/p>\n<p><span> When discussing changes or concerns, give them the full details. The clearer you are, the less likely there will be mix-ups on your project.<\/span><br \/>\n<span> Write down all the important conversations and decisions, or, better yet, record them with an audio recorder. Trust me, you\u2019ll thank yourself later if things get sticky.<\/span><br \/>\n<span> Don\u2019t let minor issues turn into massive disasters. Respond quickly to keep your project progressing.<\/span><br \/>\n<span> Stay firm, but remember to give props when they\u2019re due. A little goodwill goes a long way when you need to iron out conflicts.<\/span><br \/>\n<span> Agree on how and when you\u2019ll touch base. That way, everyone\u2019s on the same page about staying connected.<\/span><\/p>\n<p><span>The goal here is to find a solution that works for everyone. You\u2019ll be surprised how clear communication usually resolves most disagreements.<\/span><\/p>\n<p>\u00a0<\/p>\n<h2>Pitfalls to Avoid When Negotiating<\/h2>\n<p><span>It\u2019s easy to fall into common traps that can weaken your position when negotiating with contractors, especially when you\u2019re not the \u201cassertive\u201d kind of person or a real estate newbie. <strong>Awareness of these pitfalls can help you go through discussions and secure a better outcome for your project.<\/strong><\/span><\/p>\n<p><span><strong>Announcing your budget<\/strong>: I\u2019ve mentioned this and will mention it again. Keep that info under wraps. If you reveal your maximum budget, contractors will inflate their prices. Why? <strong>Because you indirectly allow them to.<\/strong><\/span><\/p>\n<p><span><strong>Skipping the paperwork<\/strong>: Verbal agreements are a no-no! If you want to avoid headaches, always get a detailed written contract. <strong>That way, you can avoid any \u201che said, she said\u201d drama down the road.<\/strong><\/span><\/p>\n<p><span><strong>Speeding through decisions<\/strong>: Don\u2019t rush it, people. Come one. Take your sweet time to weigh all the options. Trust me, as I\u2019ve fallen into this pitfall several times. <strong>Feeling pressured to decide ASAP will most likely lead to buyer\u2019s remorse.<\/strong><\/span><\/p>\n<p><span><strong>Opting for the cheapest ones:<\/strong> I know. It\u2019s tempting to go for the most affordable option, but don\u2019t forget that the quality of their work is the bigger deal. I\u2019ve dealt with many contractors in the past, and boy, the likelihood of getting shoddy work is much higher with the cheapest ones. <strong>I\u2019ve learned my lesson: Just find the perfect balance.\u00a0<\/strong><\/span><\/p>\n<p><span><strong>Ignoring potential roadblocks<\/strong>: Maya Angelou, a famous author, once wrote the line, <strong>\u201cHope for the best and be prepared for the worst.\u201d<\/strong> The same principle can be applied when dealing with contractors. Hash out how you\u2019ll handle delays or challenges before they happen to avoid future misunderstandings.<\/span><\/p>\n<p><strong>Trust me, you\u2019ll be better positioned for a fair agreement when you learn to avoid these common mistakes.\u00a0<\/strong><\/p>\n<p><strong><\/strong><\/p>\n<h2>Final Thoughts<\/h2>\n<p><strong>Real estate investors and even homeowners sometimes need to work with contractors.<\/strong> Investing in and owning a physical rather than a paper asset is a reality.<\/p>\n<p><strong>You need to budget for repairs and maintenance when you <a href=\"https:\/\/sparkrental.com\/calculating-cash-flow-investing-rental-property\/\" target=\"_self\" rel=\"noopener\">forecast a property\u2019s cash flow<\/a> with a <a href=\"https:\/\/sparkrental.com\/rental-property-roi-calculator\/\" target=\"_self\" rel=\"noopener\">rental income calculator<\/a>.<\/strong> When you decide to <a href=\"https:\/\/sparkrental.com\/build-real-estate-equity-faster\/\" target=\"_self\" rel=\"noopener\">build real estate equity faster<\/a>, one of the primary ways to improve the property is to raise its value.<\/p>\n<p><strong>If you want to <a href=\"https:\/\/sparkrental.com\/how-to-find-good-deals-on-investment-properties\/\" target=\"_self\" rel=\"noopener\">find good deals on investment properties<\/a>, that usually involves buying fixer-uppers that need work.<\/strong><\/p>\n<p>All of these require you to learn how to negotiate with contractors. <strong>How to hire them, screen them, and manage them effectively<\/strong>. And that, in turn, means holding them accountable and being more confrontational and firmer than you\u2019re used to being with the maid or nanny or other people you hire.