Will Becoming My Own General Contractor Save Me Money?
Please do not become your own general contractor as a cost saving measure.
If you don’t have the money in your budget for the general contractor’s bid and think you can save money by eliminating the profit and overhead, I would counsel you to keep saving, reduce the scope of the project, or speak to the general contractor about ways to modify the price.
Hiring Subcontractors
I assure you that you will not save money by running a remodel yourself and by hiring all the subcontractors on your own.
Subs typically have a price they charge homeowners and a price they charge contractors. Subs and generals work together on a daily basis and will most likely have an ongoing business relationship. In fact, general contractors may be their primary income stream whereas homeowners may be their client once in a while. This typically leads to premium pricing for homeowners (but not always). I have found that most subs will be available to their general contractors before homeowners (provided that is their business model). With this in mind, if are managing your own project you may not receive the same priority in terms of scheduling, so your job is likely to take longer than if you were using a general contractor.
Liability
Liability is a serious concern for general contractors and if you decide you want to run the job yourself, make sure your homeowners insurance policy covers construction work. Most workplace injuries happen on construction sites; even the most careful subcontractors experience injuries and accidents. If you have not requested a certificate of insurance with you named as additional insured, make sure you have excellent coverage. Definitely speak to your agent about adding Workers Comp to the policy.
If you are using unlicensed subs in order to save money, remember that you have no recourse with the state building authority if you need to file a complaint.
Quality
Do you have the skill level to know when the work you are supervising is acceptable? If you cannot ascertain the quality, and there are defects in the work, it is likely you will need to hire a contractor to carry out repairs down the road, which will eat up all the money that you believe you have saved by running your own project.
As the homeowner general contractor, you may not have an eye for the types of mistakes that a licensed general contractor would have seen and been able to remedy during the course of construction.
Energy Leaks
Several of the homeowners I know who opted to be their own general contractor or project manager actually wish they had thought twice about it. They said that it was much more work than they had anticipated. They end up exhausted with strained relationships, and they spent a lot more money than they had expected. If they did feel like they saved money, the savings turned out not to be worth the time away from their families, or the stress and obsession with the project.
Still Feel Called to be your own General Contractor?
Do not be discouraged, some homeowners I spoke to said they would manage their own project again in a heartbeat. I even know one woman who became a developer and general contractor because she loved the process so much and was really good at it. Another woman I Know became an in-demand owner's representative and professional construction project manager after running her own remodels. So, if you feel called and feel good about the questions above, go for it.
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