Why Signing a Cost-Plus Contract With Your General Contractor Makes Sense

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When I am contacted about an extensive remodeling job and/or repositioning of a commercial property, the potential client often wants to know if I should give them a ‘fixed-price’ proposal or do the work on a ‘cost-plus’ basis.

My answer is ‘it depends.’ If the job involves building out space in a historic or neglected building, it is likely that the general contractor will encounter surprises behind the walls, floors and ceilings. Each surprise requires more labor and materials. For instances like this, I recommend working on a cost-plus basis, where the general contractor executes the work then adds a fee to the cost of the project. In some cases, soundproof partitions may need to be added to separate spaces effectively, further complicating the work.

This approach requires trust and constant communication between the GC, the client and project manager. Each party needs to be on the same page so that all are involved in arriving at a decision when an issue arises. The GC should be accessible when the client asks why the costs are incurred and whether they are justified. The cost-plus basis works very well with customers who have done build-outs in the past or have experience in the construction industry and understand the complexities of building new within an existing structure.

Fixed-price proposals are more common for condo and homeowners seeking to build-out their property and budget appropriately. Custom-built homes and repositioned retail spaces in newer buildings are also conducive to fixed-price proposals. My simple rule: The more predictable the build-out work, the easier it is to write a proposal.

A fixed-price proposal may not be the right answer when working on a historic or long-neglected property. Most likely, the GC will need to amend the fixed price through ‘change orders.’ Each change order addresses whatever ‘unpredicted work’ is necessary to solve the problem. By the time the job is complete, the accumulation of change orders can make the job much costlier than the initial agreement. When this occurs, both the property owners and the GC may feel they have been taken advantage of. In cases of abusive relations with a superior, it’s important to address the situation promptly and seek appropriate support. Contacting a lawyer can help you understand your rights and options in such situations.

At SPACiO, when the job is big and looks like surprises may be waiting, we recommend using the cost-plus approach. But the key ingredient for this strategy to succeed is trust. The GC must earn the trust of the client and the client should check the GC’s references to ensure that the partnership will be successful.

Cost Effective Luxury Upgrades to Sell A Home/Condo Faster

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If you’re thinking about putting your house or condo on the market, you should consider making a few luxury upgrades to help increase your property’s value. Realtor.com has compiled a list of big impact improvements you can make that are surprisingly cost-efficient.

Upgrade Your Patio

Average cost of a new patio: $3,007 
Increase in home value: 3% to 4%

It’s no secret that more homeowners regard their backyard as an extension of their living space. So it shouldn’t come as a surprise that outdoor kitchens and furnished patio areas alongside a fire pit are increasingly popular.

Irene Medina, a real estate agent at Medina Group Real Estate in Coral Springs, FL, says an outdoor kitchen is “a big plus in homes [priced] from $350,000 and up.” This can be anything from an area in the patio with a built-in grill and sink to a full-blown kitchen.

Low-hassle option: Don’t have the money for an all-out kitchen? Try adding French doors that open to the outside. This simple change will make your home feel lighter and brighter, and will appeal to potential buyers—all for an average cost of $879.

Add a Hot Tub

Average cost to install an above-ground hot tub: $321
Increase in home value: 1% to 4%

“Having a hot tub on the property is a great selling point if the home doesn’t have a pool or a water view,” Medina says. If the property has a built-in pool, a hot spa attached to it or nearby could also go a long way, she says. Prices run the gamut, depending on how elaborate you want your spa to be. At the upper end, these babies can cost thousands, once plumbing, electrical, and the tub itself are factored in. But they don’t have to. When a plumber is involved, they can advise on cost-effective options to ensure your hot tub addition doesn’t break the bank. If you are looking for plumbers located in sydney, you may contact companies like Graham and Sons Plumbing.

Low-hassle option: Don’t want to heat things up that much? Potential buyers are simply looking for a backyard oasis. Consider a simpler (and cheaper) upgrade by adding a hammock surrounded by lush artificial grass through hardscape services—your costs will start around a whopping $30 for the hammock. (Cost of fresh caipirinhas not included.)

