Direct labour v contractor

carbuyer01

Hey guys,

We''ve had planning approved for a 2300 sq ft house the last 6 months.

Simple enough constructions, big square rooms etc.

Wondering which route is better, direct labour or contractor.

We've agreed to go with a contractor but what was agreed in person is very different to what was put down in the sale contract (not signed) and i'm thinking if its a headache even without turning a sod then do i need to look at other routes

Price of building is very strong and wonder what ball park percentage i can save by going direct labour. I would like to think i am some what competent when it comes to building and i would have access to various plumbers, carpenters, electricians, builders etc through my work.

I'm seeing people saying you can save up to 30% overall going direct labour.

Would love some insight form anyone who has done either or both for that matter and what savings were made or lost. I'm also aware direct labour is tough but at the end of the day if you can take up to 30% off a build cost then its worth it.

Thanks

sydthebeat

carbuyer01 wrote: »

Hey guys,

We''ve had planning approved for a 2300 sq ft house the last 6 months.

Simple enough constructions, big square rooms etc.

Wondering which route is better, direct labour or contractor.

We've agreed to go with a contractor but what was agreed in person is very different to what was put down in the sale contract (not signed) and i'm thinking if its a headache even without turning a sod then do i need to look at other routes

Price of building is very strong and wonder what ball park percentage i can save by going direct labour. I would like to think i am some what competent when it comes to building and i would have access to various plumbers, carpenters, electricians, builders etc through my work.

I'm seeing people saying you can save up to 30% overall going direct labour.

Would love some insight form anyone who has done either or both for that matter and what savings were made or lost. I'm also aware direct labour is tough but at the end of the day if you can take up to 30% off a build cost then its worth it.

Thanks

you dont "save" by going direct labour.

you simply take the role of the role and responsibilities of the contractor, therefore you earn that money yourself.

do you have the time and knowledge to undertake that role?

carbuyer01

sydthebeat wrote: »

you dont "save" by going direct labour.

you simply take the role of the role and responsibilities of the contractor, therefore you earn that money yourself.

do you have the time and knowledge to undertake that role?

I think i would, i have contacts in the construction side of things (suppliers) etc, so i think that side of things would be fine. But i'm not experienced in that line of work and a reason why i don't work in that industry.

Based on what you are saying from the above, all i'm saving is the monies which would be paid to the contractor.

TheBoyConor

Having contacts and knowing fellas is all well and good. But...

Who is going to be the Project Supervisor Construction Stage if you take on the role of Contractor? I assume your architect or engineer is your PSDP?

How much experience do you have in domestic construction? Realistically unless you have the relevant qualifications and experience of construction of this type, then you don't have the competence to be a PSCS or a Contractor in terms of meeting your obligations H&S wise. There is the possibility of appointing a consultant to be your advisor in PSCS and H&S matters, possibly your architect or engineer, but then they will have to have a more hands on role in the job too, getting and checking, method statements, risk assessments etc. Which will obviously cost more money and hassle. And dealing with small time trade subcontractors, they are a nightmare to deal with on anything H&S because they wouldn't be well up on it in a lot of cases.

At the end of the day you can do whatever you want, and all going smoothly it'll be fine and you will save money. However, if something goes wrong and there is an accident, well the HSA will be down and they will throw the book at your and nail you for every non-compliance they can find, even if it is not directly related to the accident. If you don't have a PSCS you will be nailed for that. If you do declare yourself PSCS, you will be nailed for not having the competence and for failing in your duties.
When a construction accident happens - it is the contractor and PSCS usually gets nailed with the blame, and the penalties are harsh. The HSA are a tough outfit, they take no prisoners. Second only to Revenue in toughness.

you can do it, but you are rolling the dice.

FintanMcluskey

I’ve not spoke to anyone recently who thought direct labour was worthwhile.

It was described as the most stressful part of people’s lives.

If you have friends/work mates in mind to complete some of the task’s be prepared never to speak with them again for various reasons.

