On the up: What will higher interest rates mean for real estate investors in New Zealand and further afield?
The Land of the Long White Cloud is shaping up to raise rates and the country may well be a bellwether for the Australia...
How can you be sure that the tradespeople your property manager is recommending are the best and most cost-effective out there?
Blogger: Fiona Blayney, managing director, Blayney Potential Plus
When the hot water system bursts in the middle of the night, you want to feel secure that your property manager has developed a relationship with quality, honest, reliable and cost-effective tradespeople. But how do you know this is the case?
One of the most important tools a property management company has is their team of trusty tradespeople. After all, this group of people is an extension of the property manager’s service to you, and the cost of repairs and maintenance to your property have an effect on the annual financial return on your investment.
SELECTION OF TRADES
A reputable agency realises the importance of the tradesperson relationship and has a program in place to ensure both the standard of work is maintained and the fees are fair and reasonable.
It is of utmost importance that all works to your property are completed by a licensed and insured tradesperson. Your property manager will ensure they hold a copy of the tradesperson’s licence, together with a current copy of the business’ insurance and worker’s compensation certificates.
Utilising an unqualified and uninsured tradesperson may be cheaper in the short term, but it will more than likely result in poor workmanship.
Utilising the same tradespeople regularly allows the property manager to form relationships and negotiate a standard set of fees. These fees may include a reduced rate for their clients on the basis of the volume of work they receive, as well as timely payment.
Together with the legal documentation the agency may hold a copy of the standard fees, which can include call-out fee estimates for small jobs and quoting charges.
YOUR COST EXPECTATIONS
It is not unusual for a tradesperson to charge for quotes for small jobs. In some cases, it can take almost the same amount of time to do the quote as it would have taken to do the job, so most trades will only offer a free quote on larger jobs.
Whenever you are concerned about the cost of works exceeding your expectations, consider obtaining a rough estimate up front and agreeing on a fee per hour with a maximum limit.
When the tradesperson is on site, should the price go over and above this, request a quote.
There will always be someone cheaper, who is willing to work for less per hour. You can source and use cheaper materials, or use less experienced, cheaper labour.
State to state, suburb to suburb, supply and demand of trade services change and as such, the fee structure differs.
In my experience, your agent has selected the tradespeople for a combination of factors – reasonable pricing, reliability, efficiency, speed of service, professionalism, quality of work, and the required licences and insurance.
The standard of your tradespeople is a reflection of your care for the property; it sends a direct message of your expectations of the tenant. If you don’t trust the information your property manager is giving you, you have bigger problems and it may be time to find someone you do trust.