ᐅ Hiring trades separately or using a general contractor / turnkey solution?
Created on: 1 Feb 2022 09:07
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Elias_dee
Hello everyone,
What would you recommend for our situation? We are currently renting and have purchased a plot of land about 50 minutes away in another town, where we want to build a single-family house. Our architect lives just a few minutes from us (so also in our current town, not the new one).
I have already contacted about 10 companies from the area near the future construction site. Only two of them could build as general contractors on a turnkey basis, and they only have availability at the end of the year. I would actually prefer this because a) we don’t have much experience with building projects, b) the architect cannot supervise construction, and c) we cannot be on site every week. However, first of all, there aren’t many companies currently able to build this way for us, and secondly, I recently read an article stating that turnkey construction often leads to more defects because there is little control over the subcontractors used.
What would you do in our case? Go with turnkey construction or invest some time to learn about the process and handle everything by requesting and awarding contracts separately?
Thank you very much!
Best regards
What would you recommend for our situation? We are currently renting and have purchased a plot of land about 50 minutes away in another town, where we want to build a single-family house. Our architect lives just a few minutes from us (so also in our current town, not the new one).
I have already contacted about 10 companies from the area near the future construction site. Only two of them could build as general contractors on a turnkey basis, and they only have availability at the end of the year. I would actually prefer this because a) we don’t have much experience with building projects, b) the architect cannot supervise construction, and c) we cannot be on site every week. However, first of all, there aren’t many companies currently able to build this way for us, and secondly, I recently read an article stating that turnkey construction often leads to more defects because there is little control over the subcontractors used.
What would you do in our case? Go with turnkey construction or invest some time to learn about the process and handle everything by requesting and awarding contracts separately?
Thank you very much!
Best regards
Deadree schrieb:
The construction company only worked with local tradesmen, some of whom we even knew personally.It was the same for us, and that worked out well. This way, you can also follow up with them later about certain issues. Especially the plumbing/heating and electrical areas sometimes require additional questions.
Holzhäuschen1 Feb 2022 10:56We are managing the construction with separate contracts and are also acting as our own site managers after the structural shell is completed. We have a building surveyor supporting us; without their help, we wouldn't be able to do this.
We were lucky with our land seller, as he and the financial advisor are familiar with the local trades and could recommend some to us. These are almost the only ones who got back to us at all. The situation is very tight, and the trades can choose who they want to work with. Some found our house simply too small to make the trip worthwhile.
I think we are not the right people for turnkey building because we are control freaks and like to know what is going on. Thanks to working from home and careful vacation planning, we can be present on the construction site (the house is scheduled to arrive on February 28). However, we have to coordinate the entire process ourselves (with the help of the surveyor); just getting up to speed took forever. We also have to do a significant amount of the work ourselves and establish contact with all the trades in the beginning, making all decisions at least somewhat informed and reasonable.
It is an incredible amount of work, and I don’t know if we would have dared to take it on if we had known what was coming. Now we are deep into it, and it’s enjoyable in a way, but it consumes a huge amount of time and energy (and construction hasn’t even started yet!).
With a lot of discipline, a huge amount of time, no fear of making phone calls (emails are pointless at the start), support from a surveyor, and also knowledgeable people from the area who can recommend trades, it is possible. But it demands a lot from you, and it’s also a question of whether you can and want to take this on.
We were lucky with our land seller, as he and the financial advisor are familiar with the local trades and could recommend some to us. These are almost the only ones who got back to us at all. The situation is very tight, and the trades can choose who they want to work with. Some found our house simply too small to make the trip worthwhile.
I think we are not the right people for turnkey building because we are control freaks and like to know what is going on. Thanks to working from home and careful vacation planning, we can be present on the construction site (the house is scheduled to arrive on February 28). However, we have to coordinate the entire process ourselves (with the help of the surveyor); just getting up to speed took forever. We also have to do a significant amount of the work ourselves and establish contact with all the trades in the beginning, making all decisions at least somewhat informed and reasonable.
It is an incredible amount of work, and I don’t know if we would have dared to take it on if we had known what was coming. Now we are deep into it, and it’s enjoyable in a way, but it consumes a huge amount of time and energy (and construction hasn’t even started yet!).
With a lot of discipline, a huge amount of time, no fear of making phone calls (emails are pointless at the start), support from a surveyor, and also knowledgeable people from the area who can recommend trades, it is possible. But it demands a lot from you, and it’s also a question of whether you can and want to take this on.
Elias_dee schrieb:
Also, just yesterday I read an article in Spiegel that said turnkey construction usually involves significantly more defects because you have no control over the subcontractors used.
