General contractors: how much do they cost?
In case you don’t know, general contractors are the type of contractors that will handle any type of projects from the beginning to the end. They oversee the projects and bring together all the workers needed for the different stages of a certain project. In order to do so, they hire a series of sub-contractors. A general contractor generally has different contracts and agreements with many sub-contractors, although some general contractors may have their own crew of workers, paying them at an hourly rate. The contractors that have their own crew usually hire people that are specialized in many trades in order to efficiently cover all the stages of any kind of project.
In case you are wondering what is a general contractor cost, you should know that there are three types of contracts in this business: fixed price contracts, time and materials contracts and costs + fees contracts. Each type of contract is different and has its advantages and disadvantages for the client, according to the type and size of the project you have in mind.
The first type of contract we are going to talk about is the fixed price contract. As its name states, this contract starts with a bid from the contractor, accepted by the client. The sum of money agreed upon is supposed to remain the same until the end of the project. In the case of smaller projects, this formula in efficient, but for larger, more complex projects, it is highly unlikely to maintain this fixed price, because a lot of changes can occur.
The second type of contract, the time and material contract, is a document that contains the hourly charges for the workers, the fees for the materials used and the mark-up of various sub-contractors that may be needed for the different stages of the project. So, if your plans change and you add work to the project, the time increases and the costs will grow. This type of contract has its disadvantages, especially for the client. If you don’t employ a trustworthy, reliable and honest contractor, you may lose some money, because any extra time spent on the job is paid from your pocket.
The third type of contract, cost + fee contract, works the other way around. This contract has the costs of the materials and a fixed fee for the general contractor, which means that the renovation company is interested in finishing the job as efficiently and quickly as possible.