Do you Want to Be an Apartment Vendor? Here’s What You Need to Know

By Sergio Fetter Last updated Feb 2, 2023

It was a chilly and raining February afternoon when I met the new owners of an apartment complex. I was their new vendor. We walked around the property and the scope of work. I thought I understood what I was signing up for, but in reality, I didn’t.

Then, my company was young — four months old. My mind was going at a breakneck pace — closing a large project was fantastic. Undoubtedly, it would allow me to expand my operations, which it did. But it didn’t come without growing severe pangs.

If you are pondering offering your services to apartments, this article is for you. Here is what you should consider.

Why Apartments?

There are many reasons you should consider becoming a vendor for apartments. It might be a solution for your slow months if you are in a cyclical business.

Undoubtedly, apartment complexes are appealing prospects. If your business provides a highly sought service — painter, carpenter, handymen, landscape, etc. — tapping into this industry could keep you busy for a long time.

However, these potential customers might not be the right fit for your business model. Before offering your services in the multifamily industry, it is crucial to understand the ins and outs of the industry.

Unlike a traditional client, closing a deal with an apartment complex can be a curse or a blessing. Thus, it is essential to understand what you are getting into before signing up to offer your services.

One thing to keep in mind when we talk about being a vendor for apartments, there isn’t a one-size-fits-all. Even if you work in two or three complexes managed by the same company, your experience will vary depending on the management and maintenance staff.

Here are some of the most common questions

Do I Need a Business to Be an Apartment Vendor?

It is a difficult question to answer. Full disclosure, I’m not a lawyer; anything in this blog is my opinion, experience, and research. Now that we have that out of the way, let’s move on to the question.

The answer is yes and no.

If you want to scale your business and provide services to several complexes, you should consider opening a business. Depending on the parent company you are offering your services, you might not have an option. Some management companies require vendors to be a business entity.

I think it is easier to manage a business than a sidekick. I decided to open a business immediately, even before I began to offer my services.

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On the other hand, if you are cleaning a unit here and there and have no intention of growing, you are golden. Also, if the managers don’t ask you for anything, there is no reason to create unnecessary paperwork.

Do I Need Insurance to Become a Vendor?

Rule of the thumb, yes, you do. However, some complexes, especially mom-and-pop, might not ask for anything.

But if they require it, know that workman’s comp might be the biggest pain you encounter.

Many structured management companies will require you to have a workman’s comp to work on the premises — regardless of the size of your business.

The most affordable insurance is the so-called “ghost policy.” You can read more about the subject in this article.

The biggest issue with ghost policy is that they require the full payment upfront. Mustering up $2,500 or more can be very challenging if you are bootstrapping your way through the business.

Another factor to consider when selecting your insurance is ensuring you have unlimited certificate holders.

Many management companies require to be certificate holders. If your carrier charges you per holder, you might be paying lots of money to have a piece of paper.

How Often Do I Get Paid?

After the work is done and invoiced, don’t expect to get paid for the next 30 days — or even longer. If you are not careful, or even if you are, waiting for a check can cause a massive problem in your cash flow.

When you are a qualified apartment vendor, understanding how your clients make payments is crucial for the health of your business — especially if you have employees and payroll commitments.

When I first started, my company was a hot commodity almost immediately. To keep up with the high demand, I hired three people. After completing work and invoicing daily, I hoped that I would have gotten checks from my clients before I had to make payroll. The checks never made it in time. I had to scramble to pay the employees.

Eventually, to stabilize my situation, I had to let one go (which was not hard since the employee turnover was high) and slow down on the jobs. That gave time for my clients to pay some invoices, increasing my cash flow.

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How to get started

With all that said, if you think that servicing apartments is what you want to do, there are a few things you need to know before getting started.

It’s crucial to have a strong understanding of the products and services you’ll be offering. What are your unique selling points? What can you offer that other vendors can’t?

For instance, my pitch is “reliable and the best value.” I don’t have the best prices, but our company will do an excellent job for what you are paying. Also, we are reliable; I always ensure that my team will show up on time.

It’s also important to have a good understanding of the market you’ll be operating. The demands drastically vary depending on the apartment complex.

Who are your potential customers? Are you providing high-end units or just anything that comes your way? Those are important questions to ask.

Finally, it’s crucial to have reliable customer service in place. The multifamily industry is small and tight neat. If they call you back to fix something not up to their standards, you should make the time to fix it. They will remember you and recommend or bash you to their friends.

On the other hand, if a customer calls you with an issue and you brush it off or ignore it, you may lose that customer forever, possibly others.

These tips will help you become a successful apartment vendor in the multifamily industry.

Tips to be successful

While working in a residential area, you are servicing a commercial property, threat as such. Here are a few tips to become successful in this industry:

Provide the service the customer wants

As an apartment vendor, you will quickly learn that you cannot provide the same quality to all your clients when servicing different complexes. Some clients want the vendor in and out without any hassles. Others will think their complex is the Taj Mahal.

Before you provide your prospect with prices, have a conversation about the work. Also, ask to walk a couple of units to inspect the work.

As a painter, the walkthru is crucial for my business. Most complexes don’t want to spend the money on scrapping runs or fixing wall imperfections. In this case, it makes it a lot easier for my company, and I will price accordingly.

Thus, always ask how your client wants the service done and provide the work they expect within their budget.

Create a work order for each request

Trust me on this. Often, property managers are under pressure, and when they need something done, they will go through the list of vendors until the first one picks up.

At the end of the day, if something goes wrong, you will be the one who ends up paying for a mistake — even if it is not yours.

Furthermore, you might receive ten calls in one hour asking for things to do. If you don’t put that in a work order, there is a high chance that you might forget to invoice your customer.

When you receive a call from your client, create a work order and ensure the scope of work is approved before you start.

Check List

One crucial element of being an apartment vendor is appropriately executing the client’s scope of work. But when you have several clients who want something different, how do you do it? Create a checklist.

My checklists are based on clients. For instance, one client requires the kitchen and bathrooms to be painted with a semi-gloss paint. Further, some apartments require us to remove the blinds and wash them, while others don’t want us to touch them. These requirements are clearly listed in the checklist. Thus when one of my workers gets assigned the job, they will also receive the checklist.

Ask staff to approve work

Call back is not uncommon in this industry. But it is frustrating for you, as the apartment vendor and the client.

One way to lessen the likeliness of this inconvenience is to have the apartment staff check the work and sign the work order as complete. If there are any issues with the result, they can complain immediately and avoid the callback.

Invoice

Do it every single day. When the work is complete, and the work order signed, invoice immediately.

Some managers will only input invoices once a week or every other week. Getting your invoice in as soon as possible is crucial to getting paid faster.

Invoicing is something that you should not be messing around with. If you have other people working for you, things could fall through the crack, and you might forget to invoice work that has been completed.

Don’t do unapproved work

Sometimes, you will be working in an occupied apartment, and residents might ask you to fix things that are not in your scope of work. Don’t do it.

For one, you will not be paid to fix whatever they ask you. Unauthorized work is a liability. If something happens, your company might have to pay for it.

Conclusion

Becoming an apartment vendor is a good business and it will keep you busy, but it is not for everyone. Understanding the ins and outs is crucial when making a decision to service apartments.

This article highlights the amount many factors to take into consideration before signing your first agreement with an apartment complex.