{"id":391,"date":"2021-04-19T02:47:45","date_gmt":"2021-04-19T02:47:45","guid":{"rendered":"https:\/\/wordpress-655153-2137993.cloudwaysapps.com\/?p=391"},"modified":"2021-04-23T02:37:37","modified_gmt":"2021-04-23T02:37:37","slug":"msfire21","status":"publish","type":"post","link":"https:\/\/msfiremama.com\/msfire21\/","title":{"rendered":"Renovations Part 3: Contracting Renovation Work"},"content":{"rendered":"\n
Now that you know what work needs to be done, who should do it and you\u2019ve received your bids, it\u2019s time to select the business to do your renovation. <\/p>\n\n\n\n
Whether it\u2019s a handyman, a general contractor or an individual trade (electrician, plumber, etc), the most important thing you can do is set expectations. <\/p>\n\n\n\n
Scope<\/strong><\/p>\n\n\n\n Part 2 of this series<\/a> dived into this category so we won\u2019t touch on it here. The main point is that you need to make sure what you expect to be done and what the contractor plans to do are in alignment. As discussed in the previous post: generalize. quantify. specify.<\/em><\/p>\n\n\n\n Schedule<\/strong><\/p>\n\n\n\n Time is money as the adage goes and that is true for both you and your contractor. Any kind of agreement you make needs to include the start and end dates so you can hold the contractor accountable and you can queue up your property manager (or yourself if you self-manage) to plan showings to rent out your property.<\/p>\n\n\n\n You can use several strategies to establish the timeline:<\/p>\n\n\n\n If the completion date you\u2019d like and the contractor provided schedule are vastly different, you can ask questions to find out if a quicker turnaround is possible. This may mean you could pay more for a contractor to dedicate more man power to your job. For smaller jobs, it may not be feasible or cost-effective since you can only fit so many people in a space. You can provide a financial incentive in the form of a bonus for every day the work is completed ahead of schedule. David Greene talks a lot about this in his books about Long Distance Real Estate Investing<\/a> (specifically in Chapter 8) and his BRRRR<\/a> book.<\/p>\n\n\n\n Conversely, it\u2019s common practice to also set up a penalty for any time the contractor exceeds over the agreed upon schedule. With the contractor I worked with most recently, for example, our agreement included $50 a day for late completion. My rents are usually around $700 to 950 per unit so while I would rather have my place rented than have a credit for lateness, the liquidated damages for not being able to rent out my place while the renovation continues works out in my favor. <\/p>\n\n\n\n