In today’s housing market, the interest rates are as low as they have ever been. If you are ready and able to build a new home to live in, this could be the time to do it! You are thinking to yourself, ” I have friends that work in all different trades of contracting and could subcontract out all of the work and get quite a bit of equity in the home immediately by doing so.”
You may want to consider the pro’s and con’s of the situation. You have a bid from a General Contractor for the project from start to finish. Their total estimated cost is $ 225,000.00. The actual cost for the labor is only $ 185,000.00. Where does the other $ 40,000.00 go? Is that straight profit for the Construction Company? I think that I could save that $ 60,000 if I just act as my own GC, etc.
The most important though of building you home should be that this is the biggest investment of your life. You do NOT want to cut any corners. Is this something that you could confidently accomplish? If you feel the answer is yes, please keep reading. If not, start searching for the highest recommended GC you can find!
When you are building from the ground up, that means that you will have to deal with county and city inspectors to make sure that all of the proper permits are pulled and that the jobsite is protected. All of the subcontractors need to be lined up and scheduled to be sure that they can come to work, and be as efficient and cost effective as possible. The same also holds true for major home improvement projects when homeowners higher subcontractors to perform construction related work.
The GC should have their efficiency down to the minute, and the relationships with their subs should be rock solid. This is the piece of mind that you pay for when using a Contractor. But, in addition to that, it is the GC’s responsibility to ensure that the subs that are being used are properly insured. Most importantly, ensuring that each subcontractor has active workers compensation insurance and has added you or him as an additional insured on their policy.
Building inspectors will drop by job sites and speak to the General Contractor and request proof of insurance coverage from the GC and or subcontractors. If the GC does not have their own policy, than each sub must provide proof that they have their own coverage.
If this information can not be provided, the most drastic action that could be taken is a stop work order issued by the inspector. Meaning, all work stops, until the proper coverage is in place. This is your responsibility as the home owner to ensure that the person you have hired to build your home has the proper credentials.
Of course, if you have never built a home before, you may not know about this. Not having the proper coverage could cost additional time and also thousands of dollars onto the bottom line of the build.
It is always important that you do some research to make sure that your dollars are working for you to their fullest potential. If you are ready, able and capable, by all means do what you do. But if you are not prepared to deal with any situation that arises, just remember, that some things are better left for the professionals.
