I had a very good lesson recently about how familiarity really can lead to ‘contempt’, for want of a better word, especially in the world of property management and property repairs.
I leave all of the management of my properties to my various managing agents; partly this is a function of where my properties are (being mainly 150 miles from home), and partly this is a reflection that I think my time is better used doing other things.
A couple of months ago I had a call from one of my managing agents:
“Your tenant’s boiler has packed up. We sent the engineer out a couple of times and he managed to keep it going for a bit but he now says you should replace the boiler”.
“OK”, I answered” any idea how much that would cost?”
“Our engineer says he can replace the boiler for £2,500. Would you like me to go ahead?”
“No, I would not!” I barked down the phone.
Here’s why. Just a couple of weeks earlier I had finally agreed terms with my insurers in respect of a claim where metal thieves had broken into one of my empty properties and had stolen the entire central heating system.
The price I had agreed with the plumber whom I had sourced was £2,400. That was for everything including a quality make boiler with a 7 year warranty, all pipe work, and radiators with thermostatic valves.
I tried to explain this to my managing agent. I could tell she was a little sceptical but I stuck to my guns and emailed over the quote I had received on the other property so she could see I wasn’t just making a fuss.
It seemed to do the trick . “OK”, she said, “I’ll get a quote from our other plumber”.
A few days later I got another call. “Patrick can do it for £1585” she told me.
“That’s fine” I replied” Let’s get it done”.
So what’s the moral of the story? Well, in my experience most managing agents will have a small team of contractors who they use regularly and after a period of time will accept whatever quote or price that small team come up with.
Although the contractors might start off being competitive to get onto the managing agents books, knowing that there will be a steady stream of work once they do, after a while it’s almost inevitable that they’ll feel more and more confident about increasing their prices.
This is helped by the fact that the agents won’t question the prices and will even often defend the them, “We think he’s very good and very cheap”, even though they may have stopped getting alternative quotes a long time ago.
I’ve now had the boiler done and I have specifically instructed my managing agents never to allow the first contractor near any of my properties ever again. Any further plumbing work, I have told them, must be undertaken by Patrick, and that’s final.
My advice is to keep an eye on costs and every so often insist that your agents get more than one price and preferably to get prices from outside of their stable of contractors.
They probably won’t like it but if they want your business they need to be reminded from time to time that keeping costs down is important. Landlord doesn’t mean gravy train.
Here’s to successful property investing
Peter Jones B.Sc FRICS
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