Have you ever tried to find the “Right” vendor for your property? There are so many aspects to look at when trying to find the perfect vendor. Clifford Hockley, President of Bluestone & Hockley Real Estate Services, wrote a fantastic article, published on the SVN blog, about choosing the right vendor. In this article, he talks about Property Management Challenges, Vendor Pricing, Scope/Specifications (Specs), Vendor Relationships and he also provides a link for more reading about the benefits of franchising for property managers. This is a very thorough and easy to read article. If any of the topics above are interesting to you, then keep on reading!
In our many years as a property manager we have faced numerous challenges with our vendors. Here are a few examples:
- A sewage pump failed over the weekend and we called a vendor who wanted $5,000 to replace the sump pump. The pump cost was $1,000. We needed it replaced but ended up negotiating with the vendor to reduce the price. This company paid the technicians half of everything they brought in as a commission. You can imagine how they priced their emergency response.
- A roofer installed a new roof. They issued a warranty on the roof. Within a year, the new roof started leaking and unfortunately the roofer went out of business, so the warranty was worthless.
- A painter bid a project and asked for half upfront to cover painting expenses. After we paid half upfront, he ignored the project, took the money and went on vacation. We ended up litigating.
- A drain cleaning company cleared a drain line. Unfortunately, the cutting tool on their drain cleaner destroyed the pipe. Was the pipe old? Or did they destroy the pipe?
As you can tell, there is room for error…and errors cost you money. Your goal is to limit the errors and in turn improve property operating returns.
Most of us are driven by vendor pricing. We want the least expensive price we can find — that is just natural. Unfortunately, the lowest price often produces substandard work due to lack of licensing or insurance, miscommunication or plain old ….
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