So I have this opportunity to help a friend's parents remodel their home in Los Angeles. It's medium sized remodel of an exisiting home. It will have a new kitchen and new baths, including master bath. The clients are wonderful people and they have a realistic budget for everything (albeit a bit on the low side). My quesition is how much should I propose as my fee?
I have seven years eperience in high end residential and I have taken three A.R.E. exams (with the intention of taking a bunch more now that A.R.E. 4.0 is around the corner). I would be working on the side and have commited to not having much of a life during the time i would be doing this project. This type of project is perfect for me, but I am concerned about potential indesiciveness from the clients in terms of the design. So I am thinking about time and expense for the schematics and design development, and maybe a fixed fee for the construction document phase. But my question is what my hourly rate should be? I don't want to overcharge them, but I want something respectable enough that they don't waste too much time or spin my wheels.
I was initally thinking of $75 an hour. Is this too high or too low????
I would estimate how long it will take you and decide if 75/hr will add up to a reasonable percentage of the construction cost for them (10-15% is a good range, probably more towards 10% if there's no new building and you aren't licensed).
Then see if you can pull it off for that hourly rate (you could always bill them for less hours than you work if it takes way longer).
Or you could give them a lower hourly rate and tell them you'll keep them informed if they exceed a certain # of hours if you're worried about indecisiveness... just for comparison as 2 person shop w/a license, we charge 75/hr and estimate 8-15% of construction cost, depending on the type of project (we do design build and some of the jobs require very few drawings).
Most small offices we know charge $100/hr but sometimes they don't bill all the hours worked.
Hourly rates on this type of job seem to work better than % of construction cost, because the final cost is always higher than the estimate and they usually don't want to pay out at the end (although it really depends on your relationship). I would never work for a fixed fee, way too much hand-holding involved on residential jobs.
If this is off-hours and you dont have your own office $75 seems a little high to me. I think RA's suggestion is a good one, but i would shoot for a lower hourly rate-- in the $60/65 range and let them know when its reaching a certain benchmark. You can charge hourly and still say SD is estimated to cost X amount and expected to have 4 meetings or something like that.
I find the more open you are about the process and the more it is on paper the easier things will be.
Actually I was also thinking about $50 an hour but thought it was a bit too low as well. I guess $60-65 sounds reasonable enough. Now the hard part for me is trying to estimate how long everything will take for the estimate.
I am definetly interested in having everything clear as can be in paper and to also do a fair amount of hand holding through the process (which is okay, these are the nicest people after all).
Thanks for the good advice guys!
May 15, 07 5:41 pm ·
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What to charge for a medium residential remodel in L.A.?
So I have this opportunity to help a friend's parents remodel their home in Los Angeles. It's medium sized remodel of an exisiting home. It will have a new kitchen and new baths, including master bath. The clients are wonderful people and they have a realistic budget for everything (albeit a bit on the low side). My quesition is how much should I propose as my fee?
I have seven years eperience in high end residential and I have taken three A.R.E. exams (with the intention of taking a bunch more now that A.R.E. 4.0 is around the corner). I would be working on the side and have commited to not having much of a life during the time i would be doing this project. This type of project is perfect for me, but I am concerned about potential indesiciveness from the clients in terms of the design. So I am thinking about time and expense for the schematics and design development, and maybe a fixed fee for the construction document phase. But my question is what my hourly rate should be? I don't want to overcharge them, but I want something respectable enough that they don't waste too much time or spin my wheels.
I was initally thinking of $75 an hour. Is this too high or too low????
I would estimate how long it will take you and decide if 75/hr will add up to a reasonable percentage of the construction cost for them (10-15% is a good range, probably more towards 10% if there's no new building and you aren't licensed).
Then see if you can pull it off for that hourly rate (you could always bill them for less hours than you work if it takes way longer).
Or you could give them a lower hourly rate and tell them you'll keep them informed if they exceed a certain # of hours if you're worried about indecisiveness... just for comparison as 2 person shop w/a license, we charge 75/hr and estimate 8-15% of construction cost, depending on the type of project (we do design build and some of the jobs require very few drawings).
Most small offices we know charge $100/hr but sometimes they don't bill all the hours worked.
Hourly rates on this type of job seem to work better than % of construction cost, because the final cost is always higher than the estimate and they usually don't want to pay out at the end (although it really depends on your relationship). I would never work for a fixed fee, way too much hand-holding involved on residential jobs.
If this is off-hours and you dont have your own office $75 seems a little high to me. I think RA's suggestion is a good one, but i would shoot for a lower hourly rate-- in the $60/65 range and let them know when its reaching a certain benchmark. You can charge hourly and still say SD is estimated to cost X amount and expected to have 4 meetings or something like that.
I find the more open you are about the process and the more it is on paper the easier things will be.
Actually I was also thinking about $50 an hour but thought it was a bit too low as well. I guess $60-65 sounds reasonable enough. Now the hard part for me is trying to estimate how long everything will take for the estimate.
I am definetly interested in having everything clear as can be in paper and to also do a fair amount of hand holding through the process (which is okay, these are the nicest people after all).
Thanks for the good advice guys!
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