The hidden costs are unbelievable

Not my experiences but what I’ve been told by a number of people I’ve spoken to

fits

We built a few years ago. Price agreed at outset and never deviated from. Am absolutely certain our house was well built by a good contractor. There was no way we could have ensured things were done in right way and right order with direct labour.

If I wanted to save money I’d build a smaller house. Ours is 1800 sq ft and it’s loads of space for family of four.

sydthebeat

Scoby 91 wrote: »

Don't be listening to people telling you that you won't save because you will save. I know few lads that are currently doing there house direct labour and altough yes it is a headache there saving in around 50 grand.

Iv just my house in for planning and what I will be doing once it gets passed is to sign a contract with a contractor to do the foundation walls and roof. This will ensure the structure is right and once this are completed sub in my own plumber electrician and plasterer to complete it builders finish. Get friends to hang doors etc.
So you have that option also. The reason I am doing it that way is because I want to make sure the foundation and blocks are right. You can avoid vat 21 percent with direct labour by getting your own lads who are vat registered to buy the materials under there vat number and pay them all cash

Don't listen to people saying you won't save thtad complete and utter bull****

You're well named aren't you.

By the way, what you're planning on doing isn't direct Labour. Your still contracting the house build.

hackersphorr

You will save money, that's for sure, but as a previous poster has said, what you are saving is the Project Management "fee" that the contractor is charging to coordinate the various trades.

The level of stress is determined by your own level of knowledge of construction. You have contacts, but are you knowledgeable in construction? They are two different things.

I found the issues lies in where one trade "ends" and another begins - this is where a contractors value is found, prepping for the next trade to come in and ensuring the previous trade finished their part properly.

I'm not discouraging, you just need to have your eyes open before you start a self build

TheBoyConor

Scoby 91 wrote: »

Don't be listening to people telling you that you won't save because you will save. I know few lads that are currently doing there house direct labour and altough yes it is a headache there saving in around 50 grand.

Iv just my house in for planning and what I will be doing once it gets passed is to sign a contract with a contractor to do the foundation walls and roof. This will ensure the structure is right and once this are completed sub in my own plumber electrician and plasterer to complete it builders finish. Get friends to hang doors etc.
So you have that option also. The reason I am doing it that way is because I want to make sure the foundation and blocks are right. You can avoid vat 21 percent with direct labour by getting your own lads who are vat registered to buy the materials under there vat number and pay them all cash

Don't listen to people saying you won't save thtad complete and utter bull****

That is still direct labour. You are assuming the role of Contractor and everyone else is subcontract, even the foundation and roof crew.

Again, it is all well and good when all is fine. When something is not fine, and there is an accident on site and someone is hurt, the HSA would string you up on every fault they could find. Unless of course you could demonstrate that you have the necessary H&S competencies as a Contractor and PSCS, which unless you are a construction professional, you cannot do.

RandRuns

Rarely does a month go by that I don't hear a horror story about someone that has gone direct labour with their house and ended up in tears.
I would strongly advise you to only go down this route if you have practical, in-depth knowledge of modern house construction. Building a house seems dead simple until you do it. I am aware of a case going on at the moment of a lad who went direct labour on a fairly substantial house because he was "in the trade" and thought he knew his way around. Turns out he worked in a builders providers...... I know the guy he hired to do the BER - he said airtightness is practically non-existent, heat pump way under-specced, and cold bridging everywhere. Owner refused to accept the results and said he'd get somebody else to do it! My mate was telling me the finishes were dire, with poor detailing everywhere.
This is a common enough theme I hear. Go direct labour by all means if you honestly know what you're doing. If not, like most things in life, it pays to hire a professional.

TheBoyConor

Very true.

Direct labour was grand 20 or 30 years ago when there was minimal or no H&S needs, no BER and a house build consisted of 4 walls, hit or miss insulation, basic plumbing and electrics, and an oil boiler, and no airtightness and no BCAR.

It is a lot more complicated nowadays and a DL route is a massive gamble unless you are already very clued in and know the technical and business end of the game. "Knowing a few fellas" is a recipie for disaster.

