Once you've found the ideal property and decided on the perfect floor plan, building your dream house seems only a few steps away. You want to obtain the financing and get to work, but one major decision still stands in your way. Will you attempt to be your own general contractor or hire a professional?
Although there are obviously pros and cons to both situations, many people mistakenly believe that being their own general contractor will automatically save them money. It does happen in some cases, but it is most certainly not a foregone conclusion and there are certain situations where this seemingly good plan can go very wrong.
Advantages to Being Your Own General
It costs money to hire a professional general contractor. Some claim that by acting as your own you can save from 15 to 30 percent of the overall cost of your new home. When you are looking at a $300,000 to $400,000 house, that figure is fairly impressive.
So how could a situation arise where a person will not save that kind of money?
Time Is Money
The old adage is still true - time is in fact money. Acting as a general contractor is a time-intensive job that will require many hours spread over many months as the construction progresses. Unless you are retired or otherwise earning a passive income, you will need to take a certain amount of time off work to get the job done well. Add up the lost wages or lost opportunities and factor that into the overall cost of being your own general contractor.
You also need to consider the length of time this project takes when you cannot give it your full attention. Often a man or woman who acts as their own general contractor will do so on a part time basis, working at it over the weekends, during half days off work or through the evenings. This will undoubtedly push the construction schedule back when compared to the pace a professional, full time general contractor can reasonably expect to make.
Twice the Cost of Living
The longer it takes to complete your house, the longer you are paying for two residences. Even if you are currently renting during the construction phase, the costs will add up. Don't forget to include the cost of insurance at both properties as well as any taxes you are paying at your current residence. If a general contractor can have your home done even one month sooner, they will have saved you the cost of maintaining those two households for a full month. Realistically speaking, a professional contractor can have the job done in 50 to 60 percent of the time it will take a part time DIY general contractor.
Although many will look at the cost of hiring a general contractor and seriously consider doing it on their own the situation is much more complicated than that. By accounting for lost wages that you will sacrifice when acting as your own general, the savings are whittled away. Don't forget to factor in the costs of keeping up two residences for the extra time the project will take due to your amateur part time management. With these things in mind, it should become clear that hiring an experienced and professional general contractor is a worthwhile investment in your dream home.Posted by: diana