Vendor relationships are often the difference between success and failure in property management.
The best property managers know this and spend time building a roster of vendors they can trust before they’re desperate for help. When something goes wrong – and something always goes wrong – these relationships save time, money and stress.
Here’s the truth about vendor relationships:
- Maintenance emergencies happen 24/7
- Bad vendors will cost more money in the long run
- Strategic partnerships can increase the value of properties
Building vendor relationships used to be a nice-to-have for property managers. Today, it’s a necessity.
Read on to learn how to build vendor relationships that’ll save time and money…
You’ll learn:
- Why vendor relationships have never been more important
- Who you should be building relationships with
- Where to find vendors you can trust
- How to maintain your vendor relationships
Why Vendor Relationships Have Never Been More Important
Running a property management business is becoming more difficult by the day.
Between rising costs and ever increasing expectations from property owners, property managers are being squeezed from every angle.
Industry research shows that 77% of property management companies ranked vendor and contractor labour as their most painful cost pressure. When asked to rank their top pain points from a list of 10 different categories, vendor and contractor labour was far and away the largest percentage.
This tells us one thing: Finding fair priced vendors that you can trust is difficult these days.
Imagine a burst pipe at 2am. Or maybe a shopping center parking lot needs emergency paving work. Who’s going to get the job done faster and for a better price? The property manager who has a strong vendor relationship or the one who is frantically searching Google?
Vendor relationships give property managers leverage. If vendors depend on consistent business, property managers can negotiate on price and they’ll be more likely to give expedited service when it’s needed.
Building vendor relationships isn’t just something to do to save a few dollars. Smart property managers spend time cultivating these relationships long before they’re needed most.
Who Every Property Manager Should Build Relationships With
Not all vendor relationships are created equal. Some, you’ll need more than others depending on your property mix.
That being said, there are vendors every property manager should know:
Paving & Asphalt Contractors
Parking lot paving is one of the biggest expenses that come with property management. When done correctly and on time, parking lot repaving preserves property value and keeps tenants happy. Let it go too long and costs start to pile up quickly.
Repaving an asphalt parking lot can cost anywhere from $2-4 per square foot. That means just half of a 100,000 square foot parking lot can cost $100,000. This is why property managers should develop a relationship with one paving contractor they trust instead of searching for a new vendor every time work is needed.
Need a good asphalt contractor? If you’re looking for an asphalt contractor in Denver, building a relationship with a local specialist who knows the ropes is the way to go.
Plumbing & HVAC Vendors
Water damage and heating failures are two of the biggest headaches for property managers. Not only does this require emergency service, but without a trusted vendor, these vendors will charge an arm and a leg.
When choosing plumbing and HVAC vendors, look for vendors who promise a 24 hour response time at minimum.
Electricians
Electrical issues aren’t just inconvenient. They can pose safety issues and liabilities that no property manager wants to deal with. Reliable electricians who are licensed, insured, and know your property will be worth their weight in gold.
Landscapers
Curb appeal is important and landscaping is one of the easiest ways to improve the image of a property. Having a landscaping vendor you trust helps ensure your property always looks its best.
General Contractors
Every property manager should have a “go-to” general contractor. General contractors are great for larger renovation projects, tenant improvements/build-outs and any other capital expenses.
Finding Vendors (and Making Sure They’re Legit!)
Finding great vendors is easy. Confirming they won’t take you for a ride is the real trick.
Here’s a process that will work every time:
The first place to look for vendors is from other property managers. Talk to fellow property managers locally and get their recommendations. Property management associations and meetups are great ways to connect with the local PM community.
Now that you know who you want to contact, it’s time to vet them. Things to look for when vetting vendors:
- Licensing and insurance
- Other property management clients you can speak with
- Guaranteed response time
- Pricing
- Quality of their work
Don’t just jump on the cheapest vendor. Chances are the vendor that gives a price 30% cheaper than the rest is going to cut corners.
Here’s a statistic property managers don’t think about…
Did you know that 39% of property managers spend over 20 hours per month handling maintenance requests? Spending hours upon hours haggling with vendors over the phone is why having reliable vendors ahead of time matters. Pre-vetted vendors means less time wasted trying to weed out the bad ones.
Maintaining Vendor Relationships
Creating vendor relationships is just half the battle. Maintaining those relationships is where the biggest payoff lives.
Top notch property managers treat their vendors as partners. When you start to think of your vendors this way, you’ll naturally:
- Pay their invoices on time
- Communicate clearly about projects
- Provide feedback when something isn’t done right
Here are a few other things that help maintain vendor relationships:
Pay invoices on time. This should go without saying, but late payments are the fastest way to lose a vendor’s trust. Vendors who know they’ll get paid on time will go out of their way to take care of properties.
Clearly communicate project details. Put expectations in writing. Project details should include a timeline, budget and quality expectations.
Give them consistent business. Vendors are going to give better pricing and better service with consistent work. Look at the vendor list and see where consolidation makes sense. It’s better to give 80% of work to 2 vendors than spread it across 10 vendors who don’t know the properties well.
Provide feedback (when you receive poor service). Did the vendor do a great job on their last project? Let them know! Did they miss the mark? Tell them that too. Honest communication is healthy communication.
Make sure to review vendors at least a couple times a year. Take note of response times, quality of work, price increases and overall communication. If things aren’t up to par, now is the time to cut that vendor loose and find a new one.
Bringing It All Together
Developing relationships with vendors is one of the easiest ways to save money as a property manager. Not only does it save money, but it reduces stress and protects the value of properties.
Here’s a quick recap:
- Build vendor relationships before you’re desperate
- Vet, Vet, Vet. Make sure they can trust you too!
- Treat vendors like partners
- Regularly review vendor performance
Property managers who make vendor relationships the biggest focus are the ones who provide the best service to their clients. Don’t be afraid to put in the work now and watch the business grow!