In this episode Carla & Adrian are talking about preferred vendors and how lowest price does't mean the best option. Quality like with most things comes at a cost, but in the long run aligning with reputable vendors can actually save you ... time, money and headaches!
Welcome to Canada's Property Management Podcast, your number one resource for investing, managing, and maximizing the value of your real estate assets. And now, here's your hosts, Carla Browne and Adrian Schulz, Canada's rental property experts.
Adrian Schulz (00:18):
On today's episode, we're talking about preferred vendors and how it's not all about the lowest cost. Now, Carla, I know you're in the beautiful city of Saskatoon, Saskatchewan, and I'm, of course, broadcasting from Wholesale City, also known as Winnipeg, Manitoba. I was trying to think, what's there to talk about when it comes to value versus cost? I thought it was ironic that the cheapskate of Manitoba is on this call. That's going to get fun.
Adrian Schulz (00:57):
I know you're very passionate about relationships, and preferred vendor relationships is something that's very important to you. Can you share a little bit about that?
Carla Browne (01:11):
Yeah. When I think about preferred vendors and I think about, how have I explained this in the past to my investors, because I want to make them understand it is not all about the price. It's not about the cost. That's not how I choose the vendors, and that's kind of a hard pill to swallow for some of them. I always think property management is about the three Ps. Well, first of all, the three Ps in your condo management is like parking, people, and pets, right? Or something like that.
Carla Browne (01:36):
There's three Ps that I think fall into play with preferred vendors and that's price, professionalism, and promptness. Those are the qualities that I look for when I'm vetting a preferred vendor and trying to set the expectations that I would have for them and they could have for me. But it is really about making sure you have a strong working relationship with them. Relationships are two-way. From a national perspective, we bring in preferred vendors that work with our offices across Canada.
Carla Browne (02:06):
And a lot of that has to do with establishing price, power in numbers, driving down the price because we're going to get so much business. But then when you take it to a local perspective, just like you would in your own working surroundings, now I want to build a relationship. I want to know that I can pick up the phone and phone this vendor. Call them by first name. They know who I am, and we're going to be able to work together to get whatever this problem is solved.
Carla Browne (02:30):
You want to know how they're going to go present themselves to your tenants, right? It's a direct reflection of you.
Adrian Schulz (02:36):
As a longtime property investor, I am always on the lookout for the best value when doing repairs and maintenance on our properties. The ones that come to mind are, of course, the routine landscape lawn care and snow removal in the winter. I can tell you from 15, 20 years of experience in this that every time that we've selected the lowest cost provider, it was also the worst quality of service. Okay? Then you spend that extra 20 or $30 a month.
Adrian Schulz (03:16):
And all of a sudden, the service is being provided every Monday afternoon and the grass is freshly cut. There are so many simple and easy ways that it displays itself when you consider value versus cost. Can you repeat the three PS of preferred vendors again? I hadn't heard that before.
Carla Browne (03:40):
Yeah. Price, professionalism, and promptness. It's about obviously price place. I mean, that's something you're going to want to know what their... Price comes with a cost, and I 100% agree with you.
Adrian Schulz (03:51):
That's an international standard, I think.
Carla Browne (03:53):
Yeah. Professionalism, you want them to be how you would be going into that property. You don't want them walking in disrespecting the tenant, leaving a door unlocked, all of those kinds of things that I would say make it professional. And then promptness. You want them to be able to react when you need them to react. You want them to show up when they say that they're going to show up. Those kinds of things that just, again, I think that falls back into the professionalism part of it.
Adrian Schulz (04:20):
When you've got that long-term relationship, you're still vetting vendors. How do you vet vendors before they get to service properties?
Carla Browne (04:29):
Yeah. We actually have a preferred vendor agreement that a lot of our offices use. It's not so that you have this contract with them, but it's so that you are managing the expectations, like in any relationship. We go back to the dating time of you and your wife, right? That's managing the expectations of what this relationship really is about. And so that they know what to expect from us and we know what to expect from them.
