# Commercial Property Owner with a plow



## JKA (Aug 20, 2009)

I own five 4plexes in Montana and recently purchased an 02 Chevy 2500HD with a Meyers plow to do the snow removal myself. I also have a 4wheeler with a blade/warn winch and a couple kids with strong backs properly motivated by snowmobile $ as shovel operators. I have also been asked by a couple other commercial property owners in the neighborhood if I would do theirs as well. Thanks in advance for the answers to a few questions - here goes:

1. I just have $300,000/500,000 liability on the truck and its in my name, do I need "plow" insurance for doing my own property? I use USAA and located in Montana. What if I charge others for the service? If I did I would charge what they have been paying and be more reliable and do a better job - particularly with the shoveling.

2. What do you reccomend charging for a "standard" 8 car lot that is level and square which is what most of these 4 plexes have. I would do the entry way shovelling and run the 4wheeler downt he sidewalk and salt the walkways. We do not have to haul the snow away here, just push it out on the street.

In the residential market here I see a definate need for a reliable, professional service. There are a lot of people doing it but most are unreliable or dishonest or both, which is why I'm doing it myself. If it goes well on a small scale this winter I may add this service to my rental business. I am a wildland firefighting helicopter pilot so I've got plenty of free time in the winter.

Thanks again


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## Camden (Mar 10, 2007)

JKA;795499 said:


> 1. I just have $300,000/500,000 liability on the truck and its in my name, do I need "plow" insurance for doing my own property? I use USAA and located in Montana. What if I charge others for the service? If I did I would charge what they have been paying and be more reliable and do a better job - particularly with the shoveling.


Your insurance agent is more qualified to answer this question than anyone on here but if you're plowing properties that you don't own and are doing it for money then you need protection.



JKA;795499 said:


> 2. What do you reccomend charging for a "standard" 8 car lot that is level and square which is what most of these 4 plexes have. I would do the entry way shovelling and run the 4wheeler downt he sidewalk and salt the walkways. We do not have to haul the snow away here, just push it out on the street.


Tough call on this one. The "going rate" for a lot that size where I live is probably way different than where you are. Contractors that are just an hour away from me can charge a lot more than I can. It truly varies that much from place to place. 
Bidding can be tough. Use the search function at the top to read up on what others have said about the topic.



JKA;795499 said:


> In the residential market here I see a definate need for a reliable, professional service. There are a lot of people doing it but most are unreliable or dishonest or both, which is why I'm doing it myself. If it goes well on a small scale this winter I may add this service to my rental business. I am a wildland firefighting helicopter pilot so I've got plenty of free time in the winter.


Sounds like you've got a good opportunity. There are a lot of guys on this site who run very successful businesses so you're at the right place. Good luck


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## JohnnyRoyale (Jun 18, 2006)

You must be doing something right if you own 5-4 plexes. You may quickly realize this add-on may not be worth the aggravation, esp if your going to do it for the price the others were charging as stated.


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## Mick (May 19, 2001)

From a federal tax perspective - you can write off the cost of all equipment used for plowing your own rental properties. It would also be insured (usually - check w/your ins agent) under the policy for either your home or rental. (My situation is a little different as the home and rental unit abut each other.)

If you plow property you do not own; this is a whole new ballgame. Regardless of whether you are paid, you need liability insurance. If you receive payment in ANY form (money or beer), you are a commercial entity and need to report any payment in monetary equivalent ( ie cash value of the beer) to the IRS.


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## JKA (Aug 20, 2009)

Thanks to all for the insight. I did call my USAA insurance and think I have that part solved. No problem if its just my own but some additional coverage (about $500.00/year) for commercial plowing. 

I did some cost calculations to evaluate if this is a worth-while endeavor to add to my rental business. Looking at the costs I broke it down into 3 parts on an hourly basis and came up with:
1. $30.00/hour - Direct operating costs (fuel and preventive maintenance): 8 gallons per hour x $3.00/gallon plus $6.00/hour for preventive maintenance. Will probably add fuel surcharge triggers in my contracts.
2. $15.00/hour - Indirect operating costs (insurance, equipment depreciation, unscheduled maintenance, etc.) Not adding anything for advertising because I have more than enough work for one truck lined up if I want it.
3. $40.00/hour - Labor for truck driver and snow shoveler. $10/hour snow shoveler + $20/hour plow truck driver + $10/hour administration and other costs associated with contract labor.

$85.00/hour is my total for my initial gouge at costs. Does this look close to accurate to you veterans out there? Do you calculate costs in a completely different way? Am I missing anything?

I've been paying about $40.00/plow + $10.00/snow shovel (two different contracts because nobody in town will do both) for total of $50.00/event which I estimate myself and a snow shoveler can easily do 4 per hour. So I feel we can bill out approximately $200.00/hour less costs of $85.00/hour for a margin of approximately $115.00/hour. Does this look accurate? 

Thanks in advance for you advice.


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## Mick (May 19, 2001)

I would add for increased potential for repairs and emergency services (ie tow truck - and it WILL happen). I used to try to average around $125/hr (I'm out of the "game" after last winter).


