Being your own contractor carries some risks

January 8, 2014 

Dear Angie: Can I save money by finishing my basement piecemeal rather than hiring a general contractor? — Jennifer M., Alpharetta, Ga.

Dear Jennifer: It depends. There are risks and rewards if you act as your own general contractor on a large project.

Our researchers found that general contractors — who hire and supervise subcontractors such as plumbers, electricians and carpenters — typically mark up labor and material costs by as much as 20 percent. A 20 percent markup on a $15,000 remodel, for example, would be $3,000. That’s money you could pocket if you supervise all aspects of the project.

But weigh your options carefully before deciding what’s best for your situation. Unless you have experience in the building trades or house construction, as well as a flexible schedule with significant free time, you’re probably not ready to act as your own general contractor. Orchestrating a full remodeling of your basement can be a monumental task for an inexperienced homeowner.

You could end up paying more if the job is done incorrectly by the subcontractors you hire or if scheduling conflicts arise. Highly rated general contractors tell our team that they sometimes are brought in to fix problems created by workers homeowners hired on the cheap.

A general contractor is responsible for fixing problems with the job. If things go wrong on your watch, you’ll be paying.

Also, keep in mind that an experienced and qualified general contractor will handle getting all necessary permits, and making sure subcontractors are appropriately insured and licensed. A good general contractor also will ensure that work meets local building codes, comes in on budget and maintains high quality standards.

But if you have the experience and the time to be your own general contractor, you may save money as well as stay on top of all details.

Angie Hicks is the founder of Angie’s List, a resource for local consumer reviews on everything from home repair to health care.

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