When it comes to investment properties, many decisions need to be made to protect and grow your asset. One of the most important is when to hire a real estate contractor. There are three main options: going the DIY route, acting as your own general contractor and managing subcontractors, or hiring a real estate contractor to manage the entire process for you. Each option has its own set of pros and cons, which we’ll explore in today’s real estate investor training article.
There are two main reasons why some investors choose to go the DIY route. The first is cost. You can save on labor costs by doing the work yourself or hiring a friend or family member. The second reason is control. When you’re in charge of the project, you can complete your work according to your standards and timeline.
However, there are also some drawbacks to going the DIY route. The first is opportunity cost. Your time is valuable, and if you’re spending it working on a renovation project, that’s time that you’re not spending making deals or growing your business in other ways. The second drawback is risk. If something goes wrong during the renovation process, you could be held liable since you are in charge.
For these reasons, weighing the pros and cons of going the DIY route is essential. If you have the time and expertise to do the job right, it can be a great way to save on costs. But if you’re not sure you can handle all the responsibility, it might be best to leave it to the professionals.
Hiring your own subcontractors can be a good middle ground between going the DIY route and hiring a real estate contractor to manage everything. With this option, you would act as your own general contractor and manage your sub-contractor team. This can be a good option if you have experience in construction or home remodeling and have a good working relationship with reliable subcontractors.
However, there are also some drawbacks to this option. The first is that it can be time-consuming to manage a team of subcontractors. You’ll need to coordinate schedules, make sure everyone is on the same page, and troubleshoot any problems. You’ll also need to be on-site regularly to oversee the work and ensure everything is going according to plan. This can be a full-time job, so you won’t have as much time to focus on other aspects of your business. The second drawback is that you’re still taking on a lot of risk. You could still be held liable if something goes wrong. And if you hire the wrong subcontractors, you could have to pay more to get a job done than you would have if you hired an expert real estate contractor to manage the process for you.
As with the DIY option, weighing the pros and cons of acting as your own general contractor before deciding is essential. You’ll need to be sure that you have the time and ability to hire and manage all the subcontractors you need, which can essentially equal a full-time human resources role.
The third option is to hire a real estate contractor to manage the entire process for you. This can be a good option if you’re not experienced in construction or home remodeling and want to ensure that the job is done right without having to worry about managing subcontractors or being on site all the time.
One advantage of this option is that it will save you a lot of time. You won’t need to coordinate schedules, manage budgets, or be on site regularly since that will all be taken care of by your real estate contractor. This frees up your time to focus on other aspects of your business. Another advantage is that you won’t have to worry about potential liability issues since your contractor will be responsible for the workers and the quality of their work.
However, there are also some disadvantages to this approach. The first is that it will be more expensive since you’ll pay for the contractor’s time and expertise. The second is that you won’t have as much control over the project since you’ll rely on your contractor to make all the decisions. If you’re not comfortable giving up that control level, this might not be the right option for you.
If you decide to hire a real estate contractor, there are a few things that you should keep in mind. The first is to make sure that you choose someone who is experienced and has a good reputation. You can ask for recommendations from other investors in your network, friends, or family members who have recently renovated their homes, or you can look for online reviews.
Once you’ve found a few potential candidates, be sure to interview them and ask for references so that you can get an idea of their work style and whether they’re someone who you feel comfortable working with.
The second thing to keep in mind is that communication is critical. Be sure to discuss your expectations with your contractor before the project starts, so there are no surprises along the way. And during the project, be sure to stay in close communication so that you can provide feedback and ensure that the work gets completed according to your standards.
Finally, remember to sign a contract before any work begins. This will protect both you and your contractor by outlining the project’s scope of work, timeline, and budget.
There’s no right or wrong answer when it comes to deciding whether to hire a real estate contractor for your investment property. It all depends on your individual circumstances, level of experience, and comfort level. But by taking the time to weigh the pros and cons of each option, you can make sure that you make the best decision for your specific needs.