You can’t generalize like that; it really depends on who you choose for the turnkey build. Many general contractors (GCs) handle at least some trades with their own teams. Even those who mainly work with subcontractors have varying levels of quality. Our GC delivered excellent results here. The trades handled by subcontractors are usually assigned to the same subcontractors as part of ongoing partnerships, and those relationships are based on shared quality standards. So you really can’t make a blanket statement. Do your research beforehand, look for reviews of potential companies, and consider how long each company has been operating.Are you sure only two companies are options for you? Usually, a bit of online searching will reveal many more. None of them seem to have abundant free time right now. If a company is so booked that they can only start in a year, that might also reflect their value and pricing.
We are currently shifting away from using an architect towards a local general contractor who has been working exclusively with local craftsmen for years. This offers us significantly less potential for confusion and coordination issues. Additionally, we have an expert from nearby supervising the project.
With architects, it is important to me that they are located very close to the construction site. They need to be on site as often as possible, and with a one-way trip of 50 minutes, travel costs will become noticeably significant here.
With architects, it is important to me that they are located very close to the construction site. They need to be on site as often as possible, and with a one-way trip of 50 minutes, travel costs will become noticeably significant here.
askforafriend1 Feb 2022 11:47We are in a very similar situation as you: living an hour away from the construction site. We didn’t make the decision lightly back then, and you really only know if it was the right one afterward 🙂
Reasons why we decided to work with an established architect/planning firm at the project location:
- The planning office is well connected, has been building in the region for decades, and knows many craftsmen/companies.
- The planning phase took a long time; we repeatedly revised the floor plan and developed it together with the planning office.
- Independent cost estimate: I always wanted a complete breakdown of the project BEFORE starting construction. If the planning office does a good job and has experience, you simply know what you’re getting into.
- In the beginning, we contacted all the good general contractors (GCs) in our area: I simply didn’t like their approach. I want to be free to make all decisions myself. I don’t want to have to use electrician XY just because the GC works with them. I also don’t want to be limited to certain “programs” or brands of craftsmen. Besides, no layperson really understands the scope of work descriptions; you need an expert to help with that anyway.
- I had a bad feeling about all the money going to a single company that then manages everything. That’s not diversification. If I contract trades separately, the risk for me is lower because the scope and volume per company is smaller. Maybe that’s just because I’ve read horror stories where the GC went bankrupt and all the money was gone—craftsmen then don’t get paid either. Not a nice situation.
- We have a professional on our side whom we can always ask questions—no matter what a craftsman says (focused on their own trade, many different opinions on what “good workmanship” means). We’ve noticed this often with craftsmen from various trades now (“We always do it this way”). When you ask an independent construction engineer, they really explain why something maybe shouldn’t be done or what risks it involves.
- It was important for us to have someone on site to inspect the work and accept the trades. So we assigned all service phases to the planning office. Especially construction management and supervision were extremely important for us, not least because we don’t live locally. Honestly, I wouldn’t personally know, for example, whether the foundation slab or something else was correctly executed to formally accept the work.
- Negotiations: Yes, even in today’s climate, our architect was able to negotiate and secure some benefits for us, thanks also to good contacts. This allowed us to stay within budget despite COVID-19 and supply chain issues. You are simply much more flexible during planning and execution and can react in time.
I think nothing can be generalized—things can always go wrong. What matters is that you feel comfortable with your decision from the start, and that really depends a lot on what you feel capable of managing yourself. For example, my friend doesn’t have a planning office or site manager involved—he contracts the trades alone and manages everything himself. He saves the money for a specialist that way. I couldn’t sleep peacefully like that; I need to spend the money on that expertise.
Reasons why we decided to work with an established architect/planning firm at the project location:
- The planning office is well connected, has been building in the region for decades, and knows many craftsmen/companies.
- The planning phase took a long time; we repeatedly revised the floor plan and developed it together with the planning office.
- Independent cost estimate: I always wanted a complete breakdown of the project BEFORE starting construction. If the planning office does a good job and has experience, you simply know what you’re getting into.
- In the beginning, we contacted all the good general contractors (GCs) in our area: I simply didn’t like their approach. I want to be free to make all decisions myself. I don’t want to have to use electrician XY just because the GC works with them. I also don’t want to be limited to certain “programs” or brands of craftsmen. Besides, no layperson really understands the scope of work descriptions; you need an expert to help with that anyway.
- I had a bad feeling about all the money going to a single company that then manages everything. That’s not diversification. If I contract trades separately, the risk for me is lower because the scope and volume per company is smaller. Maybe that’s just because I’ve read horror stories where the GC went bankrupt and all the money was gone—craftsmen then don’t get paid either. Not a nice situation.
