Property Preservation Jobs in Real Estate

Property preservation jobs are open nationwide. It is even possible to approach them as an online gig. In this article, we will discuss how.

Let’s begin by describing what property preservation jobs entail. Property preservation contractors operate by providing a range of services to maintain and protect properties that have been foreclosed, vacant, or in need of safeguarding.

The main goal of property preservation jobs is to ensure that the property remains in good condition and retains its value en route to being sold again. Here's how property preservation contractors typically operate and earn money, and how you may do the same.

So far in 2023, foreclosure rates are increasing noticeably in the country (over 20% by some estimates), with the top Real Estate markets in the lead: California, Texas, New York, Florida, followed by secondary markets.

In many economically depressed neighborhoods, it is not unusual to see Real Estate properties that look abandoned. Some even get vandalized, which is something that title owners want to avoid and will pay to defend against.

That’s where you would come in.

How Do Property Preservation Jobs Work?

Let’s outline step by step what property preservation jobs entail and what role you may be called upon to play. We will also touch on how some of these tasks can be done online efficiently.

Contracting with Clients

Property preservation contractors typically enter into contracts with various clients, such as banks, mortgage companies, real estate investors, and government entities. These clients hire contractors to perform specific preservation tasks on properties within their portfolio.

By setting up a convincing online operation, you can canvass and reach out to a higher number of potential clients than if you tried to do it in person one at a time.

Once contact has been established, particularly if you have established a trust level or track record, negotiations can begin in earnest.

If you are brand new, don’t forget that offering discounted or some services for free at first goes a long way in getting your foot in the door.

Assessing Property Condition

Once you are assigned a property, you or your outsourced subcontractors can visit the site to evaluate its condition.

They identify maintenance, repair, and preservation needs, such as securing the property, removing debris, addressing plumbing or electrical issues, repairing damage, and maintaining the landscape.

Estimating Costs

Based on the property assessment, you will then create a detailed estimate of the required tasks and associated costs.

This estimate must be shared, reviewed and discussed in detail with the client to be approved before any work begins.

Performing The Work

Once the estimate is approved, you and your subcontractors schedule and carry out the necessary maintenance tasks.

This can include securing doors and windows, winterizing the property, cleaning and repairing the interior, removing hazardous materials, landscaping, etc.

Subcontracting and Managing Vendors

For this to be an online gig, your role has to be more of an admin than an actual physical contractor. Once you have secured the contractual agreements, you subcontract actual tasks to other vendors or professionals.

You may also have a trusted overseer who will hire electricians, plumbers, landscapers, or cleaning services to handle specific aspects of the job as needed.

Whether you do the work yourself or remotely through outsourcing, it is essential that you manage and coordinate all tasks and subcontractors to ensure timely completion of the work.

How Does Billing and Payment Work?

After completing the preservation work, the contractor submits an invoice to the client, detailing the services provided and the associated costs. Payments are typically made according to the agreed-upon terms and payment schedule outlined in the contract.

A pertinent question often becomes the following: If outsourcing the preservation work, do you have to pay for the services in advance or can the work be paid when the funds are received?

The payment terms for the preservation work and/or outsourcing can vary depending on the agreements between the property owner, the preservation contractor and the subcontractors or vendors. Here are a couple of common scenarios:

Paying Subcontractors in Advance

Some subcontractors or vendors may require upfront payment or a deposit before they start working on the project. This is often the case when the subcontractor is not familiar with the property preservation contractor or there is a history of payment issues.

In such cases, the property preservation contractor would need to pay for the subcontractor's services in advance and then seek reimbursement from their client when funds are received.

Paying Subcontractors Upon Receiving Funds

In other cases, property preservation contractors may negotiate payment terms with subcontractors that align with their own payment schedule as set up with the client.

For example, if the property preservation contractor receives payment from their client upon completion of the preservation work, they may arrange to pay the subcontractors after receiving those funds.

This allows you not need your own money upfront and use the funds received from the client to cover expenses of outsourcing the work to subcontractors.

Regardless of which method is used, all billing and payment terms should be clearly established and agreed upon in contracts or agreements to ensure transparency and avoid any payment disputes. Open communication and clarity regarding payment expectations with subcontractors should also be maintained for a good working relationship.

Do Property Preservation Jobs Provide Reliable Work and Solid Gigs?

