Contractor Markup in the NW

From: A. D.

"Hi Carl, I really identify with your approach. Have you ever done any research on average contractor markups? I live in the NW and was wondering what someone would save on average to eliminate contractor costs."

Hi A. D.

Actually, it doesn’t matter if it is the NW, SW, NE, or SE., a builder has to make enough money to stay in business.

Each custom builder must evaluate his or her own situation in order to establish the markup percentage that will cover operating expenses and provide a reasonable profit.

Years ago, as a member of NAHB, I went to a seminar NAHB put on for builders that discussed builder markups and builder profits.

In a nutshell, here is what NAHB said:

“If a builder doesn’t make at least 25% gross profit (before business expenses) on every job, that builder probably won’t be in business in 5 years.”