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Should you be your own general contractor?

By Todd Fratzel on Home Improvement Cost Savings

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Should you be your own general contractor next time you do a major construction project around the house? Will being your own general contractor save you money? Will being your own general contractor save you time? Will being your own general contractor get you the best products for less money?

These are questions I hear from home owners all the time. Those are questions I asked myself years ago when my wife and I bought our first home while I was still working as a consulting engineer. In fact, I tried out that role when we completely renovated our 1950’s ranch. Today I manage a large division of a construction company that provides both general contracting services and full design build construction management services. This short informational post will give you my thoughts on those questions.

Should you be your own general contractor?
This is a hard question to answer in my opinion. I’m writing this post today because last night my wife and I were watching the TV show Flip This House on A&E. The woman flipping the house was an accountant by trade and decided she wanted to flip a house so that she could make some money and still spend time at home with her kids. Her flip was fairly successful but she made quite a few mistakes along the way that reminded me why it’s a good idea to hire a general contractor.

What most people don’t realize is that general contractors have two big advantages over the typical do-it-yourself home owner. First off they have relationships with sub-contractors that make it much easier to develop a schedule and stick to it. When I call an electrician and ask him to start a job the day after the plumber has finished I know he will show up and get the job done. When we lived in our first home and I called an electrician as Mr. home owner the guy basically said he’d show up as soon as he could but that might not be for a few weeks. The reality is most sub-contractors make general contractors their priority because the sub-contractor is the guy feeding him 75% of his work. So if you plan on being your own general contractor don’t plan on having a sub-contractor at your beckon call.

Will being your own general contractor save you money?
Again this is a hard question. Depending on the situation I think you can save some money. However, that may very well come with a time price tag. You can probably save money on the management side of your project but you most likely will not get it done as fast as a general contractor. Depending on how you finance the project that money saved might be used paying extra finance charges so it really does depend on the project.

I’d also argue that hiring a good general contractor may actually save you money. This is especially true if you try managing the project yourself and end up making poor decisions. Also, a really good general contractor may be more expensive on the initial estimate, however, when the job is complete his estimate will probably still be accurate and the low bidder might have hit you with lots of change orders.

Will being your own general contractor save you time?
I would say that almost every time you compare the time frame of a project that a general contractor built versus a project that was managed by the home owner the general contractor will have completed the project quicker. Again the reality is that a general contractor has more resources and a very serious interest in completing the job a quick as possible and moving on to the next project. The general contractor knows exactly what sequence things need to be done in, knows which inspections are required at the appropriate times and how long each task will take. That knowledge gives the general contractor a serious leg up on you even if you’re fairly knowledgeable about construction.

Will being your own general contractor get you the best products for less money?
Often times people think that general contractors are looking to use the cheapest products or “contractor” grade in order to pad their profits. I don’t think this is the case with reputable contractors. The reason I say this is fairly straight forward. When I build a project for a customer I like using the best quality products that the project can afford. By using the best quality products you reduce the likelihood of having call backs for warranty work. I’d rather spend a few more dollars on better products and know that I won’t be returning to fix a door knob that was 10% cheaper.

My Advice
My advice is if you’re planning a major renovation or new construction project to sit down and evaluate your skills, construction knowledge, communication skills and connections within the construction industry. If you have good connections and a strong working knowledge of the type of project you’re going to build then it may be a good idea to take control of the general contractor role for your project. If nothing else some of you may find it very interesting and fun to work in that role. Expect to spend many hours chasing down sub-contractors, estimates and material orders if you want your project to be a success. The other thing you’ll want to do is spend plenty of time planning the project and asking lots of questions from each of your sub-contractors. Ask them how long their task will take and which tasks need to be done before they show up on your site.

The other thing you’ll really want to do early in your project is find out if your bank or financial institute will allow your to act as the general contractor. There are quite a few banks that will not allow you to fill that role. You may not end up saving any money or time but you may find that you enjoyed the battle! Have fun and good luck.