House renovation - project manager costs?

[B17NNS]

New one to me. I've developed a bit of property on my time, renovation, refurbishment, conversion etc.

A friend of a friend has asked me to manage his build. It is a pretty straight forward domestic refurb. From my initial conversation he wants someone to tie all the trades together at the right times, source materials and labour. Bring the project in on time and budget.

Very confident that I could do it (I've done it for myself many times) however I have absolutely no idea what to charge.

Over to you.

[groomi]

Typically you'd charge a percentage of the overall build costs. What you need to work out is whether you can manage it from the end of a phone with occasional site visits, or whether it'll be a really hands on job spending most days on-site. Will you be attempting to do this alongside your regualr job, in which case will you need to take any time out from that? etc.

[groomi]

The other point to consider is what your responsibilities are. If you don't bring the project in on time and on budget - what happens? If you're going to be held responsible then you'll need insurances etc which are probably hard to come by unless you're a professional PM.

[B17NNS]

I'm self employed. As and when a refurb project comes along that I fancy I take it on and do the majority of the work myself. In between that I work for others, plastering, plumbing, fitting kitchens and bathrooms etc.

I have public liability insurance but as you say, I would need to discuss the guys expectations re missing deadlines and or budgets.

It would work quite nicely as I could be on site doing some actual work (as my own contractor) as well as managing other trades.

[Spudler]

Ditto the above.
As its a straight forward refurb on a single house (I'm assuming) you may be better off agreeing an hourly rate. What you charge is down to what your happy with and whether it's on-site full time or part time will reflect on the rate.

[groomi]

B17NNS said:

It would work quite nicely as I could be on site doing some actual work (as my own contractor) as well as managing other trades.

I may be overcomplicating this a little as domestics are not my forte, but wouldn't that scenario effectively make you a principle contractor?

Definately get some form of written agreement about what is required of you and exactly what and who you are responsible for.

On the face of it, it sounds like a nice opportunity to be involved in a relaxed project with a friendly client, but it certainly has the potential to be a friend-loser (or worse) if it goes wrong.

Hopefully they'll be some more responses soon from people with directly applicable experience.

[B17NNS]

groomi said:

On the face of it, it sounds like a nice opportunity to be involved in a relaxed project with a friendly client, but it certainly has the potential to be a friend-loser (or worse) if it goes wrong.

My thoughts entirely. I don't know the guy personally but either way would be looking to conduct it in a professional manner with expectations and responsibilities outlined very clearly from the start.

So I guess it would be my usual rate for any actual work I do plus an additional fee for PM responsibilites - maybe an hourly rate for admin duties.

I'd hope from the clients point of view my fee would be value for money in terms of trade discounts that I can get for him along with a good contact base.

[Beardy10]

Charging an hourly rate is obviously probably the simplest way but you may want to look at a percentage of total costs (which is how an architect charges) and maybe even some kind of bonus for bringing the project in on time at budget etc. I would have thought a figure in low single figure % would be reasonable ? If things do start to do wrong you don't really want to be getting in argument about time spent especially as you will likely be on site anyway.

[TDIPLC]

In my experience a PM will cost approximately 5% of the project cost.

A good PM will save you a fortune and deliver a good product in a reasonable time frame. A bad PM will cost you a fortune.

If you find a good PM, ensure that you treat him well and pay him well

Good luck with it

[singlecoil]

I know that charging a percentage is absolutely standard practice, and I think customers who agree to that must be absolutely insane. WTF would they do that, where is the incentive for the architect and/or PM to keep the costs down? That's righ,t there is no incentive, the incentive is to keep prices as high as possible.

I'd offer the client an hourly rate, personally, with no agreements made to keeping to any particular timescale, as either the customer will fk it up changing their mind, or one of the contractors will, or maybe the building inspector or some other regulatory body.

[B17NNS]

Cheers chaps!

