How much should a general contractor make?

[flipper]

Since we own all the houses we remodel I don't really have experience as a "general contractor".

So, out of curiosity, how much do you think a general contractor should make as "profit" on a $10,000 bathroom remodel or a $25,000 kitchen remodel?

I'm looking forward to the contractors on the forums opinions as well as homeowners who have sub'd out their own remodels and people who have hired people.

flipper

[hoef]

Since we own all the houses we remodel I don't really have experience as a "general contractor".

So, out of curiosity, how much do you think a general contractor should make as "profit" on a $10,000 bathroom remodel or a $25,000 kitchen remodel?

I'm looking forward to the contractors on the forums opinions as well as homeowners who have sub'd out their own remodels and people who have hired people.

flipper

Most quotes that I have received that breakout contractor take show about 10% for the gen contractor. Not saying it is right or wrong but that is what I have seen

[spiderman]

Since we own all the houses we remodel I don't really have experience as a "general contractor".

So, out of curiosity, how much do you think a general contractor should make as "profit" on a $10,000 bathroom remodel or a $25,000 kitchen remodel?

I'm looking forward to the contractors on the forums opinions as well as homeowners who have sub'd out their own remodels and people who have hired people.

flipper

I pay $250 plus 10% of agreed subcontractor costs to the property management company for low end rental rehabs.

[Mr. Chenevert]

I see 10% as a fair level of profit.

[RedScare]

I see 10% as a fair level of profit.

That's assuming that overhead is not coming out of the profit. If it is, the 10% seems low. Frankly, I want my subs to feel like they are not getting screwed. They work harder if they think it is a fair deal. I'm thinking 20% is more in the ballpark. A plumber friend offered to redo my plumbing for $20 an hour and I told him that sounded too cheap. I offered $250 a day. He did spectacular work, and never complained about coming to do the work. And $32 an hour is STILL way cheaper than a normal plumber would charge.

EDIT: The 20% would be for a guy actually doing the work. For a GC, 10% after overhead is probably not that bad.

Edited October 14, 2008 by RedScare

[jscarbor]

10% sounds pretty low to me? I would have thought 20%+. 10% barely covers all the gas to get to and from a job site.

[Mr. Chenevert]

Net profit.

10% seems fair to me.

[flipper]

Great opinions so far. Keep 'em coming!

flipper

[lwood]

Net profit.

10% seems fair to me.

Considering the liability he incurs, I would be hesitant to go with a contractor getting only a 10% margin. His main incentive is to cut corners instead of doing a quality job. There's always someone who will do it cheaper. The trick is to find someone to do it right.

[cgallagher]

I think most remodeler's will put 25% - 35% in their quotes. But will normally end up with about half that.

[flipper]

OK, as a spin-off/add-on to this question...

On a "cost-plus" job where the GC is just tacking on a % to whatever he or she is paying the subs and paying for the materials, how much % wise do you think is fair?

flipper

[Mr. Chenevert]

OK, as a spin-off/add-on to this question...

On a "cost-plus" job where the GC is just tacking on a % to whatever he or she is paying the subs and paying for the materials, how much % wise do you think is fair?

flipper

haha.... I dont do cost plus jobs. Unrelated to the world of home remodeling, I have had very bad experiences with the cost plus model. It is so difficult to keep track of changes (and lord knows there are always change). Its like squeezing a ballon.

[jm1fd]

Thinking about quitting flipping and becoming a GC?

[cgallagher]

OK, as a spin-off/add-on to this question...

On a "cost-plus" job where the GC is just tacking on a % to whatever he or she is paying the subs and paying for the materials, how much % wise do you think is fair?

flipper

For remodeling jobs, it should be 12-20%. For new construction, it could be 10-15%. It depends on the soft costs that will be associated with the job, which are dictated by the homeowner. For example, a contractor may add up to 10% for a full time supervisor that is permanently stationed at the job till completion. It's important to note that although the GC is guaranteed money, they will work a lot harder for it. When the homeowner has the ability to make changes as they go, it creates a lot more work for the contractor.

[joelorlandokitchen]

The Kitchen Remodeling is important in your house because it is the center of your family’s day-to-day living. It is actually a favorite for many, given that it is the source of all foods and refreshments. As such, you want your kitchen to be beautiful, functional, and welcoming. If this does not describe your kitchen, hiring a Kitchen Remodeler is the solution to having the kitchen of your dreams. Orlando Kitchen Remodeling