Carla Browne (04:55):
And then we do want to talk to them about price. We want to talk about how they handle their calls, how do they handle their after hour calls? Obviously repairs don't just happen Monday to Friday from nine to five in our world. You need to understand how all of that works when you're through that whole vetting process.
Adrian Schulz (05:12):
You brought up the dating again and I'm reminded over the weekend. We have three kid. Now. There's a five year old, a three year old, and a four month old. We were reminiscing over the weekend on how we used to basically go on a date every single night before we had kids, right? We go out for dinner or drinks or whatever it was. I think it's been like two or three years since this whole pandemic that we've gone out on a real date. How about you? Have you been going on dates with husband lately?
Carla Browne (05:44):
No, we don't have kids at home. But because of COVID, lots of times we're reluctant to be too out in the public because we have businesses that we're trying to protect. We have a granddaughter that we're trying to protect that's not fully protected. Our minds go in all different directions. Even when you don't have kids at home, I find that we're still being affected right now. But yeah, the decision to go out is much different nowadays than what it is for you.
Adrian Schulz (06:11):
Yeah. Yeah. No, for sure. Just times in life, right?
Carla Browne (06:14):
Adrian Schulz (06:15):
I'm reminded of some relationship examples of vendors that we have worked with, and the ones that came to mind were if you do in fact have common areas in your investment property where you've got regular janitorial or cleaning. And with a strong relationship, we've been able to have those service providers assist us in times of need when there was an urgent notice that needed to be delivered, or there were light bulbs that needed to be changed. It wasn't necessarily in the scope of services.
Adrian Schulz (06:50):
But because of the relationship, they were able to help. And in property management, it's all about helping or assisting with resident requests and repair and maintenance needs. Those preferred vendor relationships are just so valuable in our industry.
Carla Browne (07:08):
I have a story on a cleaning one specifically to that. This summer, one of the offices that I worked directly with took over this property and it was a takeover from an investor. Because normally when we have a turnover where someone's leaving and a new tenant is moving in, we've kind of preempted that. We know what we're going to be up against. We can kind of tell our cleaner, "This is going to be a heavy clean. This is going to be light," whatever's going to have to happen.
Carla Browne (07:34):
But because this was coming from an existing investor, we didn't really know what to expect. We literally helped them with the move out of their tenant. We were moving somebody in, in literally 12 hours, less than 12 hours, and we already had our cleaners booked doing some move outs. And we found out, uh-oh, this one needs a lot of work. Our cleaners cleaned from 12:00 AM until 3:00 AM knowing that we had to get this move in the next morning.
Carla Browne (08:04):
They would've never done that if they didn't have a good working relationship with us that they knew they... I mean, we do a lot of business with them and they knew that this wasn't going to be the norm that we... That this was a one-off situation. They were willing to go the extra mile, just like you and I in our businesses are willing to go the extra mile for our clients as well.
Adrian Schulz (08:23):
A 12 hour unit turnover, that's got to be up there in the Guinness Book of World Records. I'm impressed.
Carla Browne (08:32):
Yeah. We do do 24 hour turns quite often. But like I said, we know we're up against. We'll go do kind of like a pre-inspection before the move out so we can have everything lined up and ready to go. But in this case, it was out of our control. And turning the clock back, we probably wouldn't have allowed it to happen.
Adrian Schulz (08:51):
Because you had that preferred vendor relationship, it all worked out.
Carla Browne (08:56):
Yeah. Yeah. When you're sitting as an investor at your Christmas dinner having supper with your family and the furnace goes out in an investment property, you want to know that you have a vendor that's going to go. We did that too just this year. It was I think over Christmas here. It was minus 40-ish. It was something that needed to be tended to or that house was going to be freezing up pretty quickly.
Carla Browne (09:19):
Having those good relationships and making sure that you're thanking those individuals really heavily afterwards. It was kind of like what liquor store do I need to find that's open to get something for this HVAC person who's going in to fix this furnace right now, because you value it, right? You want to be able to make sure they know that they're so appreciated.
Adrian Schulz (09:38):
Yeah. There we go again talking about having a drink. That's just part of the industry. Now that's real property management.
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