Hiring a Contractor? Watch This FIRST!

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This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income, become financially free and design their best lives.

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hiring a contractor for your home renovation can be pretty daunting. And believe me, I get it. We’ve had bad experiences with contractors before one notable one was a contractor who said a lot of amazing things, but eventually just underperform. He was unresponsive and he didn’t do things right. We encountered multiple delays and it affected our operations and even our budget, we spent over $70,000 in the overall renovation costs instead of the projected 30 to $40,000 as initially planned. And that’s the reason why I wanted to make this episode today. So I can share with you the best tips when hiring a contractor. Now you never know what’s going to happen. But you can minimize your chances of hiring the wrong person or team by implementing these tips. So let’s get started. And we’re going to talk about who we’re going to hire. So in terms of contractors, you can work with general contractors, or GCS, who may do an all in one package on your remodel and they’ll project manage and potentially hire other subcontractors to get your projects. Finished. subcontractors on the other hand, are the people who handle specific tasks or services in their area of expertise, like electrical, plumbing, or paint, and you’ll need to figure out what you need for your project. If it’s just one field of expertise, you’ll probably go with a subcontractor. If it’s a big project, and it’s your first time it might be beneficial to hire a good GC if you’re worried about managing things yourself, but you’ll still need to hire someone reliable, who can do the daunting task of overseeing the whole remodel. Now, where do you find contractors, you can find them through places like Facebook groups, Yelp, Google and bigger pockets, make sure to chat with at least three to five contractors for each job. And then another way you can find contractors is through referrals. So if you’re visiting a friend or family members home, for example, don’t be afraid to ask who did this for you, you’re gonna be surprised how often people are excited to share their good experiences and referrals. And then ask subcontractors if they have referrals for other people who you need. When you’re searching for a contractor. They often use persuasive words trying to basically get you to go with them. So they might quote you cheap, give you empty promises, then up charge you later they do this because they want to sell you their services, but you don’t know if they’re going to be responsive and give you a good turnaround time or do quality work. But if a friend or family member recommends a contractor to you, they’ve already used them and are vouching for them. So it gives you a stronger sense of confidence that their work is of great quality and that you can trust them. So next tip is you want to do your own research, it’s important to know your contractors credentials. So don’t be shy to ask to see certifications to make sure they’re fit to do the work. So check if they’re licensed and insured. And then make sure to see if they have an online page and check their reviews to see how they treated previous clients. If you can, you should visit a current job site and see it all for yourself check if the site is tidy and safe. If they have a full team working on the project. As you’re interviewing, make sure to see how quickly they’re responding and how polite and punctual they are. One thing you can do is also do a test run of a smaller project if you want and this can help you gauge their professionalism as a business. All right, we’ve gathered our referrals done our homework, and now it’s time for the next step, you want to acquire multiple estimates. So you got to shop around for the best fit for your project, you want to ask each of them for a quote, to get a sense of how much this project might set you back, you’re probably going to be surprised at the range of prices you’ll get from different contractors. Some will be extremely expensive, while others will be cheap to try to get your business but you need to be wary of those bids as well because cheap is not always good. But don’t just talk about money. Ask each contractor the same set of questions find out if they’re up for the job and how they plan to tackle it. And this will give you a sneak peek into their work ethics and how they operate. Ask them for photos of their work as well. For example recently we got quotes for a backyard concrete overlay repair and we got a couple cheaper quotes that we ended up not going with because of the lack of professionalism and lack of photos to show their work expertise. Now if a contractor tries to stop you from chopping around, that’s a big nono. Any contractor knows that a smart homeowner is going to explore more options. But all of this doesn’t stop there. When you have some contacts you like you need to reach out to their references. So ask the contractors to provide you with three references and call them to see how their projects went. This is a great way to vet them even further. And just like the previous point I mentioned, you gotta get testimonials from people who have actually use the contractor. You didn’t ask them questions like did you like working with them? What did they work on for you? What was the total budget? Did you have to pay additional costs for any unexpected expenses? Are they quick to respond, see how they respond and see if they’re happy with the work next tip is you want to keep track of your contacts on a spreadsheet or somewhere you can refer to it’ll get pretty overwhelming trying to keep track of everyone you’ve talked to including all their notes and their quotes. So take note of their field of expertise.

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as their GC or subcontractor and what different references said about these people having a spreadsheet of all your contacts is a handy way to compare options and make the best choice. Once you’ve decided who you want to work with, you have to put everything properly on paper. So next tip is make sure you request everything and Writing Your contract should include all the nitty gritty details and we’re talking project descriptions signed contracts detailed timeframes, like start date and target completion date line itemization, total costs, payment arrangements and schedule, the contractor’s license number names of parties involved and their contact info and an agreement about handling additional costs. We usually provide a contract and a scope of work that contains everything, especially if it’s a big project having things in writing better protects you in case anything goes wrong. payments should also be done in increments by Labor done I say never agree to painful or even 50% Right off the bat. If contractors require this, especially on big projects, it would be kind of a red flag for me, make sure you guys both agree on a certain timeframe and deadline. And once everything’s all signed and done, make sure to keep your documents, contracts, payments and receipts on one place. Another piece of advice if your contractor isn’t giving you an exact timeline, it could mean they’re juggling several projects at once. So be cautious because this is going to lead to delays along with asking everything in writing. Another tip is you got to set a clear and realistic timeline home renovations can be a big deal, and they can be stressful at times. And this is why it’s so important to have a clear idea of when the project will start and when it’s expected to finish. So when you’re talking to contractors make sure they can commit to a realistic start and finish date for your project. Make sure your contract also includes a clause about what happens if the project goes over time you have to be mindful of things like Will there be any penalties for the contractor what kind of updates you’re going to receive this can save you a lot of headaches down the line, we generally add a bonus for every day the contractor can complete the project earlier and then we deduct an amount for every day that contractors late we set penalties and rewards for our contractors before they begin the work to give them more drive to deliver quality work. But while it’s important to have these dates, you want to be flexible, sometimes unexpected things come up that can cause delays. Maybe it’s a hidden problem like electrical issues behind a wall. Or maybe it’s something totally out of anyone’s control like a material shortage. So when you have a change order for things like this, you’ll probably end up extending the completion date based on it. As the project progresses, keep the lines of communication open. So regular check ins can help keep the project on track and let you address any issues that come up right away. Our last tip but not least, be sure to trust your gut. When it comes to home renovations you’re not just investing your money, you’re also investing your time and your trust. So that’s why it’s so important to feel comfortable with the contractor you choose. For example, with one of our projects, we should have trusted our gut and fired faster and not given so many second chances when things weren’t being delivered. Pay attention to how they make you feel. Do they listen to your ideas? Do they answer your questions clearly with professionalism? Do they seem to know what they’re doing? And are they responsive and not being shady? These are all important things to consider. If something doesn’t feel right don’t ignore it, you have the right to choose a contractor who makes you feel comfortable and confident. So I hope you guys enjoy this episode. We walked through all these different steps to hiring a contractor for your home renovation from gathering referrals to doing the homework of getting multiple estimates and requesting everything in writing. Now everything might feel very tedious and I totally understand it is a lot of work but make sure you take those steps and don’t just rely on that gut feeling because hiring the wrong person can create tons of stress and lots of money lost and believe me I’ve been there. So I really hope this episode saves you a lot when you’re looking for your next contractor. So I hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.