RandRuns

TheBoyConor wrote: »

Very true.

Direct labour was grand 20 or 30 years ago when there was minimal or no H&S needs, no BER and a house build consisted of 4 walls, hit or miss insulation, basic plumbing and electrics, and an oil boiler, and no airtightness and no BCAR.

It is a lot more complicated nowadays and a DL route is a massive gamble unless you are already very clued in and know the technical and business end of the game. "Knowing a few fellas" is a recipie for disaster.

Couldn't agree with you more - most fellas going direct labour are hearing about how easy it is from people who built their houses in the 90's. Different scenario now.

Would you build your own car? Because building a modern house is on a similar scale of technical complication, except that building your own house is an asset worth many multiples of a car, and is expected to last your lifetime.

TheBoyConor

Exactly. And back in the 80s and 90s people were self building because they wanted to save money as times were tight. Consequently, they were generally also building pretty basic designs, like a basic bungalow, or a bog standard square 2 storey. Not A rated McMansions with intricate facades, designed thermal mass, MHRV and heat pumps.

As anyone who looks at one off second hand houses of the era will tell you, very dodgy details, poor quality materials and finishes and just plain botch jobs are common enough to see in houses of the era. I looked at one bungalow where the footpath along the back was all cracked and broken up because of a sewer pipe with only an inch or 2 cover. And a roof with very undersized and rafters and not enough bracing was sagging badly in places. As for wastewater in that era - dig a hole, put "something" into it, cover it up , job done, forget it exists for 20 years. I have yet to see a rural house of that era with a septic tank that isn't a complete hatchet job that doesn't comply with even the light touch standards of those days.

Gumbo

Here’s one post from a direct labour extension in the forum today.

https://www.boards.ie/vbulletin/showthread.php?t=2058160647

Scoby 91

Bottom line If you can go direct labour then I would encourage it as long as you can experience in construction. If you don't have experience it can cost you in the long run.
Getting a contractor is the safest option however you are paying the contractor fee for security. Above as mentioned you will actually be charged the 21 percent vat no matter what you do if going direct labour. The builder can't buy the materials. It's you who has to buy them. The contractor can buy materials at 14 percent vat where if you go direct labour you will have to go 21 percent vat soon to be 23 percent. So you actually won't save anything by going direct labour. Rather then getting a contractor.
I was just talking to a contractor. I would be going down the contractor route after learning this. Why not have the security of your not saving anything by going direct labour

TheBoyConor

Also, the buck will stop with you if there is an accident on the site during the work.

If you had a contractor and PSCS, you are largely insulated from that risk of being personally nailed if something happens. As I said, the HSA take no prisoners.

Frozen Veg

FintanMcluskey wrote: »

I’ve not spoke to anyone recently who thought direct labour was worthwhile.

It was described as the most stressful part of people’s lives.

If you have friends/work mates in mind to complete some of the task’s be prepared never to speak with them again for various reasons.

The hidden costs are unbelievable

Not my experiences but what I’ve been told by a number of people I’ve spoken to

Have heard similar feedback.

Also need to consider there is going to be a backlog trying to organise trades when lockdown ends.

Calahonda52

So the opening premise is that the contractors margin is 30% which is ....ox

The only place you will see that sort of margin is when it's all done in cash, with no taxes paid anywhere and if you are borrowing to build nobody will sign off the stage payments against a black economy gig.

Re this piece OP
We've agreed to go with a contractor but what was agreed in person is very different to what was put down in the sale contract (not signed)
what exactly went wrong here?
what makes you think DL will yield a better result?

dubbrin

In our house exactly three years today. When planning was granted I sat down and thought out how it might work by DL. Have construction experience in plumbing, some electrics and some dry lining. Signed on a contractor to do it all bar heating/plumbing/ventilation which I have most experience in. Saved €12k approx there by buying materials through contacts and favours. That's all I took on bar specifying and negotiating for the windows and doors - paid the contractor directly, I did not want to be having to deal with any issues between trades & window company. Signed a contract for a 6 month build, it went 2 weeks over. For that alone I reckon we saved another €10-12k min on rent. I only got phone calls when there was a decision needed or to let me know about a problem and how they proposed to fix it. I spared myself minimum 18months of constant phone calls, stress, ordering and delivering, trying to work but having to arrange a bucket of stuff for some lad or a box of things for the next fella. I've heard so many stories of people having a block layer or carpenter lined up to do a few weeks work but when it comes to it they can't get hold of them or they're off at some other job or they're busy til christmas now......