<\/p>\n<p>Welcome to being a real estate investor!<\/p>\n<p><em><\/em><\/p>\n<p><em><\/em><\/p>\n<p><em>What have your experiences been with negotiating with contractors? What\u2019s your favorite tip for how to negotiate with contractors? Share your thoughts below!<br \/><\/em><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<h4>The More You Learn, the More You Earn:<\/h4>\n<\/div><\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_10\">\n<div class=\"et_pb_column et_pb_column_1_3 et_pb_column_9  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_text et_pb_text_10  et_pb_text_align_center et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<div class=\"et_pb_text et_pb_module et_pb_bg_layout_light et_pb_text_align_center et_pb_text_4\">\n<div class=\"et_pb_image_container\"><a class=\"entry-featured-image-url\" href=\"https:\/\/sparkrental.com\/real-estate-vs-stocks-fi-early-retirement\/\" target=\"_self\" rel=\"noopener\">  <\/a><\/div>\n<h5 class=\"entry-title\"><a href=\"https:\/\/sparkrental.com\/real-estate-vs-stocks-fi-early-retirement\/\" target=\"_self\" rel=\"noopener\">Real Estate vs. Stocks: Which Is Faster for FI &amp; Early Retirement?<\/a><\/h5>\n<\/div>\n<\/div><\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_3 et_pb_column_10  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_text et_pb_text_11  et_pb_text_align_center et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<div class=\"et_pb_text et_pb_module et_pb_bg_layout_light et_pb_text_align_center et_pb_text_5\">\n<div class=\"et_pb_text et_pb_module et_pb_bg_layout_light et_pb_text_align_center et_pb_text_4\">\n<div class=\"et_pb_text_inner\">\n<div class=\"et_pb_text et_pb_module et_pb_bg_layout_light et_pb_text_align_center et_pb_text_4\">\n<div class=\"et_pb_text et_pb_module et_pb_bg_layout_light et_pb_text_align_center et_pb_text_4\">\n<div class=\"et_pb_image_container\"><a class=\"entry-featured-image-url\" href=\"https:\/\/sparkrental.com\/16-tax-deductions-rental-properties-guide\/\" target=\"_self\" rel=\"noopener\">  <\/a><\/div>\n<h5 class=\"entry-title\"><a href=\"https:\/\/sparkrental.com\/16-tax-deductions-rental-properties-guide\/\" target=\"_self\" rel=\"noopener\">Rental Property Deduction Checklist: 20 Tax Deductions for Landlords<\/a><\/h5>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_3 et_pb_column_11  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_12  et_pb_text_align_center et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<div class=\"et_pb_image_container\"><a href=\"https:\/\/sparkrental.com\/build-real-estate-equity-faster\/\" class=\"entry-featured-image-url\" target=\"_self\" rel=\"noopener\">  <span class=\"et_overlay et_pb_inline_icon\"><\/span> <\/a><\/div>\n<h5 class=\"entry-title\"><a href=\"https:\/\/sparkrental.com\/build-real-estate-equity-faster\/\" target=\"_self\" rel=\"noopener\">Building Equity: 10 Ways to Create Real Estate Equity Faster<\/a><\/h5>\n<\/div><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_section et_pb_section_2 et_section_regular\">\n<div class=\"et_pb_row et_pb_row_11\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_12  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_13  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h4>I want to know more about\u2026<\/h4>\n<\/div><\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row et_pb_row_12\">\n<div class=\"et_pb_column et_pb_column_1_4 et_pb_column_13  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_blurb et_pb_blurb_0  et_pb_text_align_center  et_pb_blurb_position_top et_pb_bg_layout_light\">\n<div class=\"et_pb_blurb_content\">\n<div class=\"et_pb_main_blurb_image\"><a href=\"https:\/\/sparkrental.com\/advertising-tenant-screening-learning-zone\/\" target=\"_self\" rel=\"noopener\"><span class=\"et_pb_image_wrap\"><span class=\"et-waypoint et_pb_animation_top et_pb_animation_top_tablet et_pb_animation_top_phone et-pb-icon\">Z<\/span><\/span><\/a><\/div>\n<div class=\"et_pb_blurb_container\">\n<h4 class=\"et_pb_module_header\"><a href=\"https:\/\/sparkrental.com\/advertising-tenant-screening-learning-zone\/\" target=\"_self\" rel=\"noopener\">Advertising &amp; Tenant Screening<\/a><\/h4>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_4 et_pb_column_14  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_blurb et_pb_blurb_1  et_pb_text_align_center  et_pb_blurb_position_top et_pb_bg_layout_light\">\n<div class=\"et_pb_blurb_content\">\n<div class=\"et_pb_main_blurb_image\"><a href=\"https:\/\/sparkrental.com\/leasing-new-tenancies-learning-zone\/\" target=\"_self\" rel=\"noopener\"><span class=\"et_pb_image_wrap\"><span