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Markup on Cost Plus Contract
Posted on 9/3/18 at 9:50 pm
Posted on 9/3/18 at 9:50 pm
About to do large renovation, and the contractor wants 20% markup. Is that high for a residential cost-plus?
9
Posted on 9/3/18 at 9:51 pm to JudgeHolden
That’s low, IMO. All of my quotes in BR were for 22-25%
Posted on 9/3/18 at 9:51 pm to JudgeHolden
Yes. Plus what keeps him or the subs from controlling the cost.
Posted on 9/3/18 at 9:52 pm to JudgeHolden
20% is below average. Typically is 25% or higher
Posted on 9/3/18 at 9:52 pm to JudgeHolden
I'd need more information, but that's about average if not on the lower end.
Posted on 9/3/18 at 9:54 pm to JudgeHolden
26.5%- that is 15% overhead and 10% profit.
Posted on 9/3/18 at 9:54 pm to JudgeHolden
You get what you pay for.
Make sure you have some references or reviews from this contractor.
The last thing you want is a shoddy job that you don't notice weeks, months after the work is complete.
Make sure you have some references or reviews from this contractor.
The last thing you want is a shoddy job that you don't notice weeks, months after the work is complete.
Posted on 9/3/18 at 9:58 pm to JudgeHolden
Cost plus, huh? So the more he spends, the more he makes. What could go wrong in the very ethical and unshady world of residential construction.
Posted on 9/3/18 at 10:01 pm to poochie
quote:
Cost plus, huh? So the more he spends, the more he makes. What could go wrong in the very ethical and unshady world of residential construction.
That’s pretty much how all remodels work when it’s a whole home (or major addition) reno. Keeps everyone honest.
Most will work with you, though. So say you wanted to buy materials and fixtures and agreed to bring them to the site/etc. The contractor wouldn’t charge 25% on those items. Just the labor.
This post was edited on 9/3/18 at 10:04 pm
Posted on 9/3/18 at 10:04 pm to JudgeHolden
Is it cost plus on labor? Are you buying appliances? Do you have allowances for appliances and fixtures?
The rate seems reasonable if you have some defined criteria. If you have no defined criteria then it could get out of hand, possibly.
will the renovation displace you? If it’s a huge renovation ($$) then know you are choosing a partner basically for the job. Your either choosing a company or person you trust, if that’s what’s gotten you to this point (trust) then let them make their money and make sure you are satisfied with communication and product. Everyone wins.
The rate seems reasonable if you have some defined criteria. If you have no defined criteria then it could get out of hand, possibly.
will the renovation displace you? If it’s a huge renovation ($$) then know you are choosing a partner basically for the job. Your either choosing a company or person you trust, if that’s what’s gotten you to this point (trust) then let them make their money and make sure you are satisfied with communication and product. Everyone wins.
Posted on 9/3/18 at 10:09 pm to JudgeHolden
Are they a GC? If they subcontract out the work, that’s extremely high but if they do the work, that’s extremely low
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