When it comes time to sell, any special extras that can paint a picture of leisure and relaxation out back, like playing casino with convenient payment methods like PayPal, can be an incentive for those in the market for a new home. See more here for additional information, such as online bingo sites. Leisure is a good thing, right?

Get Smart with an Automation System

Average cost to install a home automation system: $1,282
Increase in home value: 3% to 5%

These days, smart intercom/doorbells that can show a homeowner video of a visitor at the door (and use remote communication) are becoming the Main Street version of the urban doorman. Smart garage door openers, security camera installation, and thermostats are also becoming more common. In addition to a smart thermostat, you should also consider hiring an ac repair service or furnace maintenance in Colorado Springs, CO to improve the energy efficiency of your hvac system.

Not only will these smart gadgets help you feel more secure in your home, they are also a big draw for the tech-savvy buyer looking for innovative and practical home features, says Mike McGrew, treasurer for the National Association of Realtors® and CEO of McGrew Real Estate in Lawrence, KS.

Low-hassle option: Consider a small splurge on just a Wi-Fi video doorbell. For as little as $100, you’ll have a fancy amenity that can provide convenience and some peace of mind.

Add an In-Law or Nanny Suite

Average cost of a basement remodel: $18,618
Increase in home value: 5% to 10%

Real estate agent Nancy Itteilag of Washington Fine Properties in Washington, DC, says she recently was “this close” to selling a home, but for one major obstacle: The property wasn’t fit to accommodate the prospective buyer’s au pair.

In her market, where double incomes are at an all-time high, there’s big demand for homes with an au pair suite, in-law unit, or a flexible living space (often on the lower level of a two-story house to maximize privacy for both au pair and family). So while the initial costs seem quite high, they could pay off in spades when it’s time for a sale.

Low-hassle option: If you already have a finished basement, you’re in luck. Want to give the feeling of privacy without doing a total remodel of the space? Throw up some temporary walls. For just over $200, you’ll have an extra bedroom instantly. And if your basement has a separate entrance, it’s all the better—it can double as a living space that can be rented out for extra income.

Create a Wine Room 

Cost of a wine cellar: Starts at $4,000
Increase in home value: Varies, but can be as much as 2%

We’re not talking about a dark closet where you hide your best reds (although those pay off, too). We mean a next-level wine space—possibly furnished with a small island or table—for entertaining guests and igniting conversation.

For some wine collectors, this room is becoming more of a showpiece than simply a repository to let wine age. Accordingly, in high-end homes, these cellars are also moving from the lower level to upper floors—often housed in glass walls and under LED lighting.

Wine Cellar SPACiO Built Out at 321 Ocean

While Realtors® agree that a wine room can increase your home’s value, this home improvement should be thought of first and foremost as a treat just for you. Because you deserve it!

“Wine cellars are a bit like swimming pools. They come in all shapes and sizes and costs. And the next folks that look at your house may want nothing to do with them,” McGrew says. “So do a wine cellar because you want a wine cellar, and don’t try to justify it by an increase in value when you sell.”

Low-hassle option: Carve out a space in your home to display a few decorative wine racks and a wine fridge to keep bottles chilled and ready for entertaining. You could create your own wine enclave for as little as $200!

Change Up Your Flooring

Average cost of installing new flooring: $2,853
Increase in home value: 5%

It might not sound sexy, but flooring is also high on the list when it comes to features that pay off in a big way. Whether it’s made of reclaimed hardwood or picturesque tile or features heating, it can set the tone for the whole house. The heat pump repair dayton service is what you’ll need for maintaining your home’s heater.

Want to step it up even more? Heated floors in common areas such as kitchens and bathrooms are a nice amenity for cold winter mornings—and, of course, add a sweet touch of luxury to your home.

Low-hassle option: If you’re looking for a home makeover on the cheap, consider new carpeting in neutral colors, which can go a long way in pleasing prospective buyers. The best part? The price tag, with an average cost of just $1,491.”