You’ve bought your property, gone over the inspection notes in detail.. and are ready to get started. Where to from here? This all depends on the route you’d like to take.
Someone will need to coordinate the contractors, make sure all work is properly permitted, keep tabs on work quality, make sure things are following a timely progression, and so on. Now to decide - should you manage everything yourself, hire a contractor, or hire a project manager? As everything in life, there are pros and cons to each.
Do it yourself
If you’re familiar with construction and have the time, managing everything yourself is typically the most cost effective way to go. You will be able to make decisions on the spot, negotiate pricing with every contractor you bring on , and are essentially saving the cost of coordination. If you’ve never before managed construction, it would be good to find a mentor and read up on everything you need to know about building construction - specifically the projects you will be managing. There’s nothing more expensive than completing a project only to find out that not a single contractor made recommendations for a crucial component. Take, for example, a client who recently oversaw construction on her own roof.
Not knowing any better, she didn’t make sure there was proper ventilation. Less than 1 year later, she started to have predictable moisture issues. While it would be nice if contractors gave advice, most will finish the job as quickly as possible - only doing what they’ve been directly told to do. This said, nothing comes for free. Do not underestimate how involved any construction project will be - this is more or less a full time job, especially for those novice in construction.
Hire a Contractor
If there are no budget concerns, hiring a general contractor will be the most time and energy efficient option. Contractors typically are licensed with 10+ years of experience, bring their own employees to complete most aspects of the job (sub-contracting for the rest), carry insurance that covers their team and your home for the duration of their work, and have the same goal as you of finishing on time. Most will additionally have discounted material rates with their vendors, and hopefully a few great connections when it comes to licensing.
Contractors typically will quote a job + materials rate based on the available information. If cost of materials or scope of work change, this may need to be re-negotiated. A good contract between you and your contractor will reserve a token percentage of payment for satisfactory completion of work, as well as a 1+ year guarantee on workmanship.
This said, hiring a general contractor on your project is like paying for the white glove service. Contractors are by far the most expensive route to take. Their fees are built into the cost, and their mark-up can be considerable - ranging anywhere from 25-70%. Depending on your market, there may also be a relatively lengthy wait before they can begin work.
Hire a Construction Project Manager
We like to think of project managers as the happy medium. This is the route to take when you don’t have time, energy, or experience enough to manage construction yourself, but also are budget conscientious. A project manager is more or less an experienced liaison of yourself. Depending on the agreement between you and your project manager, they can source all needed subcontractors, obtain permits, and oversee construction. Most will also offer a la carte service, letting you handle those aspects with which you feel comfortable.
A good project manager is your eyes and ears. Their loyalty is to you, yet their experience means your contractors should be happy (and efficient) as well. Depending on the complexity of your project, construction project managers can typically also juggle a few projects at once - meaning a smaller wait time for even the best of project managers.
Traditionally, project managers were hired for larger-scale commercial projects. However, with the influx of private investors in the residential real estate space, it is increasingly common to hire construction project managers for smaller residential projects. For residential projects, you can expect to pay 5-15%, depending on the type of job, level of involvement, and total job budget. Some may also quote an hourly or fixed rate - it really depends on your market and the scope of the project.