How To Hire Great Contractors For Your Rental Properties?

Headshot of RealWealth Co-founder Kathy Fettke. smiling.

Kathy Fettke


Fixing up property is one way to “force equity growth.” (That’s just a fancy way of saying, the value of the property increases through your fix-up efforts.)

Here are some tips we have for protecting your wallet in the process.

The Art of Hiring Contractors

When you need to do repairs on your rental property, we recommend you choose to work with a licensed contractor. Licensed contractors know the codes, have crews ready to go, and will oversee the work of subcontractors or specialized tradesman in electric, HVAC, plumbing, roofing, etc.

While subcontractors and skilled handymen may be less expensive, it’s best to have a local expert supervise their work if you can’t be there to do it yourself.

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Some contractors will ask for half down and some actually ask for the whole amount of the job upfront. NEVER pay for work upfront! This is a sure-fire way to face delays and unfinished projects since there is no incentive for the contractor to get the job done.

It is customary to pay approximately 10% upfront to show good faith. You may not have to pay anything upfront if you sign a contract with a licensed contractor. They often have their own lines of commercial credit to buy materials and get started.

If the contractor needs money to buy supplies, offer to have the contractor go to the supply store, get the materials and have the pro desk call you and take a credit card over the phone once you verify the supplies the contractor is ordering. Never give any contractor, sub-contractor or handyman your credit card information!

We recommend that you find a contractor who will give you an itemized quotation – not a contract- for repairs and service. You need to know exactly where your dollars are going to be spent. Vague or fuzzy quotes most likely means the contractor may be looking for ways to skim off the top.

When a contractor says, the total cost for a completely new kitchen will be $5,000 ask them to break it down. Below is an example of how things should be itemized:


  • New light fixture $35
  • New Counters $300
  • Metallic sink and faucet attachment $225
  • All new ceramic tile flooring $300
  • New plumbing attachments $50
  • 3 new outlets. (2GFI’s 3 switches) $80
  • All new low grade cabinets (wood) $800

Total $1,790

How do you pay the contractor if you are not in town to verify the work or repairs?

From the first conversation, you must make it clear to the contractor that you want video updates of work being done and emailed to you. Do not rely on photos. Photos can be taken from a different house entirely or altered to mask any wrong doing on the contractors part. There can be no mistaking the contractor walking up the front of your house and show the completed work inside.

If the contractor refuses to cooperate or even if they take several days to get the videos to you, have someone like a property manager physically go out and verify the work.

Based on their report, keep the contractor or cancel your contract and find someone else immediately.

Here are some things you can do when interviewing contractors:

>Look at past project photos
>Ask for local references
>Notice if they return phone calls promptly
>See if they delivered the quote on professional letterhead
>Check with the county website to find out if their last name shows up on any criminal dockets or civil dockets.
>Ask property managers if they know anything about the contractor you’re interviewing.
>Cross reference their company name with the Secretary of State website and see if they exist at all, and if so, check their name against the corporate documents.
>Check status with the Better Business Bureau
>Google their name or company mane.
>Before they start the job, require and request a copy of the drivers license, insurance and bond. If they do not have insurance, it will be difficult to collect if things go wrong.
>Make sure they have contractors insurance for a minimum of $1,000,000 coverage
>Ask to see their contractor license

And most importantly, listen to your gut. Is something not quite right? I sometimes ask myself, “Is this someone I’d want to hang out with for the weekend” If not, there may be a reason. Pay attention to it.

And remember, if you have a property manager taking care of your asset, they will do this work for you. Just be sure to verify it “as a second pair of eyes.”

At RealWealth, we have a list of real estate companies across the country who find property at wholesale prices, renovate them to rent-ready standards, and sell to investors with a tenant and property management in place for a “turn-key” investment. Let us know if you’d like us to send you that list.

Headshot of RealWealth Co-founder Kathy Fettke. smiling.
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