My opinion is unless you are a tradesman or have a brother/sister who is, then you're going to struggle to find the savings. Difficult to engage friends for anything that isn't help under your own direction and supervision. It's so easy to fall out with someone. If you're a carpenter, brickie, spark or grounds worker you're sorted as you can do your own part and possibly more. Someone working in a different sector but thinks they know how to build a house will struggle to tie all the loose ends together, and in the right order.

Do yourself a favour, only do what you know you can 100% do.

fits

Just a note of caution too. Our contractor who was brilliant and so stringent about following regs. He had a fatality on the next site after ours. HSA came down on him like a ton of bricks ( I’m sure it all checked out afterwards )

You just don’t want that on you.

dh1985

Gumbo wrote: »

Here’s one post from a direct labour extension in the forum today.

https://www.boards.ie/vbulletin/showthread.php?t=2058160647

Where does it say that was direct labour. All I can see is builder been mentioned. As in a contractor was my understanding. May not have had a professional signing off but that's a different matter

dh1985

RandRuns wrote: »

Couldn't agree with you more - most fellas going direct labour are hearing about how easy it is from people who built their houses in the 90's. Different scenario now.

Would you build your own car? Because building a modern house is on a similar scale of technical complication, except that building your own house is an asset worth many multiples of a car, and is expected to last your lifetime.

Ah here will you get a hold of yourself. People have been building houses forever. Yes thing have changed and advanced in the past few years but if there is a decent engineer designing/specifying the build requirements then good tradesmen will follow without issue.
There is definitely savings to be made going direct labour but as some posters have said it's not without its hardships or risks. Whether people see that risk to be worth it is another question. Lots of self builders do and lots have perfectly sound functional homes that are as good as if a contractor was involved. Yes there is others that have issues but there is contractor built homes with issues also. Let's not forget about the crap thrown together during the Celtic tiger when everyone was a builder and it's going back that way again

Rackstar

Get a builder to build it. It was only towards the end of my build that it dawned on me, I’m not a builder wtf am I doing building a house. It was a nightmare.

maestroamado

For me direct labour the way to go if the fallowing.
You need to personally know the people who actually will build the bricks.
The same appllies to the roofer and second-fix carpenter.
The same applies to the perdon who plasters the build.
The groundwork also important but easier to find people for this.
Electrics/plumbing pretty straightforward.
If you do not know the reliable people get a builder...

iColdFusion

I would say unless your job title at the moment is project manager you are better off getting a contractor, now that doesn't necessarily have to be a boom time celtic tiger lad in a new landcruiser who is nothing but a middle man and never gets his hands dirty, I know two local "contractors" who are both carpenters and have good connections with other local trades which they subcontract out to under their remit and they complete the paperwork, insurances etc,but do the carpentry themselves so they extra over isn't too crazy just their time in managing the overall build.

I would be in a similar boat to yourself, job in construction sector, contacts in industry, friends and family in trade & professions but the more I think about all the other decisions and elements that I as the homeowner have to deal with the more I wouldn't want to lump trying to organise and chase lads for 12 months on top of that, its hard enough to get one lad out to look at your boiler!

There are some realities to getting mates rates from trades also, they may be your best buddy from school but its very likely if they are busy you are the one who will be left hanging as they know you wont mind, shur they are doing you a favour anyway and they only took the job because you asked and they were only really going to work on it in evenings and weekends, etc

Plus you really need to consider the practicalities of needing to meet lads on site during the week and in evenings, hard for me as my workplace would be a good 50 mins drive from where I will likely build and my days can be pretty hectic at the best of times.