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## fordzilla1155 (Jan 10, 2004)

If you only pay $50.00 per event, why buy your own set up?


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## JKA (Aug 20, 2009)

$50.00 per event seems quite reasonable to me as well and I'm happy to pay someone who actually does the job he says he is going to do. I have tried several operators in town, none are reliable and about half are quite dishonest. I have ample free time in the winter to do it myself and see it as an opportunity to generate some revenue by doing other properties which I know the owners are having the same reliablility/integrity issues I've encountered.

Just an example: Received a call from a tenant a couple winters ago that the mailboxes were "laying on the ground". I'm not a cop but stopped by to investigate to find snow plow tracks over the top of the post and all four mailboxes. Called the plow driver and he knew nothing about it of course - he did send me a bill for that day though!


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## Mick (May 19, 2001)

Mail boxes are usually damaged by the State/County/Town plow driver.


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## Bajak (Nov 12, 2008)

Mick;798704 said:


> Mail boxes are usually damaged by the State/County/Town plow driver.


I agree. My Dad plowed for the county and it was a game to see who could knock down only the councilors mail boxes with out hitting the neigbours mail boxes. It's harder than one might think.


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## pohouse (Jan 26, 2009)

One additional thing to think about if you contract your services to others is a backup plan if your truck breaks down. :crying:And it will happen. Find a backup sub-contractor, or someone who you could call to finish up. You will of course be paying them, however your customers get serviced.


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## JKA (Aug 20, 2009)

I have made arrangements with a guy with a plow truck to serve as a backup. If he is not available I can still use his truck.

Another question?? I continue to see references to general liability insurance on this site, can anybody elaborate?

Thanks


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## Luther (Oct 31, 2007)

If you do commercial properties and plan to use addition souls (sidewalk labor, etc.) put Workman's comp on your to do list as well as your general liability.


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## Mick (May 19, 2001)

JKA;799807 said:


> I have made arrangements with a guy with a plow truck to serve as a backup. If he is not available I can still use his truck.
> 
> Another question?? I continue to see references to general liability insurance on this site, can anybody elaborate?
> 
> Thanks


Gen. liability is insurance in the event someone is injured as a result of your action or inaction. In this case, if you are not plowing anything besides your own property you should be covered under the insurance you already have. Usually, you would only need additional general liability insurance if you are plowing other than your own property. But, always check with your insurance agent as the laws change from state to state and insurance company to insurance company. What you want to do, is find out if your backup guy has liability insurance. If he does not, you will have a problem collecting any damages he does. Also, if you pay him, you can deduct that as a business expense. The problem is that many plow guys do not pay taxes; therefore do not want you listing them as a recipient of any income from plowing.


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## Herm Witte (Jan 27, 2009)

"In the residential market here I see a definate need for a reliable, professional service. There are a lot of people doing it but most are unreliable or dishonest or both...."

I'm dissappointed in the slam to our industry. That's quite a statement.


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## big acres (Nov 8, 2007)

Herm Witte;801080 said:



> "In the residential market here I see a definate need for a reliable, professional service. There are a lot of people doing it but most are unreliable or dishonest or both...."
> 
> I'm dissappointed in the slam to our industry. That's quite a statement.


As an owner/manager of multiple rental properties, he has experience on the other end of the deal -which many here do not. I think it is our fellow plowers that have given the poster this bad taste. Based on his thread, he clearly has a better grasp of this business than many people on this site... and he has never "dropped a blade" yet. Just my .02


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## TrevorsLawnCare (Dec 4, 2008)

big acres;801110 said:


> As an owner/manager of multiple rental properties, he has experience on the other end of the deal -which many here do not. I think it is our fellow plowers that have given the poster this bad taste. Based on his thread, he clearly has a better grasp of this business than many people on this site... and he has never "dropped a blade" yet. Just my .02


Agreed. BTW, JKA, what part of the big sky state are you in? My dad grew up in Absarokee and I have family dotted across that beautiful state. My uncle is in Big Timber now.

Trevor


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## JKA (Aug 20, 2009)

Many thanks to everybody. You have answered several important questions. I now have general liability insurance and found my budget was fairly accurate. We will see how this winter goes.


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## palmtree907 (Sep 25, 2009)

This post is perferct for me to post a reply. Here's my *3* cents worth. As a Realtor and property manager, I for years had a need for snow removal services. Finding someone who will do residential on demand was next to impossible. And contracting for the 4 plexes was a nightmare as the guys who would bid all turned out to be unreliable. I finally bought a truck and plow and started my own side gig. I got out of property mgmt. as it wasn't worth the hassle and got the contracts to plow the units instead. I work only on referral with all of my Realtor colleagues, and since It isn't my primary business, the additional coverage for me to plow is an addtional $60 a year. I don't do walk ways, although this year I have been asked to do ONE sidewalk at a 4 plex. The GL policy is gonna be $600 a year and that is going to be a pass through cost on top of my regular rate. If he doesn't want to pay it that's fine, I don't need that walk way business.
I do just fine in real estate btw, I just provide an extra level of service for my listing clients in the winter (as do many of my colleagues who call on me to go do their clients homes as well).


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