Matt’s Multi-family Tips | August 2024 | Bid Out Your Maintenance Services

Each month, Matt shares a tip or piece of advice that you can implement at your property that month to maximize your multi-family property and investment. This month, Matt looks at the benefits of bidding out your essential services and insurance every few years.

Improving your returns on multifamily properties doesn’t have to be complicated—it can be as simple as making a few phone calls every couple of years. By periodically reviewing and bidding out essential services and insurance policies, you can uncover opportunities to reduce costs and enhance the value of your investment.

For example, by getting new bids on trash removal and landscaping every few years, you might find more competitive rates or better service providers, which directly boosts your net operating income. 

Some of the other benefits include:

Cost Reduction: By regularly seeking bids from multiple vendors for services like landscaping, maintenance, security, and insurance, you ensure that you’re getting the most competitive rates. This can lead to significant cost savings over time.

Improved Service Quality: Competitive bidding can also lead to better service quality. When vendors know they may need to compete for your business periodically, they’re more likely to provide higher-quality services to maintain their contracts.

Risk Management: Regularly bidding out contracts helps you stay updated on coverage options and pricing.

Vendor Accountability: Knowing that contracts will be reviewed and potentially put out for bid every few years keeps vendors accountable. This can lead to improved service over time as they strive to maintain their contracts.

Insurance is one specific area where this approach really pays off. Given the recent rise in insurance rates due to inflation and costs incurred from the Maui fires, it’s important not to automatically accept renewals with higher premiums. The insurance market can fluctuate, and new policies or providers might offer better coverage or lower premiums, thereby reducing your risk and costs.

A few calls, every couple of years to compare quotes, can make a huge difference and result in significant savings and better overall results for your investment.