class=\"et-waypoint et_pb_animation_top et_pb_animation_top_tablet et_pb_animation_top_phone et-pb-icon\">l<\/span><\/span><\/a><\/div>\n<div class=\"et_pb_blurb_container\">\n<h4 class=\"et_pb_module_header\"><a href=\"https:\/\/sparkrental.com\/leasing-new-tenancies-learning-zone\/\" target=\"_self\" rel=\"noopener\">Leasing Issues<\/a><\/h4>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_4 et_pb_column_15  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_blurb et_pb_blurb_2  et_pb_text_align_center  et_pb_blurb_position_top et_pb_bg_layout_light\">\n<div class=\"et_pb_blurb_content\">\n<div class=\"et_pb_main_blurb_image\"><a href=\"https:\/\/sparkrental.com\/renter-property-management-learning-zone\/\" target=\"_self\" rel=\"noopener\"><span class=\"et_pb_image_wrap\"><span class=\"et-waypoint et_pb_animation_top et_pb_animation_top_tablet et_pb_animation_top_phone et-pb-icon\">\ue035<\/span><\/span><\/a><\/div>\n<div class=\"et_pb_blurb_container\">\n<h4 class=\"et_pb_module_header\"><a href=\"https:\/\/sparkrental.com\/renter-property-management-learning-zone\/\" target=\"_self\" rel=\"noopener\">Renter &amp; Property Management<\/a><\/h4>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_4 et_pb_column_16  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_blurb et_pb_blurb_3  et_pb_text_align_center  et_pb_blurb_position_top et_pb_bg_layout_light\">\n<div class=\"et_pb_blurb_content\">\n<div class=\"et_pb_main_blurb_image\"><a href=\"https:\/\/sparkrental.com\/passive-income-personal-finance-learning-zone\/\" target=\"_self\" rel=\"noopener\"><span class=\"et_pb_image_wrap\"><span class=\"et-waypoint et_pb_animation_top et_pb_animation_top_tablet et_pb_animation_top_phone et-pb-icon\">\ue0ed<\/span><\/span><\/a><\/div>\n<div class=\"et_pb_blurb_container\">\n<h4 class=\"et_pb_module_header\"><a href=\"https:\/\/sparkrental.com\/passive-income-personal-finance-learning-zone\/\" target=\"_self\" rel=\"noopener\">Passive Income &amp; Personal Finance<\/a><\/h4>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_section et_pb_section_3 et_section_regular\">\n<div class=\"et_pb_row et_pb_row_13\">\n<div class=\"et_pb_column et_pb_column_1_2 et_pb_column_17  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_text et_pb_text_14  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h4>Connect with us on social!<\/h4>\n<\/div><\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_6 et_pb_column_18  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_image et_pb_image_2\">\n<p>\t\t\t\t<a href=\"https:\/\/www.facebook.com\/sparkrental\/\" target=\"_blank\" rel=\"noopener\"><span class=\"et_pb_image_wrap \"><\/span><\/a>\n\t\t\t<\/p><\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_6 et_pb_column_19  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_image et_pb_image_3\">\n<p>\t\t\t\t<a href=\"https:\/\/www.instagram.com\/sparkrental\/\" target=\"_blank\" rel=\"noopener\"><span class=\"et_pb_image_wrap \"><\/span><\/a>\n\t\t\t<\/p><\/div>\n<\/div>\n<div class=\"et_pb_column et_pb_column_1_6 et_pb_column_20  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_image et_pb_image_4 et_pb_image_sticky\">\n<p>\t\t\t\t<a href=\"https:\/\/www.twitter.com\/sparkrental\/\" target=\"_blank\" rel=\"noopener\"><span class=\"et_pb_image_wrap \"><\/span><\/a>\n\t\t\t<\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/sparkrental.com\/how-to-negotiate-with-contractors\/\" target=\"_self\" rel=\"noopener\">How to Negotiate with Contractors: The Definitive Guide<\/a> appeared first on <a href=\"https:\/\/sparkrental.com\/\" target=\"_self\" rel=\"noopener\">SparkRental<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>The Big Picture On How to Negotiate With Contractors in Real Estate: Build relationships with contractors before you need them. Create a network of trusted professionals for different specialties to prepare you for issues. Gather 3-5 quotes for each job, learning more about the work required with each conversation. It\u2019ll you negotiate from a more [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management"],"_links":{"self":[{"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=\/wp\/v2\/posts\/151"}],"collection":[{"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=151"}],"version-history":[{"count":0,"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=\/wp\/v2\/posts\/151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=\/wp\/v2\/media\/152"}],"wp:attachment":[{"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/myrealestatearticle.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}