Your home may be the most significant investment you’ll ever make. During the course of owning it, home improvements will comprise a sizeable portion of your household budget. Over time rooms will need fresh paint or you may need more living space for a growing family. Whether it’s a small fix or a major renovation, there’s a key decision to be made with a big impact on your budget: Do it yourself, be your own general contractor or hire a general contractor to handle the project for you?
Improving your home with your own hands sounds like frugality at its best—and it can be when your skills match modest jobs on slim budgets. Do it yourself and the savings could be significant. Enough brand-name paint and supplies to refresh a typical 12x12’ room will cost $150. Hiring a licensed contractor to paint the same room would run you an additional $200 to $400. Paint more rooms and your savings multiply.
But be mindful that even simple projects can pack surprises. Painting may reveal uneven surfaces or expose small cracks in a wall that become deep gouges. Your fourth trip to the hardware store for additional tools can fritter away expected savings. At the start of each project you should always build in some room in your budget for the unexpected.
Besides confidence and determination, do-it-yourself jobs require tools, time, patience and expertise. If you’ve got them all, you can do your budget a big favor.
Being handy might help you stop door hinges from squeaking or toilets from running, but it seldom equals the skill or experience of a trained carpenter, painter, plumber or electrician. When the job calls for a higher level of expertise it may be time to hire a technician. Be prepared to pay a professional $50 to $100 an hour for their services. The do-it-yourself option, at first glance, looks great for your budget, but if a renovation goes awry you’ll have to hire a professional to correct it, which will cost you even more in time and money.
Go about hiring in a systematic fashion. A good place to start is by asking neighbors and friends for names of trade professionals who have made similar improvements. (You might even benefit from a referral discount.) Try to find subcontractors who often work together, to ease critical coordination. Local websites increasingly list trade professionals and reviews, but give added weight to sources you know and trust.
Get at least two estimates. Require the fee and completion date or a work schedule in writing. Ask whether old pipes, faulty wiring or any other unforeseen contingency might add cost and if so, how much. If negotiation changes the cost or the scope of work, get that update in writing, too. Insist that workers are properly insured and check your homeowners’ policy for coverage of injuries that occur on your premises.
While you may be tempted to hire unlicensed workers who will do the job on the cheap, be aware that local inspectors won’t sign off on such work. If any damage occurs, your insurance may not cover it, and when you sell your home, work that was not inspected might raise a red flag for a scrupulous buyer. If it does, you may have to reduce your selling price.
On big jobs that require coordinating several contractors as well as permits and suppliers, skilled general contractors or project managers usually earn their keep. Some charge a fixed amount, others charge a percentage based on labor and materials.
It’s easy for homeowners to underestimate the time and constant communication required to orchestrate a big job. On paper, acting as your own general contractor might appear to shave 15% to 20% from the average $28,094 tab to remodel a home office, $56,611 for a major kitchen remodeling or $81,315 to add a family room.** However, one snafu or oversight caused by your inexperience can cause costs and stress to balloon. General contractors can anticipate problems and exert leverage over subcontractors that homeowners cannot. They may also get discounts from suppliers that are only available to contractors, and pass the savings on to you.
Hiring a general contractor should not end your vigilance. To offset budget overruns, get agreements in writing up-front. Make sure your contractor is bonded and insured. If everything checks out, it’s customary to pay general contractors a third at the start, a third at midpoint, and a third when the work is complete and inspected.
When you’re ready to improve your home, before choosing whether to do it yourself, manage the improvement or hire someone to manage it for you, in addition to setting a budget you should weigh your skills, interests and availability objectively. The right decision is different for everyone, but the time you invest in making it could yield your highest return.