How much do I pay my contractor?

Question

When building a house, how much does the contractor make? What percentage, should a contractor expect to make?

Answer 1

you can get a good idea of the bare costs of items and the contractor's "overhead" if you can find a copy of "MEANS" They publish a manual that has these figures. Most jobs are listed there and you would see that a contractor is making 10% to 15% [maybe higher for some sub- trades] off the overall cost. of course he is paying himself his wages, his company's "overhead" costs [ie office expenses, operations costs, taxes, bookkeeping, advertising, permits,etc]

in most cases, you are getting your money's worth. he has the headaches of estimating material and labor, finding good workers and getting them to work, dealing with the government on permits, and dealing with the "utilities" to get the proper services in place. in a word you are paying for his "knowhow"...

Answer 2

The range will vary greatly. Your question though brings up a couple questions of my own.

1 Are you planning to become a contractor at some point. That would be really the only reason for a questions like this.
2 Are you planning on having a home built for yourself.

Contractors have lots of headaches to deal with from labor requirements to accurate estimates on labor and materials and over seeing the entire project. Sometimes a contractor will give one estimate and if hes slightly over budget he may have to eat that amount depending on the contract.

Typically by the end of the project the contractor has only made a 10-15% profit, which is much when you really take a look at the big picture.


If the answer is number 2 then what you need to do is get several itemized cost estimates. Lets say you are building a 2k sq ft home in Vegas. Materials are 100k. Labor another 50k Various other fees for building a new home etc 100k. (these figures are slightly off since i dont have my contract in from of me) Basically the house depending on contractor will vary is price estimate from 300-400k. Now thats just an estimate it may be more or it could be less. It also depends on plan changes during construction. Maybe you want to upgrade to marble instead of vinyl counter tops. The cost goes up from 15k to 80k because the extra time and care thats required to put marble in.

In short unless the contractor is a crook expect that he will only walk away with a 10-20% profit from the job.

Answer 3

There is no set range. It varies greatly on where the house is being built, and what price range the house is selling for. The best way to not overpay is to get several itemized estimates for the job from contractors whose reputations you've verified. That way if you decide to DIY or sub out some portion of the work, you can negotiate the price down. Always check references, the last thing you want is to get the price you want and then have them do a lousy job.

Answer 4

That's not the important thing. Long as you 2 have a set price on what your contractor can get it done for with dignity and excellent craftsman's ship . Do you like people wanting to know what you make and let them judge if its a fair percentage?? I know I wouldn't...Coming from a contractor.

Answer 5

Somewhere between 20 and 40 % depending on how large or small the contractor is.