Who buys the materials? Me or the contractor?
Should I buy the materials? Or let the contractor handle it?
As a real estate investor, you know how precious your time is. One of the biggest things you could do (or will do) is the construction of your properties. From renovations to ongoing maintenance.
One of the biggest questions real estate investors and landlords debate amongst their circle of friends is ‘supplying the material’ vs having the contractor purchase the material. There are pros and cons to both sides.
Having the contractor purchase the materials.
Sometimes you don’t want to worry about any of that. Having to figure out the materials you need, going to the shop to purchase and then delivering it to the job site. It’s time-consuming and you might get the wrong part even then. This can be frustrating and not a waste of your time. As a real estate investor time is your most precious resource. Especially once you have cash flow. So many times it makes sense to have the contractor purchase the material. Many also claim it’s best for the contractor to do it. Because of laws in your state. You can also be liable if anything happens. By having a contractor purchase the materials and having the right contract agreement. You can save yourself time, headaches and potentially any legal issues.
Purchasing the material yourself.
Someone real estate investors say they can save money by purchasing the material and prefer to have control of this. They will be able to choose what they want (which sometimes the contractor might not have inventory access too). You control the experience and are able to save money. Many real estate investors will do this when they are using subs or workers on smaller projects or projects that don’t require a permit. The biggest issue is that depending on your state you can be in trouble. If you purchase the materials, you become the employer. So it’s worth researching and deciding which option is best for you.
So what should I do?
At the end of the day, we believe there’s no right answer. There are tons of real estate investors that love doing the projects and purchasing the materials themselves. Well, others want nothing to do with it and will have the contractor handle it.
Regardless of how you get started. Remember to always vet contractors and assure you
At the end of the day, we aren’t legally obligated to provide legal advice as we aren’t a lawyer. Both have their pros and cons. It’s always worth checking with your legal counsel about which approach is best.
We’ll be doing more DIY vs Outsourcing post in the future.
About WorkMand
WorkMand is a marketplace service for real estate investors to find contractors to complete their renovations and maintenance. Learn more here.
