Regardless of how long you have been an investor in REITs, one of the biggest challenges of real estate investing can be finding and managing contractors for repairs, renovations, new builds, and more. The right commercial construction services provided by the right contractor can make the difference in affordability, quality, and timeliness — which are extremely important.
With so much at stake and so much on the line, the task of sorting through commercial construction companies can seem daunting. REITs require special consideration when it comes to contractors and construction companies. A typical residential contractor, for example, will not fully suit your needs related to your properties.
However, when you take appropriate actions, you will find your task much easier, less time-consuming, and in the end, more profitable. This article looks at the steps you must pay attention to and perform to find the best commercial construction services for REITs:
Choose the Right Type of Contractor for the Job
Different professionals can carry out work orders for residential properties. However, not all contractors can provide the services needed by property owners, property managers, brokers, finance entities, and investors. Hiring the right professional will prove to be a great asset now and in the future. For the most part, there are:
- Independent contractors
- General contractors
A handyman will be one person with general knowledge about many tasks but no capacity to manage large construction projects alone. One handyman will not get the job done when projects need to be carried out across multiple properties at scale.
Independent contractors are plumbers, roofers, electricians, masons, and others who specialize in a specific line of work. Often referred to as subcontractors, these professionals are ones you would manage yourself during a construction project.
A general contractor is an individual or company that manages projects and oversees everything from ordering materials and securing permits to scheduling electrical work. These professionals are in charge of hiring and supervising subcontractors for the jobs as needed.
A note about general contractors: Some only manage certain aspects of builds, renovations, or remediations. For example, a general contractor may oversee a project only during the building phase, while a different company or contractor would be in charge of drawing up and planning the initial concept and executing the design phase.
The best commercial building construction contractor is going to serve as your “one-stop shop” for everything that has to do with your REIT project from start to finish. Hiring a complete general contractor or company will take the task of overseeing the entire project off your shoulders. This approach is the best route to take, especially if you need projects done at scale across multiple properties.
However, no matter what route you choose, the company or contractor you hire must be licensed, bonded, and insured. Upon request, they should have no issue providing this information and proof of their credentials.
Take the Time to Thoroughly Vet the Company or Contractor
Although you may be eager to schedule work with a contractor, keep in mind that the best are sometimes booked with jobs several months out. This unavailability is a good sign that they are reliable, produce quality work, and have services that are in demand.
In general, if you hire a residential contractor or company for your REITs, you will likely end up paying more.
Most contractors charge homeowners retail rates. However, if you find a commercial building construction contractor or company that works with real estate professionals, investors, or property managers, pricing will likely be more reasonable. This disparity is because these contractors are focused on garnering repeat business and will charge less to keep work rolling in.
Once you find a contractor or company that you would like to work with, do your homework and ensure they have the experience to do the commercial projects you need to do and have the proper credentials and licensure to do so. You should:
- Speak with their past clients
- Look at Better Business Bureau reviews
- Research public records for judgments, lawsuits, or liens against the contractor
- Request a portfolio of testimonials and photos of past work
- Examine past worksites to see some results
Usually, much of this due diligence can be done online or over the phone. However, if research does require you to do more, it is well worth the effort. Choosing the right contractor is the easiest way to avoid frustrating complications and costly setbacks.
Sign a Solid Contract
Regardless of size or scope, you should put any project in writing within a clear, concise, and thorough contract. Before you sign a contract, make sure that it contains:
- The project location, start date, and estimated end date
- The parties involved
- The scope of work with detailed lists of what will be completed
- Who will provide materials and tools
- License and insurance requirements
- Terms of payment
- Warranties/guarantee information on workmanship and materials
If possible, check on the project progress periodically. You can schedule visits to the job site or even arrive unannounced. You might consider hiring a project manager to do this if you are too far away to monitor progress yourself.
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