Typical construction management fees run $3,100 to $49,700, depending on the complexity and size of your project
Construction managers charge a rate of 5% to 15% of the total cost of your project. Therefore, more minor renovations may cost as little as $3,100, while more extensive jobs, like building a new home, could cost as much as $49,000 or more.
Construction Manager vs. General Contractor
However, before deciding on a construction manager, it’s important to understand the differences between hiring a general contractor, hiring a construction manager, and doing the job yourself.
A general contractor is a professional (usually licensed, even for smaller jobs) who handles the completion of a project from start to finish. A contractor purchases supplies, brings a crew, and oversees every aspect of construction. When you hire a general contractor, you’ll know upfront how long the project will take and how much it will cost. The general contractor’s bill will detail the overall cost of building your home, including their fees, which are often included as a mark-up in material costs. Any cost overruns or other issues that may come up later are the concern of the general contractor, not you. Of course, if you authorize additional work or a reduction in scope during constructions, those costs will be itemized in a change order agreement.
Conversely, a construction manager acts as an agent on your behalf. They oversee the project to make sure it goes according to plan. Essentially, they’re your eyes and ears on the job.
They can help you find laborers and supplies, but you’re the one who is ultimately contracting with these professionals and paying the bills. As construction managers have experience in the construction field (and are often former general contractors themselves), they can direct the workflow, help manage costs, and inform you about potential issues. However, they’re not responsible for construction problems or cost overruns. When it comes time to close out your project, you’ll have two bills: the overall cost of your home, and the construction manager’s separate costs.
As you compare the jobs of a general contractor and construction manager, you’ll see that general contractors hold a lot more responsibility. That’s why they also cost more: A general contractor’s fee typically equals 10 to 25% of your total project cost. This means the $500,000 house in the above example might cost you $550,000 to $625,000, depending on the project’s scope.
When dealing with such large amounts of money, it’s natural to look for ways to cut costs. You may be tempted to cut the expense of a general contractor or construction manager. However, the problem is that if you don’t have experience with construction, chances are you may not enjoy leading an entire team of people to build a house. For example, how will you know if the job is being done right? How will you know if the work is up to code? Aside from that, do you have the time to be at the construction site every day? Try it, and you may soon feel as if you’re holding a second job. “The more experience your contractor has, the more valuable they are,” says Bob Tschudi, Expert Review Board member and general contractor. “They’ve probably made or witnessed costly mistakes on projects like yours in the past, and won’t likely repeat it!”
When deciding between a general contractor and a construction manager, you have to decide exactly how much work you want to put into the project. If you don’t have construction experience or the time to manage a project, a general contractor is your best bet. However, if you want more control over the build but need some help executing your plans, a construction manager may be the right fit.
Construction Manager Fee Cost Breakdown
Construction management fees are very straightforward. In most cases, you’ll pay one flat fee based on the overall cost of your project. Construction managers typically charge 5% to 15% for projects up to $1 million. This means you’ll pay $12,500 to $37,500 in construction management fees for a project valued at $250,000 and $25,000 to $75,000 for a project valued at $500,000.
How Much Are Construction Management Fees by Type?
Different types of projects carry different fees.
|Project Type||Average Cost||Construction Management Fees|
|Total Kitchen Remodel||$40,000||$2,000 – $6,000|
|Build an Addition||$170 – $200 per sq. ft.||$1,122 – $3,960|
|Remodel Multiple Bedrooms||$18,500 – $75,000||$925 – $11,250|
|Build a New Home||$150,000 – $450,000||$7,500 – $67,500|
Total Kitchen Remodel
The average cost of a total kitchen remodel is $40,000. This means construction management fees will run from $2,000 to $6,000.
Build an Addition
The average cost of building an addition onto your home is $170 to $200 per square foot. This means that if you’re adding a bedroom, you can expect to pay $22,440 to $26,400 in construction costs and $1,122 to $3,960 in construction management fees.
Remodel Multiple Bedrooms
The typical price range to remodel several rooms in your home is $18,500 to $75,000. This translates to $925 to $11,250 in construction management fees, based on your project’s size, complexity, and overall cost.
Build a New Home
The cost of building a new home varies wildly depending on location. But using a typical range of $150,000 to $450,000, you’ll pay $7,500 to $67,500 to hire a construction manager.
What Factors Influence the Cost to Hire a Construction Manager?
When you hire a local construction manager, you’ll find that they charge a flat fee for their services based on your project’s scope and overall cost.
Scope of Project
When you team up with a construction manager, the two of you are essentially splitting the role of a general contractor—you pay for materials and hire workers while the construction manager makes sure the job gets done correctly. However, construction managers can take on more or less responsibility depending on how much you want to take on. For example, if you don’t want to search for and interview contractors, you can let the construction manager do it. Just be aware that you’ll pay more for this convenience. “As the acting general contractor of your project, it’s your responsibility to make sure that every company and laborer that works on your house is properly insured,” says Tschudi. “You should also ask your insurance agent if you need home renovation insurance to cover costs above the limits of your existing policy.”
Overall Project Cost
Generally, construction managers charge a higher percentage for smaller projects than larger ones.
For projects valued at less than $1 million (most residential builds), construction managers typically charge 5% to 15% of the value of the project. This translates to:
|Project Value||Construction Management Cost|
|$150,000||$7,500 – $22,500|
|$500,000||$25,000 – $75,000|
|$750,000||$37,500 – $112,500|
For projects valued at $1 million to $10 million, construction managers usually charge 5% to 9%. For projects valued over $10 million, construction managers may charge as little as 1% to 5%.
How Much Does it Cost to Manage a Construction Project Yourself?
When you forgo hiring a construction manager, you can expect to save the equivalent of 5% to 15% of your project’s cost. If you’re building a home that costs $500,000 in labor and materials, that’s an extra $25,000 to $75,000 you don’t have to fork out.