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Who should do the maintenance at my rental property?

Landlords, for small ticket items is it better to have a Home Warranty for repairs, collecting multiple bids, or using the property managers preferred vendors?

I’ll give you an example of these from an experience I had this week while working on 2 maintenance issues in Washington DC. Not every repair will be the same, but this is how these 2 compared. As a Property Manager, I am obviously going to be bias. Our vendors have been tried and tested for multiple months if not years. They have been bid and bid again to make sure they offer fair prices with top quality work. Keep in mind the quality of the work is vey important. You can always find a cheaper guy to do the repairs, but you may be sacrificing the quality of the work. Sometime our prices are higher, but we can guarantee the work, and know our contractors are licensed and insured and will come back to do the job right if it’s not done right the first time.

I’ll start with the Home Warranty.

Home Warranties usually have a set up fee of $250-$500, and then a service fee of around $75. This usually covers what ever needs to be done, unless the item is past its life expectancy or not install correctly. We got a call from a tenant in SE Washington DC about a possible water leak from the hot water heater. We contacted the tenant and got the specific, and determined we needed a plumber for the water leak.

As the property manager we contacted the owners home warranty and opened a repair ticket. After 15 minutes on the phone they told us plumber ABC would contact us and schedule a time. 2 hours later plumber ABC call’s the office and schedules to meet us at the property between 1:00 and 2:00 the next day, and we need to bring a check for the $75.00. This was the earliest they could get us in. We ask if we can pay by debit card and have him meet with the tenant. No, they need the check, they don’t accept debit card. Okay, great, so now we have to make a trip to meet the vendor. Usually our contractor would come to the office get keys and go bid or complete the work.

So I get a check for $75 from the owners account and meet the contractor. He looks at the water heater and determines it’s not a water leak, but a gas leak. (Tenant must have meant gas leak) This is an older 1940’s home, and there isn’t a gas shut off valve to the water heater. He can add this but has to contact the home warranty. After talking to the home warranty he can add this for $175.00 because the home warranty doesn’t cover the types of items that should have already been there like the shut off valve. We agree to pay the $175.00, but he can’t/won’t do the work till he gets paid $175.00. Again he does not accept debit card, and need the payment to start. We schedule to meet back at the property at 4:00. Vendor adds the shut off valve and checks the water heater. Determines there is a small gas leak by the pilot light. Repairs what was about a $25 part and calls it a day.

So in a nut shell the owner paid $250 for a shut off valve and a repair to the water heater. If I could have sent our vendor, he could have done the gas valve and the water heater repair for less than $250. As a property owner, they came out on this just fine, and if it had been a water heater replacement, the home warranty might have covered it. Maybe not, the water heater is from the 70’s judging from the wood paneling cover on bottom.

So I do agree that Home Warranties can save you money, but remember that you also have to do a lot of leg work to get the value. Multiple trips to the property. Home Warranties offer piece of mind, but if you never have a large replacement like a furnace or Water Heater they end up costing you more money.

Now lets go over the owner that wanted 3 bids on a job before we could move forward. Tenant called about her disposal not working in the Brookland neighborhood of Washington DC. I walked her through a couple steps to see if it was jammed, or maybe just needs to be reset. After determining that it might need to be replaced I contact the owner and let them know I was planning to send my contractor and if it was over $300 I would let them know before we move forward. This is a new owner, and he wanted 3 bids to compare to our vendor. So I agreed to get him 3 bids. I got a bid from my vendor, since he has done multiple of these for us, and then reached out to a plumber we have used before, and a plume the owner recommended. Both plumbers wanted to look at the disposal to give me a bid, which I understand, either they want to make sure it actually needs to be replaced, or they are good salesmen, and understand this importance of meeting the customer to help close the sale. I scheduled a time to meet both plumbers back to back, to prevent multiple trips. First plumber was on time and determined the disposal needed to be replaced and gave us a bid similar to the bid from our preferred vendor. The second plumber got stuck at a previous job and called to reschedule. This happened to be the owner’s vendor, so I made sure we reschedule for the next morning. The next morning he came and gave us a bid that was similar to the other 2 bids.

I submitted all the bids to the owner for approval, and he chose to use his plumber. This works great, it’s always good to add more great contractors at your disposal.

The next morning I contacted the owners vendor to schedule a time. He is a one man show, and was busy till Monday and also he requires payment at the time of service. I went ahead and agreed to have him do the work Monday, and asked if he was able to stop at the office to pick up keys and the check. We are located in NE DC, in the Brookland neighborhood. This property is in SE, the vendor said he was not able to travel across town to get the keys with out charging a trip fee. I KNOW I KNOW, I should have asked him this before approving his bid. I checked to see if the tenant would be home. She was going to be at work, so I decided to lockbox the property next time I was in the area. I worked out with the vendor to mail him the check as soon as the tenant verified the work was complete.

On Monday the vendor completed the repair. This repair took from Wednesday to Monday of the next week. Not too bad, and the tenant was happy that we kept her in the loop.

A couple benefits from using our vendors, the work would have been done a few days earlier, and our vendor does not require payment at time of service. They are on a 30 day net pay. Plus this would have saved me time and let me focus on the other 30 work orders I have. As I’s writing this, I can see that the biggest problem I see is that a lot of property owners think that we only work for them. Which is good, I want them to think that they are the most important customer we have, but in reality, we have another 130 units to manage. I like to work smarter, not harder. The truth is we have gone through a ton of vendors, that charged to much, or didn’t provide good service. I feel that when an owner hires us to manage their rental, one of the biggest benefits is our list of vendors. We have seen all kinds over the years. Like I mentioned before our vendors are not the cheapest, but they provide top quality work for a fair price.

This is just my 2 cents, I see value in Home Warranties ,and getting multiple bid, it’s a great way to keep our vendors in check. We always try to bid our vendors every few weeks, just to let them know we are watching the prices. In this market, Dollars and Cents are everything to the owner the tenants and the property manager.

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