Here’s a scenario you’re likely to encounter as an income property owner or manager:
You’re in-between tenants and decide that you need to update the flooring in your property. Contractor Dave gives you a quote of $10,000, and needs half of it up front to cover materials. You know several people who have recommended Contractor Dave, or maybe you’ve even worked with him before, so you’re not worried, and write him a $5,000 check. Contractor Dave continually doesn’t show up and comes up with creative excuses. Meanwhile, you’re losing time (and therefore money) not having your income property on the market and occupied. You even could be risking your market timing, which would be very costly.
What do you do? Fire Contractor Dave and get try to get your money back, so that you can quickly hire someone else to get the job done? Wait it out?
If you don’t have the work detailed in writing (for example, in an estimate fully breaking down the work, and a receipt confirming your payment), good luck getting your money back. In most areas, simply proving that you paid Contractor Dave $5,000 isn’t going to be enough. If you don’t have that business relationship
established in writing, you will find it hard to prove that Contractor Dave took your money and didn’t do the work.
There are other advantages to getting a written estimate. By discussing and finalizing what you (and the contractor) expect, the work will go more smoothly, and you aren’t as likely to get surprised by, for example, how long a certain installation will take, or how expensive one material is compared to another.
So, in addition to the scope of the work, get the specific materials listed, along with the dates that the work will be done. Feel free to explain that you know people who have been taken advantage of, and you need to protect yourself. If the contractor (or store) can’t provide a written estimate and details concerning the work, move on. They are not professional, and you could be left losing both time and money. There’s just too much at stake.