Selecting Vendors Leads to Successful Landlording

By: Bob Machado President and owner of HomePointe Property Management

One of the most important jobs of owning and managing rental property is having a list of reliable vendors that that can respond quickly to the maintenance demands at the properties you have rented out. Without this reliable list you will be guessing as to whether a repair will be completed when your tenant complains. Suffice it to say that you will be judged based on your ability to select good quality vendors. Your pocket book may be challenged if you select a vendor that is good, but that has a high opinion of their work value. Knowing how to locate and verify the credentials of the vendors on your list are all a part of the necessary requirements of a good landlord/property manager.

Starting from scratch can be a bit daunting when looking for new vendors. How do you know who is good and who is not? When I need a new vendor I will normally check a few different places for vendors to interview. Try calling the local apartment association, do an internet search, and check with a local property management company. The apartment association will have an advertisers list. The internet will have some companies listed along with aggregators that charge a fee to the vendors they refer to. Be careful of these as those fees may drive the cost of the vendor up. Finally, try local property manager to see if you can get a referral. Property
managers use reliable vendors at reasonable prices, a winning combination!

Once you have a vendor lined up you still have to check them out.

Do they have liability insurance? You need to verify this by seeing their Certificate of Liability Insurance. This document will state the liability limits along with the coverage dates and policy number. The company name will be on the certificate. This will tell you that the company is covered in case the repair they do results in an injury to your tenant or damage to your property. Failure to have this coverage should result in your not using that vendor. No insurance, no work.
Do they have a business license? This tells you that they are doing what is legally required to do business in your area. If a lawsuit stems from their activities, you will look a lot better in a deposition if the company you used is legal.
Do they have worker ’s compensation insurance? All firms with employees must carry this. If a vendor’s worker is injured on your property you do not want to be drawn in to a lawsuit over whether the employee was your employee or the vendor’s employee. It also is important that all vendors play by the rules to keep insurance rates reasonable. The underground economy hurts all of us. Do they have a contractor ’s license? Any work done at your property by a vendor in California that results in a bill of $500.00 or more requires that the vendor be a licensed contractor in the specialty involved. You can check out the license of any vendor in California at OnlineServices/ CheckLicenseII/ CheckLicense.aspx. You can search for the license by name or license number. Small jobs under $500.00 do not require a contractor’s license but would still require insurance and business license. One of the many advantages a large property manager has over small property managers and owners is that they can become an employer of maintenance technicians and contractors. At our firm, we employ ten technicians and hold a General Contractors License, a Plumbing License, and a HVAC License (773021). The advantage is that our firm takes care of all the insurance requirements, business licenses, workers compensation, contractors licensing and bonds, and criminal background checks of all employees. Our clients know that we have vetted the people entering their tenant’s homes. We also are able to schedule the repair appointment on the tenant’s initial phone call rather than having to call the vendor and hope they call the tenant in a reasonable time frame. Having been in the business for 30 plus years, I know that as a property manager, I will get the blame if things go wrong. So we took the step of controlling more of the maintenance so that it is less likely that things go wrong.
Whether you are a do it yourselfer, an owner that locates their own vendors, or a property manager, the bottom line is getting the job done correctly the first time, at a reasonable cost. Correctly means making sure the vendor is insured, legal, and can do the work. Cost means that the final bill makes sense for the job performed. Without a good vendor list landlord is not able to effectively serve their customers. With a good vendor list, success is one step closer.


Bob Machado

Bob Machado is President and owner of HomePointe Property Management which is located in Sacramento, CA serving the greater Sacramento Region from three offices. He graduated from UC Berkeley “With Distinction” (1977) and has a degree in Economics. He is both a Certified Property Manager (CPM) and Master Property Manager (MPM) and HomePointe is a Certified Residential Management Company (CRMC). Bob holds a California Brokers License (00691121).
Bob is a founding member of the local chapter of the National Association of Residential Property Managers (NARPM), as was its’ first president (1992). In addition to local leadership, Bob is past national president of NARPM (1996-97) and served on the national board from 1992-1998. Bob is a nationally qualified and recognized speaker for the association and teaches various property management topics and has authored several property management courses.