Hiring a General Contractor vs. Managing the Project Yourself

Home Builder with New City Construction

People often wonder whether or not it makes sense to hire a general contractor (GC) for their home remodeling or 203k project. It really depends on the nature of your project, your construction knowledge and the free time you have available. But first, let's talk about cost.

As with any service, there is a cost to hiring a general contractor; they have to pay their staffs and make a profit for the company. However, unlike some other service providers where the fee is explicit -- like doctors or hair stylists -- a general contractor's management fee is often buried in the price of the project. For this reason, people sometimes think of GCs like retail stores, which buy a product and resell it at a profit. That's really not the case. A general contractor is a service company, providing construction expertise, planning, management, problem solving, advice and service. If you have the time and expertise to do that job well, then maybe you can manage your project on your own. But, be honest with yourself about the commitment required. Managing a large construction project takes time, expertise and attention.

For the right kind of project, a good GC should save you money in the end, because it will get the work done much more quickly than you could, with fewer mistakes and rework. And, when problems come up during the project, it can work with you to value engineer the most cost-effective solution. Plus, the general contractor should manage the subs to ensure you get a quality product -- saving you money in problems and maintenance down the road.

The larger and more complex your project is, the more likely you are to benefit from a GC. It's easy to understand the extremes. For example, if you are just having your bathroom painted, you don't need a GC. If you are building a custom home, you probably do. It's the projects in the middle where the decision gets more complex. In deciding whether you need a GC for your project, ask yourself the following questions:

  • How many trades are involved? Multiple trades (e.g. electrician, framer, drywall, carpenter, painter) require planning and coordination. A well-run project follows a particular schedule. One task closely follows another, and in most cases, cannot proceed if a required decision remains unmade for any item in the chain. The more subs your project needs, the more likely you are to benefit from a GC. Most people need help if their project requires four or more trades.
  • Do I know how to access reliable subcontractors? Remodeling projects rely on good subs that will prioritize your project above others. GC's have these relationships and can exert their buying power over their trusted subcontractors to get them do what they want when they want. If you also have these kinds of relationships -- or know people who do -- then you are better positioned to manage your own project.
  • Do I understand the process? If you know how your project is supposed to proceed -- from beginning to end -- then you are better suited to run it. If you don't know which trades come first and how they interact with one another, it's best to hire a GC.
  • What are the permit requirements? Permitting laws vary from jurisdiction to jurisdiction. However, one constant is that permitted work is harder to manage than non permitted work. In most places, you can replace the finishes in your home without a permit. However, once you include mechanical and structural work in your project, the permit office usually is involved. If your work requires permits, consider a GC.
  • Do I know enough about the work being done to understand if I am getting a good product? Trades are like everyone else. They have good days and bad days. They fight with their girlfriends and get locked out of their cars. On good days, they may work hard and do a great job. On bad days, they may rush through the work just to get done. If you know enough to recognize the difference and make them correct their shortcomings, then you can manage your own project. If you have to rely on the subs themselves to tell you if the work was done right, then you probably need a GC.
  • Do I have the time? Don't kid yourself. Managing a remodeling project takes work every day that it is going on. Subs need to be coordinated, materials assembled, inspectors met and on and on. If your job affords you the flexibility to be on the job site as needed during the day, during the week, then you might be able to manage your own project. If you can't be there to oversee the work, bad things that will cost you extra time and money will happen in your absence.

Of all the questions in the list, the last one is the most critical. You can talk to friends to find great subs, get needed advice from experts, and even hire an inspector to make sure the trades are doing quality work, but you can't be in two places at once-- no matter how hard you try. If you can't commit the time, and you can't be on site when work is being done (typically 7-4, Monday to Friday), then you can't competently manage your own project.

In our next post, we'll talk specifically about the work that a GC does -- all of the tasks that are required for a home remodeling project to proceed smoothly.


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