In real estate, especially when it comes to the construction, remodelling, and repair of a property, contractors are known to play a major role in overseeing a project from start to finish. They are tasked with the role of managing the workforce, scheduling tasks, budgeting, and liaising with clients and subcontractors, making their role essential to achieving your desired outcomes.
As a real estate investor or property owner, it can be hard to select the right contractor, especially with the varying options available. Each contractor is said to come with a different and unique set of skills and with varying specialisations in contracting, electrical work, plumbing, and design-build services. This particular and varying set of skills can influence the role they play in fulfilling your needs when working on a real estate project.
In this article, we will be looking into who a contractor is, their role in real estate, and how to choose the best one for your project. If you want to know how a contractor works, then you should read this.
Who is a contractor?
A contractor is a company or someone hired for construction, repair, and remodeling on a property. He or she may be tasked with managing the project, hiring personnel, and supervising (subcontractors) all the while ensuring that the work is completed and up to standards. They can specialize in a particular type of work, like electrical, plumbing, or carpentry. Some may have general expertise in managing all aspects of construction projects.
In any case, contractors are professionals in their field responsible for executing construction projects, managing labor, materials, and timelines, and ensuring compliance with building codes and safety regulations
Types of Contractors in Real Estate
The contractor you hire depends on the kind of project you have. The larger the project, the more contractors are necessary to complete the job. Bearing this in mind, let’s discuss the 4 most important contractors you need to hire for your real estate projects.
- General Contractors.
A general contractor oversees the entire construction process. This person deals directly with the project owner, i.e., the real estate investor. They fill many roles, managing the schedules of subcontractors. They usually work on commercial projects but can also handle residential building projects.
General contractors are also tasked with the job of obtaining the necessary permits and licenses for the project.
- Specialised Contractors.
These contractors focus mainly on specific areas of construction. From electrical, plumbing, roofing, etc. the electricians are tasked with running wiring through the new building and installing electric service boxes where necessary, the same goes for the plumbers and carpenters.
- Subcontractors.
Subcontractors are people hired by general contractors for specific tasks.
These specialists are often in high demand with specific skills in different areas. Their area of expertise covers a range of industries ranging from administration, retail, engineering, construction, and engaging professionals with specialized skills in carpentry, demolition, exvacation, flooring, HVAC, etc.
- Design-Build Contractors
This type of contractor handles both design and construction services. They are well-known for their high level of collaboration in construction. As an investor, hiring a design-build contractor helps you manage your finances, you get to hire one contractor rather than sourcing for more than one.
How to Choose the Right Contractor for Your Real Estate Project
When starting a real estate project, selecting the right contractor is very important for the smooth running of the project. It can be hard to choose the best or right contractor for your project, with the number of contractors out there. Below are the ways to choose the right contractor for your real estate project:
1. Define Your Project Needs and Budget
Understanding the scope of your real estate project is the first step you need to overcome. Set a realistic budget when hiring a contractor.
- Research and Shortlist Reputable Contractors
One of the major challenges most investors have is that they fail to conduct due diligence before embarking on a real estate project or investment. This is why you need to look for contractors with a proven record and have worked on projects similar to yours. Ask for recommendations from professionals in the industry. Their portfolio should be a strong indicator of their level of expertise whether it is residential, commercial, or industrial work.
- Verify Licenses, Certifications, and Insurance
Licensing allows a contractor to adhere to industrial standards and regulations, so ensure that the contractor has all the necessary documents, licenses, and permits complying with local building codes and regulations. You check if they have liability insurance and worker’s compensation coverage.
4. Evaluate Experience and Past Projects
Check their past projects and review their portfolios. Ensure that any work they have done has a semblance to your current project. Check for reviews, and visit their work and previous project sites if necessary. Follow up on any information about them.
- Get Multiple Quotes and Compare Pricing
When making your budgets and payments, request detailed cost breakdowns. This leads to transparency in the business. A reputable contractor should have transparency, providing details that explain the scope of their work, material and labor costs, and timelines. Avoid contractors with suspiciously low bids. Ensure that both parties have a clear understanding of the financial aspect of the project.
- Review Contract Terms and Payment Structure
Before signing the contract, understand the payment schedules and terms. Check all the details, timelines, materials, and warranties, and be sure they are all in writing. A good contractor would let you know of all these things in advance.
- Assess Communication and Professionalism
Effective communication is important in a relationship between a contractor and the client. The contractor should be easily approachable, responsive, transparent, and willing to discuss the details and progress of the project, while also addressing any concerns you may have. Have an open communication and regular updates from the contractor prevents misunderstanding and helps to keep the project on. Check their ability to handle unexpected challenges.
8. Check References and Client Testimonials
Contact the contractors’ past clients for feedback. Know everything there is to know about them regarding their job, and expertise. Ask about reliability, quality, and adherence to deadlines.
Red Flags to Watch Out for When Hiring a Contractor
- Absence of a proper license or insurance protection
- Negative feedback and absence of credible references
- Unreasonably low estimates and undisclosed charges
- Absence of a written agreement or unclear project specifics
- Regular project holdups and missed deadlines
Conclusion
In conclusion, choosing the right contractor for your real estate project is a crucial step that can greatly impact the success of your investment. By understanding the different types of contractors and their specific roles, along with following a systematic approach to evaluate candidates, you can ensure your project is in capable hands.
To make an informed decision, it’s important to define your needs, conduct thorough research, verify credentials, and maintain open lines of communication with potential contractors. Staying alert for red flags, such as lack of proper licensing or negative client reviews, can help you avoid potential pitfalls.
Ultimately, the right contractor will not only help you achieve your project goals but also provide peace of mind throughout the process. With careful consideration and due diligence, you can embark on your real estate journey, confident that you have chosen a trustworthy partner who will contribute to your success.