Hiring workers to do a rehab and pricing

9 Replies

Hi guys,

I'm curious as to how the pros go about hiring workers and what are the average rates you pay?

Do you usually hire a "company" to do the rehabs? or do you have a trusted contractor that you keep using? Do you pay your workers per job or per hour? For a handyman type of worker how much do you pay per hour?

Thanks!

I'm a general contractor so I might only have info from what I would pay guys. Here's a rough breakdown. You could hire one general contractor and have him give you a total material and labor price. If you act as general, I would get sub contractor for each trade and get three bids per each project you want. If you decide to hire workers you could look at. If you'd like average numbers, use homewyse.com to get a area low to high number. I don't always trust that because paying more then high average for a really good contractor is worth it in my opinion.

$10-15 laborer
$15-30 carpenter
$25-35 finish carpenter
$50-100 plumber/electrician/hvac

I am aware that in some areas a license is required and in my area they are not. We attempt to hire individuals who have several skills and do quality work. We have them bid on the job and have a written scope of work that we both sign on to. We have them prove proof of insurance, sign waivers, independent contractor agreements and waiver of liens. Getting the work done at a reasonable price is part of the profit, you can't afford to pay retail prices. We become the General Contractor and hire individuals. Prices vary by region and many improvements do no require permits. Food for thought.

I've written a lot about this (trying searching the site), but there is really no "average"...you find that contractor pricing will tend to vary by:

- Location

- Type of contractor

- Skill of contractor

- Your negotiation skills

- Time of year

- Whether the contractor is a sub or GC

- Etc...

For example, Michael Do's pricing above -- in some places, I pay less than his low number for contractors; in some places I pay more than his high number. It really is impossible to generalize.

In terms of how to manage your rehab, that's up to you. If you have the skill and time to do your own management and just hire sub-contractors, that will save you a lot of money. But, if you don't have the skill or time, you're probably better off hiring a competent General Contractor.

Finally, as I've said many time before, I highly recommend NOT paying contractors by the hour, at least not until you have a good bit of experience and know how long things should take and how much they should cost. If you pay by the hour, you'll likely get the worse end of the deal if you don't know what you're doing.

When you hire guys to do the work , YOU become their EMPLOYER , workmans comp , insurance , taxes , etc . When hiring contractors , you are not the employer and they pay all of the above .

@Roy Gutierrez Hey Roy. IT DEPENDS. I am not familiar with your area but I would suggest looking on Craigslist and see what local handymen are charging for what kind of work to be completed. This is something you will need to familiarize yourself with. I am a carpenter here in the California market. You can look up capernters on O*net online and get a general idea of what they are getting paid.

@j Scott

I don't have the time and skill to manage my rehab, so in this case I'm hiring the general contractor. Is the GC then going to hire the plumber, electrician etc or are you vetting these individual people and the GC oversees them?

Originally posted by @Jason Fraser :
@j Scott

I don't have the time and skill to manage my rehab, so in this case I'm hiring the general contractor. Is the GC then going to hire the plumber, electrician etc or are you vetting these individual people and the GC oversees them?

Typically, you'll hire the GC and he'll take care of the rest. That doesn't mean you shouldn't be verifying that the GC is doing all the right things (pulling permits, ensuring the subs have insurance and are getting paid, etc), but you won't be responsible for finding the subs, negotiating pricing, managing them, etc -- the GC will do all this.

For this, you'll typically pay the GC between 10-20% of the total rehab costs...

Many variables exist that must be answered to answer that question. But in general, regardless of who, how much, what needs be done etc, i never front labor money. No deposits ever. I never pay for what i dont already have. Signed contract no problem. I pay in predetermined intervals as work is completed, holding the largest portion until 100 percent completion. i also always buy materials independent of contractor, which avoids conflicts of interest pertaining to quality of materials bought and reducing material costs to have more money pocketed to contractor on flat money jobs. How much to pay them depends on what the job is specifically. but i never pay someone hourly, always x amount labor paid in predetermined increments.

I generally hire "handymen/women" and pay them by the hour. Some specialty type stuff (like floors) the guys do the job by the sq. ft. (or sq. yard).