Utilising contractors as a landlordFeature of the week
Landlords come in many forms, ranging from those who own a single rental property, which gives them a little extra income in addition to their earnings from a full time job, to professionals with a portfolio of houses, apartments and shops.
One thing they all have in common is that at some point they will find it necessary to carry out repairs to keep their assets in a habitable and safe condition. They may also wish to implement improvements to increase their property’s attractiveness to prospective tenants.
Some landlords prefer to hand over responsibility for carrying out all repairs and maintenance to a property management company, whilst others opt to do at least some of the work themselves. In the latter case, tasks that are beyond their capabilities will often be contracted out to professional tradespeople.
Benefits of hiring an independent contractor
While employing the services of a property management company eliminates much of the maintenance work a landlord would otherwise be obliged to organise themselves, the fees charged can be significant and have a negative impact on profit margins.
Conversely, attempting to carry out essential repair work on a DIY basis can lead to issues with quality of workmanship, which can adversely affect the rentability of the property or even result in it failing to meet minimum rental standards.
By employing a reputable contractor to carry out essential maintenance and improvements, landlords can be sure that the work will be of a high standard and comply with current building and health and safety regulations. It should also be noted that all gas and electrical work must be undertaken by contractors who are suitably trained and certified.
In situations where the landlord is dissatisfied with the quality of workmanship, they can insist that the contractor rectifies the problem and if necessary resort to legal action to claim damages.
Finding and hiring a contractor
There are literally hundreds of contractors vying for work, so finding the right one may take a little time and patience. However, it is far better to spend a couple of hours doing this than having to deal with the consequences of employing a cowboy outfit.
By far the best solution is to use a contractor who has been recommended by a friend or family member. Failing that, check out the reviews published on independent comparison websites. There are also trade organisations that provide lists of registered and approved contractors.
Have three contractors take a look at what is required and ask them to provide quotes. Remember, the cheapest might not necessarily be the one to accept, so compare them in detail and if necessary ask for clarification.
Confirm the price and estimated completion date with the chosen contractor in writing and ask for a written reply, along with copies of his or her insurance cover and relevant certificates.
Paying the contractor
How the contractor is to be reimbursed largely depends on their status; for example, a limited company is likely to be happy to be paid by cheque or credit/debit card. Reputable contractors will usually require a deposit, but will not expect the balance until the work has been completed.
Sole traders may ask for cash, which could mean they are trying to avoid paying tax. If in any doubt, many contractors employ umbrella companies to handle their administration and payroll processes, and they have websites offering useful advice on the most appropriate way to pay.
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Photo: U.S. Army Corps of Engineering