Hi guys, Was generally interested in those who have used PM's, especially interstate investors and was curious as to the payment structure you had in place with the relevant PM's. Fixed price contract? % of the renovation cost? Hourly rate etc? What was your average cost put aside for the PM in a standard renovation etc, or a better idea what % would you be willing to allocate for this service. I'm considering starting up a PM consultancy company based in Melbourne, specializing in renovations, extensions, bathroom and kitchen renovations, refits/cleanups, property management inc. cleaning/landscaping etc targeting interstate or international investors particularly but also local investors too. It would be a door to door service, using my existing contacts in all relevant fields, from engineering/drafting/design right through to completion and ongoing property management if required. Interesting to hear the forum members thoughts.
It's such a tricky one considering there is a common misconception out there that a Project Manager charges 10% of the reno cost. I for one would not manage a $50,000 reno for $5k - and I'm sure no one else would either if they knew what was really involved! From the clients I speak to, I think people do like a fixed price contract. That way they know how much they're in for up front (for reno costs and PM fees) and perhaps willing to risk spending a bit more than they might otherwise. That is; if they were to price up everything individually it might come to (say) $35,000 - $40,000 but for fixed $50,000 they get project management plus a buffer for any variations. That's if you're willing to take on that risk! The trick I think to a fixed price contract is to always have articulated up front exactly what is going to be done; a really detailed spec which is priced on and then implemented. I don't generally get involved in Project Management (not allowed here in Queensland even though I have managed many many renovations of my own and clients over the years!), but a few years ago when I did, I charged $20k for a renovation that cost $75k - and I earned every cent of that money. A lot of people would scoff at that $ amount/percentage but it's the reality of how much time and energy it takes. Good luck with the new venture; there are definitely people out there who need project management and are willing to pay for it, but there's certainly a lot of education to be done around cost expectations.
Fixed vs hourly would depend on the scope and the client. Most likely it would be fixed price. But perhaps hourly got variations. Whats your back ground? For your costs it would depend on the role you would take and the project. If your simply managing trades, you'd need to work out your time to, chase quotes, site supervision, risk, chasing suppliers, recieving deliveries etc etc but if your hands on you could "charge out" your skills as a subby and be on site whilst doing your jobs. I think hands on might be more profitable as you can take care of the miscellaneous jobs rather than getting a handy man in our trade
My entire office is my phone and computer so my overheads are nonexistent and I just completed a duplex development for a client with whom I agreed on an hourly rate. To take the development from vacant land to tenanted took me a total of 50 hours and that was being super honest. I can imagine someone justifying 60+ hours but regardless, if you consider that and what you need to charge to make it profitable, after overheads, you can get an idea what what you would need to charge, either hourly or for a fixed price, depending on the size. Historical data of your fees and costs should give a good indication of what you want/need to charge. I didn't base my fee on a percentage but calculating it now, PM was 1.5% of the cost. Jeremy
I hold a DBU in Victoria. I've managed $20m+ million commercial fitouts and my main background is in top end domestic construction. It's to be consultancy role, I've broken 6 suburb records with renovate to sell projects so far, I feel it would be an interesting undertaking to "pass-on" a lot of my knowledge, particularly in the design and finishes selection, space maximization, new trends, as well as providing quantities, supply trades, manage them etc. But no, this is designed not to be a hands on venture, s it's to be done concurrently with my other projects.
