Am I Charging Enough Or Not

azee

I am a general contractor building 3-5 homes in the $300,000.00 range. Most the homes I do are 2 stories that are 2200-2700 sq ft. Here is an example- If I built a 2400 sq. ft. home and my cost was $260,000.00 including land- I would sell it for $310,000.00. I basically charge $40,000.00-$50,000.00 per home in that range. Obviously if it was a less expensive home, I would not be able to charge the same. I base it off of market value of comparible homes in my area. I use more of a lump sum system than marking up each item. I am a one person show, with no emloyees or office space rent- so my overhead is minimal. Does this sound like a good way to be operating or am I heading for trouble. I am fairly new- been doing this for 3 years. Does any one else charge a lump sum? Any advice is appreciated. I know I am not the cheapest contractor in the area but definetly not the most expensive.

boman47k

You build these all by your lonesome?

azee

I sub out most all of the work. Act more as the project manager.

genecarp

not sure what you are asking, the market sets the home price, not us, that is if you want to sell it. i build a home, then meet with my broker, comp the neighborhood, set the price accordingly. ps i know going in what the neighborhood will support, then build a home that fits into the area

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Roof Cleaning

If people will pay it, then you are not charging too much

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ODDBALLS

Why r u asking? Do you think that you are not making/charging enough? Are you able to move these houses? If you are happy with what you are doing/making then keep on rocking.

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I want to make a million dollars, and I want to only work one day a week.

Mike Finley

Well, with the average hourly wage being $16.25 an hour in the USA, if you are doing 3-5 of these a year and making $50K a pop, that's somewhere between $150,000-$250,000 a year you are making. You're in the top 5% of income in this country at those numbers.

john elliott

Does anyone else charge a lump sum? Yes. All of the large sucessful companies in all the businesses that sell direct to the end users charge a lump sum that is based on what the market will bear.

For instance, car makers. When Lexus set a price for a car they don't markup the tyres, the seats, the carpets etc etc etc. they look at the market and set their price according to where they are in that market.

You are doing the same, and it sounds to me like you are doing very well too. Just make sure you are putting aside enough money so that you can survive when the downturn in the market catches up with you (note I said 'when', not 'if')

John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

d-rez

Just to clarify what John is saying, as one of the line items in OH, you should have a OCRA(operating capital reserve account).