Even in the world of buy to let familiarity really can lead to ‘contempt’, especially when it comes to property management and arranging property repairs.
Because the bulk of my buy to let properties are around 150 miles from home I have a number of different managing agents who look after them. Delegating the management also means I can concentrate on other more productive activities.
A few weeks ago one of my managing agents called me.
“The boiler at such and such address has packed up. The plumber has been out and has done a couple of repairs and managed to keep it going for bit, but now he says you’re throwing good money after bad and need to get a new boiler”.
“OK”, I replied through gritted teeth, “do you know how much that will be?”
“The plumber says he can fit you a new boiler for £2,500. Shall I tell him to do it?”
“Definitely not!” I answered, somewhat exasperated.
Just a couple of months earlier, and only after I had threatened to take them to court, my then insurers had finally agreed to pay up on an incident where one of my empty properties had been broken into and the central heating system had been stolen. The whole lot, boiler, radiators and pipe work; the thieves had even chipped away the concrete floor where the pipes had been laid in the floor.
My plumber had quoted to replace the whole system and to provide a new boiler with a 7 year warranty, at a price which made £2,500 for just a new boiler look completely over the top.
“£2,500 for just a boiler is far too much” I tried to explain.
“Oh, I don’t think so” the agent argued back, “Our plumber is very good and very reasonable”
“Look. I’ll email over the quote I had on the other property” I persisted, “then you’ll see what I mean”.
“OK”, she said, somewhat reluctantly, “I’ll get our other plumber to give a quote as well”.
A few days later she called again. “Paul has quoted £1585”.
“That’s more like it” I replied.
This incident confirms what I have long thought.
Most managing agents have a few contractors who act and are treated as an in-house maintenance team and over time some managing agents tend to accept quotes and prices without questioning them.
It’s true that the contractors might start off giving competitive prices so they can get in with the managing agents, and are happy to do so on the assumption there will be regular work. However, after a relatively short time prices inevitably edge up as the contractors feel more confident about their position.
This isn’t helped when the agents rarely question their prices and will even often defend the them, arguing that they’ve used for quite a while and always find them to be very good. That’s not really the point. Getting a few more competitive quotes from contractors outside of their ‘in-house’ team would help to keep them honest.
The new boiler has now been fitted I’ve told my managing agents that from now on any plumbing work at my buy to let properties can only be undertaken by Paul.
So keep an eye on costs and don’t be shy about asking your agents to get genuinely competitive quotes rather than accept the first price given by their little network.
They might object from time to time but if they want to manage your buy to lets then I’m sure they’ll give way to their client’s request.
Here’s to successful property investing