Maintenance is not only a dirty business but an area of the rental housing business that can quickly get out of control if a reliable vendor management system isn’t in place.
Take, for example, a portfolio’s need to upgrade to low-flow toilets at its properties. The leasing company may choose not to do one major install, but rather replace on an as-needed basis or do so quarterly to ease the budget. If a preferred set of vendors isn’t in place to do the work, the project can be riddled with cost overruns, quality issues and blown deadlines.
Nobody wants to pay more, or be so far down on the list of a vendor’s priorities that quality suffers or the work gets delayed. A property should know if vendors are where they should be, if it’s getting charged the correct amount on each call, and if materials are being charged and allocated correctly.
Building a balanced vendor matrix will help properties keep performance and maintenance costs in check.
Establish a vendor matrix with qualified companies
Your people are your number one asset in maintenance, whether they work directly for you or are vendors, says James Wagley, a vice president of Texas-based RealPage who specializes in maintenance processes. Having a team of vendors is just as important as a rock-star team of onsite maintenance technicians. A good vendor matrix is the foundation to navigating through what can be choppy maintenance waters.
The matrix should be structured and include qualified primary and secondary vendors for each type of maintenance category – plumbing, heating and air conditioning, appliances, flooring, etc. The matrix may include a compilation of large and small vendors who are specialized in the types of work performed, and ultimately present as little risk as possible to the property. Vendors should be insured and bonded, not fly-by-night outfits that are here one day and gone the next.
Qualifying vendors and letting them know they are important to the success of your operation can help take the headache out of getting repairs or installs large and small done right.
“These are some of the processes that should be in place to help mitigate risk and make sure a property or portfolio is fully ready to do maintenance,” says Wagley. “The vendor matrix is the result of interviewing vendors, having vendors fill out applications and agreements. You’ve got to qualify and embed vendors, make sure they’ve submitted insurance paperwork and that you have proof they are licensed or bonded.”
Identify designated backup vendors by category
Backup vendors should be chosen by category to ensure that work doesn’t get stalled by a company that can’t fit your property into the schedule.
When classifying by category, think of how you shop by department at the big box retailers. In the flooring department, there is carpet, vinyl, linoleum and ceramic. Some companies may specialize or have better pricing in one flooring type than the other, so having multiple flooring vendors could be a better fit.
Further, some vendors may be tagged for multiple categories, depending on the services they offer. But ultimately no vendor can do everything, so having two or three vendor choices per category may make more sense.
Depending on the size of the project, second or third vendors simply may be necessary. For example, a water heater upgrade at multiple properties in the same city could be more than just one plumbing company can handle.
Train vendors to best work through your system
As part of your vendor agreement, host annual vendor training. This will help ensure that the vendors you select will work in accordance with your system, plus build camaraderie. It also lets them know how your company operates and sets expectations for things like when and how they will be paid.
Also, “vendors should know your expectations of how your customers should be treated when they are on the property,” Wagley says. “For example, don’t use the bathroom in the house, wear shoe covers to protect flooring or don’t enter the property when there is a minor present.”
A report card should be established that lets vendors know how well they’re performing. It can be as simple or detailed as you like, and it’s also an opportunity to get some one-on-one face time with them. Schedule a two-hour meeting and cater in lunch. It’s the perfect time to get everybody on the same page.
It takes just one maintenance project gone awry or bad experience, and a property can lose the trust of the tenant or the owner, Wagley says. With a balanced vendor matrix, the property has more control over its vendor relations, which can improve the overall maintenance performance and reliability that contributes to resident retention.
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