- We have a professional on our side whom we can always ask questions—no matter what a craftsman says (focused on their own trade, many different opinions on what “good workmanship” means). We’ve noticed this often with craftsmen from various trades now (“We always do it this way”). When you ask an independent construction engineer, they really explain why something maybe shouldn’t be done or what risks it involves.
- It was important for us to have someone on site to inspect the work and accept the trades. So we assigned all service phases to the planning office. Especially construction management and supervision were extremely important for us, not least because we don’t live locally. Honestly, I wouldn’t personally know, for example, whether the foundation slab or something else was correctly executed to formally accept the work.
- Negotiations: Yes, even in today’s climate, our architect was able to negotiate and secure some benefits for us, thanks also to good contacts. This allowed us to stay within budget despite COVID-19 and supply chain issues. You are simply much more flexible during planning and execution and can react in time.
I think nothing can be generalized—things can always go wrong. What matters is that you feel comfortable with your decision from the start, and that really depends a lot on what you feel capable of managing yourself. For example, my friend doesn’t have a planning office or site manager involved—he contracts the trades alone and manages everything himself. He saves the money for a specialist that way. I couldn’t sleep peacefully like that; I need to spend the money on that expertise.
F
Fleckenzwerg1 Feb 2022 13:14Advantage of managing the project yourself: You have complete freedom 🙂
Disadvantage of managing the project yourself: You have complete freedom 🤨
If the general contractor (GC) and the construction site are not located in a large city, the GC usually has an interest in a successful project because they also have a reputation to protect. Local subcontractors sound good. Potentially better terms offered by the GC with the tradespeople should not be underestimated, as the GC likely won’t be easily taken advantage of by them. Some subcontractors also depend on the GC financially.
Yes, the GC also takes a significant cut for coordination and for quantity adjustments (which you might get slightly cheaper if contracted directly with the tradespeople). In return, you have less stress.
What happens if one of the companies you hired suddenly fails (due to illness or insolvency), and other trades depend on their work? This quickly disrupts the schedule, and no one covers the resulting damages (rent, financing interest during delay, etc.). A GC usually provides you with a binding completion date or construction period starting from the actual construction start. If something goes wrong on their end, they still have to ensure the schedule is met.
On the downside, you may not be able to specify some details as thoroughly with a GC. In our case, KfW55 energy standard is planned and should work out, but it is not explicitly stated in the contract. If the execution later doesn’t meet KfW55 requirements, you have no leverage. Or take the heat pump. Our GC usually buys a standard model without inverter technology and with a buffer tank. But I want inverter technology for better use of photovoltaic electricity and no buffer tank because it reduces efficiency. This has been more or less agreed upon verbally with the GC, and I hope they will remember and stick to it. However, I would sleep better if it were written in the contract. It’s also unclear whether the GC will charge an extra fee for this special request since their fixed price technically only covers “heat pump,” which could be the cheapest model available.
Hire an independent expert as well, even if the GC doesn’t like it.
Disadvantage of managing the project yourself: You have complete freedom 🤨
If the general contractor (GC) and the construction site are not located in a large city, the GC usually has an interest in a successful project because they also have a reputation to protect. Local subcontractors sound good. Potentially better terms offered by the GC with the tradespeople should not be underestimated, as the GC likely won’t be easily taken advantage of by them. Some subcontractors also depend on the GC financially.
Yes, the GC also takes a significant cut for coordination and for quantity adjustments (which you might get slightly cheaper if contracted directly with the tradespeople). In return, you have less stress.
What happens if one of the companies you hired suddenly fails (due to illness or insolvency), and other trades depend on their work? This quickly disrupts the schedule, and no one covers the resulting damages (rent, financing interest during delay, etc.). A GC usually provides you with a binding completion date or construction period starting from the actual construction start. If something goes wrong on their end, they still have to ensure the schedule is met.
On the downside, you may not be able to specify some details as thoroughly with a GC. In our case, KfW55 energy standard is planned and should work out, but it is not explicitly stated in the contract. If the execution later doesn’t meet KfW55 requirements, you have no leverage. Or take the heat pump. Our GC usually buys a standard model without inverter technology and with a buffer tank. But I want inverter technology for better use of photovoltaic electricity and no buffer tank because it reduces efficiency. This has been more or less agreed upon verbally with the GC, and I hope they will remember and stick to it. However, I would sleep better if it were written in the contract. It’s also unclear whether the GC will charge an extra fee for this special request since their fixed price technically only covers “heat pump,” which could be the cheapest model available.
Hire an independent expert as well, even if the GC doesn’t like it.
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