What Is the Best Way to Pay Contractors in Garland When You Own Multiple Properties?

Handling contractors for one property is challenging enough! Add a few more properties to your portfolio, and you're juggling multiple maintenance projects—plus the cash to keep your contractors working.

If you're not careful, you can quickly find yourself with a significant cash loss, an incomplete project, and a contractor that disappears. We know that multiple properties are a critical component of developing long-term wealth. This is why we put together a list of strategies for DIY landlords when it's time to hire and pay contractors.

Strategies to Avoid

If you've been in the investment property business for very long, you've probably had a bad experience with a contractor; sometimes, it's unavoidable. However, when it comes to hiring a reputable contractor, there are some simple ways you can avoid costly mistakes.

Paying Cash Is Risky

How often do we pay for anything in cash these days? When hiring construction contractors, cash is more common than you think.

If a contractor requests cash up front, be very careful. Handing over a bundle of cash to a contractor who says they can't begin work without cash-in-hand is dangerous. You have no way to stop a contractor from taking your funds and disappearing without completing the task!

Most reputable contractors don't operate with cash. Request an invoice, write a check, or use an electronic funds transfer system that can help protect your money if your contractor takes it and runs.

Don't Pay Half Upfront

If a contractor in Garland requires a 50% down payment to start work on a job, they might be using your money to recover expenses from another job. A contractor should never need a large sum in advance to begin work. They should also never use your money to keep themselves cash-positive if they're in the hole.

Avoid Weekly Payment Schedules

Your project should have a start date and estimated end date. Progress for each stage throughout the project can fluctuate from day to day or week to week.

A set weekly payment amount can put you in the red when it comes out-of-pocket, depending on how rapidly the work progresses. There are better ways to make sure your contractor has the cash they need while keeping the job on track.

Don't Pay Subcontractors

Contractors often hire out different crews to handle the various aspects of a construction job. However, work only with the contractor. Never pay subcontractors or pay workers directly.

1. Your contractor provides an overall cost estimate for the project.
2. You pay the contractor.
3. They pay everyone they hire to work on your project.

Paying subcontractors can cause you to double-pay for work.

Strategies That Work

We've warned you about which avenues can damage your long-term wealth, so what's the next move? Here's how to arrange payment to ensure you have a successful project.

Always Get a Contract

Never agree to the project, the timeline, or the costs without a contract. Make sure the contract outlines your payment schedule, all required tasks through each stage of the project, how you'll pay, and what's required for final (full) payment to the contractor.

Pay "Something" up Front

Demolition is the start of most construction projects. However, contractors in Garland don't need much money to start the demo. Agree to a small percentage of the total costs—far less than 50%—of the project as "starter" money. Request an itemized invoice that tells you what the start-up fee covers, then pay by check or credit card.

Check-In on Your Projects

Renovations can turn into an expensive mess without supervision. Your contractor should monitor his workers and the work closely throughout the project. Your job is to monitor the contractor.

Before any follow-up payments, get a progress report from the contractor and compare it to the contract. If the contractor is off schedule or over-budget, talk with them about it, and find a resolution to stay on time and budget—before providing any more money.

Hold Back Funds

Make sure you hold the final payment back until the project is complete and passes inspection. Never pay a contractor for incomplete work or labor that doesn't match what was in the contract.

An Expert Property Manager Manages Contractors!

Keeping track of all of these tips for paying contractors can become a headache when you own multiple rental properties in Garland. When you hire an expert property manager, you don't have to juggle projects and payments.

RentHub Property Management uses trusted, vetted contractors for all of our owners' properties. We manage the start and end of each project, plus everything in between—including payment.

Our contractors know how we work and what we expect. We never pay out more than they need to work, and we won't pay for a finished job until it's completed correctly.

We know that sometimes a little help here and there can make the difference between a profitable investment or a money sink. Need help managing renovation projects for multiple rental properties? Let's get started.

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