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Guest column: Can you be your own general contractor?

Posted on April 26th, 2023 By: Marlene Druker

Recently, when discussing budgeting for a residential addition and renovation project, I casually mentioned that general contractor profit and overhead is around 20 percent. My client asked the obvious follow-up: “If we are the general contractors, and do some of the work ourselves, can we save 20 percent?”

Unfortunately, the math is not that simple. The complete answer to this question — and its many variations — has to consider of the nature of residential construction and the role that general contractors play in it.

Time is money (in construction, too)

A contractor whose bread and butter is bathroom remodels can go from removing fixtures to posting “after” pictures in under two weeks. Like me, you probably know some do-it-yourselfers whose repeated delays caused a bathroom to be out of commission for the better part of a year.

Living with one less bathroom while you wait for tile to be in stock, for an electrician to have some time for you, for you to have time to pick up paint … may not be a big deal for you. The loss of use of the room for a longer time period may pale in comparison to the cost savings, especially if you also enjoy and are skilled at some of the tasks involved.

However, as projects increase in complexity, so do the number of moving parts and the possible reasons for it to stall. Experienced builders know construction sequencing and can line up materials and trades to minimize overall construction time. They also have ongoing relationships with suppliers and subcontractors and can acquire materials and schedule labor faster — and generally also at better rates — than individual homeowners can.

Having all or part of your house under construction for longer has a price. Its significance — from the minor inconvenience of cooking in your living room and eating more take-out to the hassle of living in your in-laws’ basement or the real cost of rent — will vary, but it should not be discounted when deciding whether you should pay a competent professional to run the job in a more timely manner than you could yourself.

Photo by Marlene Druker

Remember, you work too

Who’s going to be doing your job while you’re doing construction?

Some parts of construction projects can be done outside of regular business hours, but normal construction hours are weekdays between 7 a.m. and 6 p.m. If your job will prevent you from being available during those hours, the only way you will be able to be your own general contractor will be to take some time off and spend almost every break making phone calls and/or visiting the jobsite.

If you are the one who needs to resolve issues that arise and you can not be reached because you are doing your job, both the timeline and the quality of construction will be compromised.

Being a general contractor is a job. If you already have a job and have decided to be your own general, you now have two jobs. And the new job may not be compatible with the one you already have.

Even if your job is flexible or you are retired, you should consider whether family responsibilities and other commitments allow you to be “on-call” to attend to your building.

Count on some overhead

Some of the expenses that fall under the broad category of “overhead” in running a construction company will not apply to you overseeing your own job. But some, ranging from small things like porta-potty rental to bigger ticket items like insurance, will end up in your stack of bills.

A contractor who is doing several jobs is better equipped to arrange for and sometimes get volume discounts for overhead items. Don’t expect to save all overhead costs, you’ll be paying some directly.

You will pay for your education

People who manage their own construction projects learn a lot about construction. Unfortunately, in construction as in life, a lot of learning comes from making mistakes.

Mistakes are costly. Some can not be easily remedied — you will either accept their consequences or pay for repairs. Someone who has done a lot of construction has already made their share of mistakes and isn’t learning while building your house.

You also sacrifice certainty about construction costs and timelines when you do it yourself. People who do construction estimating and scheduling for a living are more accurate than someone doing it as a sideline.

But I’m cheap labor!

Maybe at this point I’ve convinced you that cutting out the general contractor is no bargain for you, but you would still like to save some money by doing some of the work yourself.

I’ve known several amateur carpenters, painters and tilers who can do these things as well as people who do them for a living. Be honest with yourself about whether you fall into this category and then talk to prospective general contractors about the possibility of taking on some tasks yourself.

Be prepared for them to be unwilling to allow this, for a variety of reasons, including that it may complicate their construction schedule. They may let you to do work yourself only under the condition that doing so voids their warranty.

A contractor standing behind their work and being responsible for fixing anything that might go wrong is no small matter — it is part of why you are paying them. You would likely be losing more by waving the warranty than you gain by saving money on some labor, so think carefully if this is part of a contractor’s agreement.

Can it work?

Here’s the good news about about people I know who acted as their own contractors and did some, or most, of the work themselves: their projects were not disasters (many turned out extremely well) and they spent less money. However, in every case that I know of, all the things I warned of happened, at least to some degree: The project took more time, homeowners needed to take time away from their regular jobs and activities, they made a few rookie mistakes that cost them time and money and aggravation.

As you can imagine, those who were most successful had a solid background in construction — most had spent at least part of their careers in construction or construction-related fields and almost all had plenty of experience with smaller home projects. They had a good sense of construction costs and methods. They knew which parts of the job they would have to hire subcontractors for and usually already knew a few local ones to call for bids from. Competent general management, organizational and accounting skills were also very important.

If you are considering managing a complicated home construction project, be aware of the limits of your knowledge, abilities, time and capacity to cope with inevitable stress and setbacks. There are other ways to save money on home construction and renovation! (Look for a future article on this topic.) Depending on your situation, experience and temperament, the most cost effective move might be to expend your energy on things you are already good at and that others will pay you to do, and use that money to hire good builders.

Marlene Druker

Marlene Druker, AIA, is a Gig Harbor based Washington State Registered Architect. In her practice, she has worked with both general contractors and owners who have acted as their own general contractors on residential new construction and remodel/addition projects.