Drive Time for Custom House Construction is a little known BIG financial impact issue about which very few homeowners know.
Let’s look at this little known BIG issue that you probably don’t even know about or think about when you hire a Builder to do a project for you. Like most homeowners, you probably just pay the bills, whatever it costs, because most construction these days is by the COST PLUS method. Meaning: the Builder charges you whatever it costs him, plus a healthy percentage for profit. What you likely don’t know: is that a chunk of what you’re paying for isn’t even actual work being done on your project on your property.
What? you say. How can that be possible?
Huh? What the heck is that?
Well, that is the TIME the workers take to drive to and from your site every day.
“Oh,” you say. “That can’t amount to much. I don’t care about that.”
Builders will pay a senior Carpenter anywhere from $17/hour to $35/hour these days, working on a custom mountain house. And most Builders can substantiate a billing multiple of 2.5 to 3.5. Which means you will be billed from $42.50/hour to $122.50/hour for every hour a senior Carpenter works on your house. Let’s take an average of perhaps $82.50/hour, for all Carpenters okay? Now then: you probably think that’s what you will be charged for every hour they are working building your new dream home. Nah. You will be charged that rate for every hour they ALSO drive to and from your project.
And do you think the carpenters building your expensive dream house can afford to live in your posh neighborhood? No, of course not. They probably live at a lower topographical elevation (not on top of a mountain) and probably have to drive about an hour EACH WAY to work on your house every day where they report to work.
Let’s do some math in case you think that’s inconsequential.
5 days a week x say 4 carpenters for which you are billed that average rate of $82.50/hour. And times TWO hours each day (there and back) for those 4 people= 5days x 2hours x 4workers=40 hours a week for JUST DRIVE TIME x $82.50 = $3,300/week for just Drive Time x 4.25 average weeks in an average month= $14,025 x 18 month average build time for a modest house = $252,450 JUST FOR DRIVE TIME ON YOUR HOUSE. THAT’S OVER A QUARTER OF A MILLION DOLLARS JUST FOR DRIVE TIME. Now then: does THAT sound inconsequential? This is just one of those nasty secrets about construction costs that no one is going to tell you. And that is of course ADDED to the cost of materials and labor expended working on the actual house. Which is just one more reason construction of homes is so expensive these days. And since the Builders cash in on the billed rate and get their lion’s share for each hour of drive time, they have no incentive to contain collateral costs like this: they get most of that. And if the guys stop off to get breakfast and/or coffee from the main office where they clock in, then on the way to your house, do you really think they clock out while they’re doing that? Think again. And how about going back “down the mountain” at the end of the day? Perhaps stop off for some drinks and snacks on the way back to the office? While the meter is still running on your wallet? Does that drive you insane? It should.
And Wait! There’s more… You’re thinking: “The Carpenters WON’T be working on my house everyday, 5 days a week for 18 months.”
And you’re correct. But you know what? Then you’ll have the Electricians and Plumbers and HVAC crews, Painters, Drywallers…in total typically about 50 different trades, with each crew of about 4 people more or less, often 200 to 250 people. So: do you know what that means? That’s right: there will continue to be Drive Time for most if not all of them. And you won’t even know it’s happening, unless your Architect points it out to you when you ask why you’ve paid so much to build your house and it seems to be taking longer that what the bills seem to register. Drive Time for nearly everyone working on your house.
Does it sound like this Architect company has been doing this for over a half-century? Yes. That’s how you learn about things like this. By questioning everything.
Which is one of the reasons this company is here: to provide clients with facts about the design and construction of your next custom mountain house. And one more reason you need a licensed Architect on your side. The Architect will likely discuss the above with your Builder and try to negotiate a more reasonable Drive Time rate (certainly NOT the same rate as actual work on your house, but enough to cover gas and wear and tear on a vehicle as a mileage rate). One more reason to have an Architect design your next custom mountain house and to have them process the Contractor’s Pay Requests, and to suggest and review your form of agreement with your Builder before you sign it, along with your Attorney.