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In House Maintenance vs. Contracting Out in Phoenix: Which is better?

System - Friday, November 1, 2019
Property Management Blog

In House Maintenance vs. Contracting Out in Phoenix: Which is better? - Article Banner

When a prospective landlord is researching Phoenix property management companies, one of the most important questions to ask is whether maintenance is performed in-house or contracted out to local vendors and contractors. Most property professionals will do one or the other. Either they’ll have their own maintenance division or they will subcontract the work out.

Occasionally, you may come across a hybrid version, where the management company will perform limited maintenance and subcontract out the bigger or more specialty items to professionals like electricians or plumbers.

Contracting Out Phoenix Rental Home Repairs

When a Phoenix property management company subcontracts out all maintenance, the property manager or the maintenance coordinator takes care of organizing routine and emergency maintenance needs between the vendors and your tenant. The vendor employs the workers and assumes all liability for those employees.

Your property manager will be responsible for verifying the vendor’s professional license and insurance. If employees are involved, they need to have worker’s compensation insurance. If they’re a sole proprietor, they can waive that insurance requirement. The point of checking for licensure and insurance is protection. If a worker gets hurt at a property, the vendor makes any claim against their own insurance, not the property owner’s insurance. Your management company needs to have all the necessary information to protect you, your property, and your Phoenix tenants.

When a management company uses a vendor on a regular basis, they should be able to negotiate competitive rates. These discounts should be passed onto you, the owner. A good management company will also review and pay invoices on your behalf.

Besides the hassle of running a separate company with its own employees, inventories, etc., some brokers and property managers feel that having an in-house maintenance company is a conflict of interest. Owners may wonder whether the management company is performing unnecessary maintenance just to be able to bill. It’s vitally important that this relationship is disclosed in the property management agreement.

How Phoenix Landlords Can Benefit from In-House Maintenance

There is also an argument in favor of in-house maintenance.

In these situations, the maintenance team is on staff through the property management company. This means they are readily available to be scheduled for work. Phoenix landlords don’t have to worry about the scheduling of any outside vendors. The property management company or broker is in control of how much the maintenance work costs and how the employees are paid. Coordinating repairs is often more efficient.

The theory is that this approach to rental property maintenance is more cost-effective for the property owner and that repairs are made in a timely manner. The company can hold their employees accountable, and they are also accountable to their owners and tenants.

The Hybrid Solution for Your Phoenix Home

maintenance - thumbnailIn a hybrid scenario, the property management company may have an employee(s) with either a general contractor’s license or a handyman license who can perform general maintenance. The property manager or the maintenance coordinator will coordinate the work needed with the tenant and any specialized work, like plumbing, would be called out to a subcontractor. This can provide all the benefits of in-house maintenance and professional contractors and vendors who don’t work directly for the management company.

If you have any additional questions about how to schedule and manage maintenance when you’re caring for a Phoenix rental home, please contact us at Bennett Property Management. We’d be happy to tell you more.