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To keep remodeling costs under control, you need to understand and manage the four key remodeling cost drivers: the design of the remodel, the materials you use, who manages the project, and how you pay for it. Lets review ways to save money on remodeling with smart project management.
There are three different project management options for you to choose from:
- Hire a general contractor
- Manage the project yourself
- Hire a fee-based project manager
General contractors will do the project management for you and usually do some of the work themselves. Often, the general contractor will do the framing, doors, windows, finish work, and fixtures, then subcontract with others to do the rest of the work. However, there are no hard and fast rules here. General contractors typically provide a fixed bid for your project but may also charge for the hours they work and the materials they use (time and materials).
General contractors will not manage the project for free. They include in their fixed bid a fee for their management activities and/or mark-up what the subcontractors charge to cover their expenses. General contractors will also take care of paying all the subcontractors, so instead of writing twenty checks you only have to write one, to the general contractor. To better understand the costs of a general contractor, try the "manage it myself" option in the Remodel-or-Move Calculator at www.remodelormove.com.
Another option is to manage the project yourself. As described above, the role is primarily coordination and decision making. Even if you hire someone else to do the project management, you still have to make many of the decisions yourself, so taking care of the coordination is a very reasonable option. Even if you don't have construction experience, there are resources available to help along the way. Don't let a lack of experience sway you too much. The more important question is, do you have the time and interest to take on and complete this project? It can take an hour or two each day to keep up, make calls, and make decisions. If you have other things you would rather do, go do them and hire a general contractor. If you don't like learning new things or the stress that comes along with hiring subcontractors, again, you are better off hiring a general contractor. However, if you have time, good people skills, strong organizational ability, and you enjoy learning new things, it can be quite an adventure.
A big part of taking this on yourself is finding and hiring subcontractors. With a big project, this may take time. If you consider that you may need six or more different skills (electrical, plumbing, drywall and texture, and so on), you will have to interview quite a few people before picking the right person or company for each task. This is where networking helps. One good subcontractor will often know others. Ask your neighbors and friends and look in the newspapers. Good subcontractors are out there! Also try the contractor referral service at www.remodelormove.com/servicemagic/servicemagic.cfm.
The benefits of being the project manager yourself include the pride of knowing you had a hand in the creation, the empowerment that comes with knowing that you made the decisions along the way that produced fine results, and the money you save. As described above, without a general contractor a project can be 20 to 50 percent less expensive. The savings can allow you to make more improvements or keep more of your money in the bank.
A third option is a compromise between the first two options. Most homeowners choose to use a full-service general contractor, others act as their own general contractor, and a few choose a fee-based project manager.
Fee-based project managers will do all the project coordination and subcontractor hiring tasks for a rate of $ 50 to $ 100 per hour. They do not mark up the subcontractor charges and you will usually pay them directly. This can be a very attractive option because it may save you money and take away a lot of the burden of managing the project. Unfortunately, these fee-based individuals are not nearly as common as general contractors and it may be hard to find one in your area that meets your requirements.
Do you have remodeling or moving questions? I will be glad to help if I can. Feel free to email your questions to me at dan@remodelormove.com.
Thanks,
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