Why I Don’t Like “Book Rate” Repair Vendors

Austin Appliance RepairMy long time appliance repairman John at Austin Appliance informed me today that he’s only coming into Austin once a week now, and will eventually stop serving Austin altogether. He lives in Spicewood and mainly works Marble Falls now.

Darn it. My veteran vendor team people keep getting older and retiring on me. John’s also working now as a fishing guide on Lake LBJ. Sounds better than fixing dishwashers and refrigerators I must admit. I’ve use him since the early 1990s, and I hate to lose a trusted service call vendor.

So today I put my feelers out for a new appliance company or person. I’ve had many good recommendations already but the problem I keep running into is the pricing structure that seems to be more prevalent now than it was 10+ years ago. It seems most service companies nowadays want to bill a service charge just for showing up, usually $50 to $92, then, once there, they want to quote a price based on the “book rate” of the repair, and then do the job only after the price is approved.

That doesn’t cut it for me. I don’t use “book rate” vendors because book rate pricing is a poor value for my property management owners. It’s inefficient and expensive, two things I despise. Maybe for Joe or Jane Homeowner who only need a service call once every few years, it’s not such a bad deal. You know the cost before the work is started and exactly what will be done. But I can’t operate a property management business under that pricing scheme. Instead, I need my guy to show up, fix the problem, and bill me a fair rate for time plus materials. I’m not worried about getting ripped off because, after nearly 20 years of managing and fixing rentals, I know what it should cost to fix things.

Here’s why my way is better and why I don’t use book rate people.

Suppose I manage your rental property and the tenant submits a repair request for a malfunctioning garbage disposal. If I can’t troubleshoot the repair over the phone and help the get the disposal unclogged and running, I’m going to send my Master Plumber Larry to the property. Larry charges by the hour.

While I have a plumber on the property, he’s not only going to fix the disposal, but he’s also going to go throughout the house and do a quick check on all of the plumbing at the property. He’s going to look under every sink for leaks, check the p-traps and make sure they aren’t loose, look at the water heater, check the commode flappers, check the washer connections, check the inside faucets for any leaks, and check the outside hose bibs for drips.

This entire preventative maintenance check of the plumbing might take an extra 5 or 10 minutes, literally, if everything checks out clean. I just bought my owner some pretty good insurance for about $10 or $15 extra time, and we accomplished the highest possible value for the service call to the property. If we do find other problems, we’ve done what we should have done and found them and fixed them while there, instead of going in to fix one thing and leaving without looking at anything else. If I have to pay somebody to drive to a property, I want more value than fixing just one item.

Likewise, if my tenant has a fridge not cooling, I’m going to ask my appliance guy to also check out the dishwasher and the range while there. I’ll also have him look at the washer hoses and connections to see if they are leaking. It won’t take more than a few minutes and will cost little to nothing extra at an hourly rate, even if billed in 15 minute increments.

Book rate vendors want to call the additional items an extra “diagnostic fee” and bill extra per item, not simply for the few extra minutes spent. So, in a pinch, when I’ve had to use book rate vendors in the past, and they tell me the diagnostic fee covers only the appliance they are sent to look at, I tell them “never mind”, and I never use them again after that job.

As a property manager, I pay well, I pay fast, and I’m about as low hassle of a customer as any vendor could want. I don’t sqabble about repairs, I just say “get it done and charge a fair price for your time”.

My owners know when they hire me that I’m not going to dilly daddle around trying to obtain permission to replace a water heater that has reached the end of it’s life, or replacing a worn out dishwasher. In fact, my plumber Larry, who I’ve also used since the early 1990s, doesn’t even have to call and ask my permission if he deems a water heater in need of replacement. He just takes care of it immediately and sends me the bill.

Sidebar for tenants: If you are a tenant, and your hot water goes out, you want a property manager like me and a plumber like Larry handling the problem because it’s going to get fixed asap and you’ll be taking a hot shower again real soon. I’m astounded that there are property managers out there who will actually tell a plumber “I need to get the ok from the owner”, and send the plumber away while he tracks down the owner to obtain permission about something for which there is only ONE choice! Meanwhile the tenant gets bent out of shape because now the owner wants a second bid and it’s been two days already. This scenario is a quadruple lose situation.

The property manager loses because he is revealed to be an incompetent idiot who can’t get a bad 15 year old water heater replaced without going through a rediculous approval process that should have been anticipated and agreed upon in advance of taking the property for management.

The tenant loses because he receives poor service for an important and time urgent repair.

The vendor loses because instead of proceeding immediately with the work needed, he has to leave not know when or if he’ll be called to return to do the obvious.

The owner loses because ultimately the work is going to cost more, and vendors don’t like wishy washy property managers who jerk them around with unnecessary bids, so in the end, the property manager has a less talented more expensive pool of vendors and thus a less efficient and more expensive property maintenance operation with which to service the managed properties.

By using only hourly service vendors who are trusted and empowered to just go fix the problem and charge a fair hourly rate, I can deliver a better quality maintenance service to our tenants (which helps retain them at renewal) and keep repair expenses and problems down for our owners.

Anybody know a good hourly appliance repairman? Send him to me, I’m interviewing!

Posted by Steve
7 years ago

Steve is a Real Estate Blogger, Husband and Dad, UT Austin Grad, Runner, Real Estate Broker and owner of Crossland Team and Crossland Real Estate in Austin TX.

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