The property preservation industry can provide a steady and potentially profitable gig for contractors, but it's important to consider a few factors before starting:

Market demand

As stated above, foreclosure rates are currently on the rise nationwide. The demand for property preservation services can vary depending on factors like the local real estate market, economic conditions, and foreclosure rates in the area where you live.

One of your key tasks will typically be to research for opportunities in your target market to assess the potential for securing contracts that can generate consistent income.

The good news is you can do this online (hence one of the reasons this could be a viable online gig). Here is a list of free sources that regularly post and update foreclosures listings:

• Bank-owned property listings (example: Bank of America-owned properties and foreclosures)
• Foreclosure.com
• HomeSteps.com
• Hud.gov
• Realtor.com Foreclosures
• RealtyTrac.com
• Redfin.com
• MLS.com
• Zillow.com Foreclosure Center

This is not an exhaustive list by any means. Also, depending on your local area, you might be able to find properties not listed in nationwide repositories.

Contract Availability

Securing preservation contracts may require building relationships with banks, mortgage companies, or real estate investors, which can take time and effort. Remember what we said earlier about getting a foot in the door.

It's important to network and establish connections to increase your chances of obtaining contracts. Clients often have a portfolio of properties in need of maintenance and preservation. You must be prepared to compete to put your services in front of them.

Additional revenue streams: In addition to the preservation services, contractors may generate additional revenue through services such as property inspections, property management, or other value-added services requested by the clients.

It's important to note that the specifics of how property preservation contractors operate and earn money can vary depending on the region, local regulations, and the specific agreements between the contractor and their clients.

Do You Need Money or Expertise to Get Started in This Industry?

Startup Costs

While you don't necessarily need a large amount of money to get started as a property preservation contractor, there are some costs involved, but these may be nominal, including the cost of necessary licenses and certifications.

If you do the work yourself, you may also need to purchase tools and equipment and to invest in a reliable vehicle for transportation. If not, just plan to cover general business expenses such as insurance and marketing.

Having some capital or access to financing options can be helpful in covering these initial expenses, but startup capital does not have to be substantial.

It is possible to receive funds for a preservation contract before the work is completed. The payment terms and schedule can be negotiated between the property preservation contractor and the client.

Here are a few common payment scenarios:

Upfront Payment

In some cases, clients may agree to provide an upfront payment or a portion of the estimated cost at the beginning of the project. This is often done to help cover initial expenses, such as securing materials or subcontractor fees.

The specific amount and terms can be negotiated based on the contractor's needs and what the client is willing to work with. The key word is “negotiated”.

Milestone Payments

Instead of a lump-sum upfront payment, clients may agree to release payments at specific stages of the project. For example, they might make partial payments when certain tasks are completed, such as securing the property, initial cleanout, or major repairs.

Progress Billing

Another option that can significantly help the contractor is to submit progress billing based on the percentage of work completed. As the contractor, you provide regular invoices or progress reports to the client, detailing the completed work.

Per this prior arrangement, you can request payment for the corresponding portion of the estimated cost. This allows for ongoing cash flow during the project.

Final Payment Upon Completion

This option is the most difficult for newbies with limited financial resources. In some cases, the client may prefer to make the full payment upon the satisfactory completion of the preservation work.

This ensures that all the agreed-upon tasks are finished before releasing the funds, but could put the contractor under significant financial pressure.

Skills and Knowledge

Property preservation work often requires a diverse set of skills, including basic construction and repair knowledge, landscaping, property management, and compliance with local regulations. However, you could also approach it as a general entrepreneur and hire help and expertise as needed.

It's important to assess your existing skills and determine how you plan to operate, and whether you will need additional training or certifications to provide quality services and meet client expectations.

Keep in mind that, as in most fields of entrepreneurship, property preservation work can involve unpredictable schedules, varying workloads, and the need to handle different types of tasks.

Being flexible, adaptable, and able to manage multiple projects simultaneously can contribute to your success in property preservation jobs.

Do not commit substantial amounts of your money in a quest to land property preservation jobs. Conduct thorough research, create a business plan, and assess your personal circumstances, skills, and financial situation before embarking on a preservation contracting gig.

Consulting with experienced subcontractors that you trust can also provide you with valuable insights and guidance before and during your attempt at this venture.

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