If you are in any doubt watch the Room the Improve episodes where Dermot does his own house and see how catastrophically bad that went! :pac:

athlone99

In our house over 18 months. Went Direct labour, but when i say that the items i did myself or with friends family:
Ordered and priced all materials myself,
Put in the foundation and tied the steel myself with help - engineer signed off on it,
Did the sub floor/radon barrier myself
Did all drainage/sewage pipes,
Installed percolation area myself,
all landscaping works (had access to a 6 tonne digger and 10 tonne dumper for free)
did the air tightness, attic insulation, installed the HRV,
Put it the plasterboard on the ceilings,
put in the floor insulation, installed the timber floors then myself also,
Self installed a central vacuum system,
and some more i'm sure im forgetting.

Saved anything from 30-50k but this was working at the house almost every evening/weekend for 9 months. Still finishing of the landscaping, it was bloody tough on the body and mind but well worth it in the end.

I am a surveyor by trade and worked around the building trade for years but did months of research before we started so made things easier!

Gumbo

athlone99 wrote: »

In our house over 18 months. Went Direct labour, but when i say that the items i did myself or with friends family:
Ordered and priced all materials myself,
Put in the foundation and tied the steel myself with help - engineer signed off on it,
Did the sub floor/radon barrier myself
Did all drainage/sewage pipes,
Installed percolation area myself,
all landscaping works (had access to a 6 tonne digger and 10 tonne dumper for free)
did the air tightness, attic insulation, installed the HRV,
Put it the plasterboard on the ceilings,
put in the floor insulation, installed the timber floors then myself also,
Self installed a central vacuum system,
and some more i'm sure im forgetting.

Saved anything from 30-50k but this was working at the house almost every evening/weekend for 9 months. Still finishing of the landscaping, it was bloody tough on the body and mind but well worth it in the end.

I am a surveyor by trade and worked around the building trade for years but did months of research before we started so made things easier!

I’d class that as closer to self build, not direct labour.
Fair play.

athlone99

Well i suppose it was a mix of the 2. More Self build than direct labour but said id lay out what you can save if you put in the work/research yourself.

Oh and of course, offer cash where ever you can. Huge savings to be made

RandRuns

athlone99 wrote: »

In our house over 18 months. Went Direct labour, but when i say that the items i did myself or with friends family:
Ordered and priced all materials myself,
Put in the foundation and tied the steel myself with help - engineer signed off on it,
Did the sub floor/radon barrier myself
Did all drainage/sewage pipes,
Installed percolation area myself,
all landscaping works (had access to a 6 tonne digger and 10 tonne dumper for free)
did the air tightness, attic insulation, installed the HRV,
Put it the plasterboard on the ceilings,
put in the floor insulation, installed the timber floors then myself also,
Self installed a central vacuum system,
and some more i'm sure im forgetting.

Saved anything from 30-50k but this was working at the house almost every evening/weekend for 9 months. Still finishing of the landscaping, it was bloody tough on the body and mind but well worth it in the end.

I am a surveyor by trade and worked around the building trade for years but did months of research before we started so made things easier!

Given your skills, experience, and knowledge, I would say you were the ideal candidate for self-build. The problem is that lot's of people who "know a few lads in the trade" think they can do what you've done.

athlone99

To be fair i had a bit of knowledge but did alot of research for 6-12 months before we started and upskilled myself to allow me do it.

The whole mates in the trade is great but i found these were the people would let you down as they had there day job/family etc and asking them to give up evenings/weekends to help is a big ask! Easier do what you can yourself and just pay people to do the work monday-friday!

French Toast

We started a build in May 2020. Currently have the roof on, windows and doors in, first fit electrics done recently.

Both myself and my OH work full time. We didn't have the time, knowledge nor connections to go direct labour. We hired a reputable contractor who was highly recommended by a first cousin of mine. We haven't looked back, great decision and there's zero hassle.