[groomi]

singlecoil said:

I know that charging a percentage is absolutely standard practice, and I think customers who agree to that must be absolutely insane. WTF would they do that, where is the incentive for the architect and/or PM to keep the costs down? That's righ,t there is no incentive, the incentive is to keep prices as high as possible.

I'd offer the client an hourly rate, personally, with no agreements made to keeping to any particular timescale, as either the customer will fk it up changing their mind, or one of the contractors will, or maybe the building inspector or some other regulatory body.

The benefit is that the client knows what their build budget is and can therefore predict what the PM costs will be. If you simply go on an hourly rate then how can you possibly estimate (or control) the number of hours required?

The most likely reason for increased costs will be delays which will most likely be caused by last minute design changes. The PM isn't responsible for these delays (unless he's been the PM all the way through the design phase too).

[AyBee]

Could you get him (or you?) to get a quote from another PM and work out something based on that?

[Grandad Gaz]

Don't forget the dreaded Health and Safety.

Could you be responsible if there was an accident on site?

[singlecoil]

groomi said:

singlecoil said:

I know that charging a percentage is absolutely standard practice, and I think customers who agree to that must be absolutely insane. WTF would they do that, where is the incentive for the architect and/or PM to keep the costs down? That's righ,t there is no incentive, the incentive is to keep prices as high as possible.

I'd offer the client an hourly rate, personally, with no agreements made to keeping to any particular timescale, as either the customer will fk it up changing their mind, or one of the contractors will, or maybe the building inspector or some other regulatory body.

The benefit is that the client knows what their build budget is and can therefore predict what the PM costs will be.

How does paying by percentage of costs tell the client what the build budget is? For that to be true, the other costs would have to be already known. It would also need to be certain that nothing that hadn't already been allowed for was going to crop up during the course of the build.

But if something did crop up, and had more than one solution, paying by percentage would mean that the PM would have an incentive to choose the more expensive one.

[groomi]

singlecoil said:

groomi said:

singlecoil said:

I know that charging a percentage is absolutely standard practice, and I think customers who agree to that must be absolutely insane. WTF would they do that, where is the incentive for the architect and/or PM to keep the costs down? That's righ,t there is no incentive, the incentive is to keep prices as high as possible.

I'd offer the client an hourly rate, personally, with no agreements made to keeping to any particular timescale, as either the customer will fk it up changing their mind, or one of the contractors will, or maybe the building inspector or some other regulatory body.

The benefit is that the client knows what their build budget is and can therefore predict what the PM costs will be.

How does paying by percentage of costs tell the client what the build budget is? For that to be true, the other costs would have to be already known. It would also need to be certain that nothing that hadn't already been allowed for was going to crop up during the course of the build.

But if something did crop up, and had more than one solution, paying by percentage would mean that the PM would have an incentive to choose the more expensive one.

Any organised project will have been costed and a budget allowed for - including a contingency to (hopefully) cover any unforseen costs. By charging a percentage of this cost, the client has a good idea what the PM is going to cost him.

If the PM plucks a a quanity of hours out of thin air it could (and most likely will be) wildly innaccurate. How can the client then ever ascertain if they have enough money to pay the PM or if the PM is liekly to save them any money - it'll all be guess work.

[monthefish]

B17NNS said:

A friend of a friend has asked me to manage his build. It is a pretty straight forward domestic refurb. From my initial conversation he wants someone to tie all the trades together at the right times, source materials and labour. Bring the project in on time and budget.

Very confident that I could do it (I've done it for myself many times) however I have absolutely no idea what to charge.

Over to you.

Think this is a poison chalice - if you get it right (on time, on budget) it'll just be "well that was why we employed you".

If it doesn't go right (for any of the vast and varied reasons why not - having done it yourself, I'm sure you are well versed with many of them) you'll be held accountable and made a scapegoat.

It it were me, I'd want to be paid handsomely for it to be worth my while, but this would probably be viewed as 'too much' from a clients point of view.

Keep us posted if you do decide to do it though.