For many investors and developers, having a project that goes over-budget, or takes longer than expected is a rite of passage. As a statistic the number of projects that go awry far outstrips those that go well, so how do you minimize the risks?
I have carried out 100’s of refurbishment projects and to this day have rarely had major issues, so here are my top 10 tips for working with contractors.
1. Value Time
If you value your time then you should value other people’s time too. A contractor is going to have to do a significant amount of work in order to properly price up a project, so if necessary pay them for an itemized quote, or for making additional site visits pre-project. In doing this you are showing respect. Respect is a good place to start a relationship.
2. Have a Plan
Whatever Project you’re doing, if you don’t have a detailed plan then your contractor will have to fill in the gaps…and that’s the last thing you want. A proper plan should clearly show where furniture is going to be positioned, where sockets and lights are going and if you are moving or adding walls, measurements need to be exact. A plan will give both you and a contractor a simple reference point.
3. Create a Schedule of Works
It is highly unlikely you are going to receive a fully itemized quote from a contractor, and yet without one, you can’t agree on payment terms. A schedule of works acts as an itemization of a project and the contractor can then quote on the items on the schedule. So voila, an itemized quote. Any contract between you and the contractor can be based on an agreed schedule.
4. Reference Your Contractor
We all reference tenants and yet the time and money lost through the employment of an unprofessional or rogue contractor can be far higher. So reference your contractor. Visit a current project, talk to at least two previous clients.
5. Be a Good Boss
Think about what makes a good boss… being positive, decisive, constructive and kind, while also being firm and professional. A boss doesn’t just bark commands and then retire into a back office until a project is complete. A boss addressed issues quickly and knows what they want from their staff. A contractor works for you and you are the boss. If you are a weak manager you will lose the respect of your employees.
6. Don’t Necessarily Go for the Cheapest Quote
If you don’t have a Schedule of Works quite often the cheapest quote doesn’t include the things you are expecting, so it’s actually more expensive than you think. The cheapest quote often ends up costing way more than the more expensive quotes you avoided to try and save money in the first place.
7. Make Sure Your Contractor is Suitably Qualified
Many projects require more skilled labor, Periodic electrical inspections, asbestos checks, a/v wiring, un-vented cylinders for en-suite bathrooms, fire alarms, security systems, building regulations advice, even interior design, they all require a level of experience and expertise. If a contractor is advising you, are they qualified to do so? If not, then their advice should not be taken and you should seek the advice of someone more appropriate.
8. Visit the Site Regularly
Once work starts you should go to the site at least once a week, preferably twice. When you go, send a text before you are setting off to check whether someone is on site and ask if anyone wants a McDonalds or Tea/coffee. A site visit is an opportunity to build rapport and to actually check if the contractor is on-site working.
9. Agree a Payment Schedule
Prior to work starting you should sit down with a contractor and agree stages at which payments are invoiced. These stages should be points at which certain works have been completed. Never pay someone on a daily rate, agree a price for works, then schedule payments for works completed, only release funds once works have been done.
10. Network to Find Your ‘Power Team’
It’s so much easier to meet the people you need if you network. I’ve been to countless property meetings and often find building contractors in attendance. If you meet a contractor then take the time to say hi and take their card, you’ll probably need it. When you do eventually call you will probably find many of them will be too busy, so make sure you make contact with as many contractors as possible.