Roofing Company vs "Cheap Labor" Roofing Crew
Anyone dealing the real estate market, flipping houses, rehabs, rentals, etc, has dealt with roofing issues. Anyone needing a roofer, has decide between hiring a "cheap labor" crew or a roofing company. Being on a tight budget, or a pre-forcasted budget means trying to save as much money as possible. The result is many times, crews are hired, and the person feels they have saved money. Well this is true in many instances but its certainly not true in many instances. What is the reality of hiring cheap labor versus hiring a roofing company a roofing contractor.
First off, an organized roofing company will save both on labor and material. For example, the saving on materials from roofing supply companies. Established long term relationships allows roofing companies get materials at least 10% cheaper price then others. This saving will be partly passed on to the customer. Second, when a roofing company gives a group of people work every day, they will do the work at a cheaper price then someone who is giving them work once or twice. Being a registered company allows you to have even in Home Depot pro rewards, etc.
Also, keep in mind, the prices "cheap labor" charges are market rate. Any experienced roofer, even if he is not part of a company will ask for the market rate. The market rate is determined by a combination of the prices from roofing companies and "cheap labor". Usually, when someone is willing to go down below market rate, it means they have lack of experience. I have seen plenty of times, someone hires individual roofers, below market rate, or wants to pay them by the hour, and they work one day, and do not come back the next day, or do a horrible job. I do not exactly believe in "you get what you pay for" but I do believe if you are paying lower then the market rate range, then something will give eventually, and it not worth the stress.
Another well known problem with "cheap labor" once they do the work, they vanish. Not this is not true in all the cases, but it is true in the vast majority of the cases. The reason is the crew leader took the money, already divided it among his crew. They do not have the funds to come back redo any work. No one in the crew is going to equally divide the loss of warranty work. While a roofing company, will usually, come back and redo any warranty work needed. Warranty work especially becomes an issue with leaks. Many times a roofer will think he or she got the leak but did not. He will need to come back, and continue the trail and error until he gets it. However, cheap labor roofers will not come back. This is a well known problem.
One aspect that many people forget is that when a roofing company gives you a receipt, its a tax write off in most instances. Many times people hire "cheap labor" and while it may seem like they are saving, but they do not get to write it off. Make sure you keep all your home improvement receipts for tax purposes.
Roofing companies are also aware of city codes. Which means sometimes roofing companies can give more then the obvious option. For a rental property for example, an overlay, may be the cheaper way to deal with a situation. On the other hand, letting someone not knowing the city codes do work may backfire in the long run.
Roofing companies also make sure their crews are trained. Sometimes, people learn a trade, become skilled, but knowledge is also increases, techniques of doing things is always improving. The skill to shingle is sometimes not enough to prevent a leak, if the person does not know about how to examine a roof itself. Roofing companies because they are trained are able to educate the customers, and give options. Whereas, "cheap labor" do mostly what they are told to do. A roofing company will give a few options for any given problems, generally speaking.
A roofing company will also carry insurance. Which means they will be able to cover any damage done. It has happened more then once roofers were on a weak roof and dropped through causing a lot of damage. Anything can happen. I have seen accidents of all sorts. Accidents, damages happen. What will so called cheap labor crews do when an accident happens, run. I know of a situation when a part of a roof caved in and the home owner was taking pictures of the crews cars. They left never to be seen.
In fact, some studies show that 1 in every 40 cases is a case of fraud at some level. So, its important you have a relationship with the contractor you are working with. Big data shows that in the long run a roofing company "can" save you more money if you build and negotiate a deal and a relationship. Yes in a day to day bases, cheap labor crews may be cheaper, however, a company can beat the price of of cheap labors if it wants to. However, its on you, to make that relationship work, so you can have the price advantage and all the other advantages mentioned.
Real Estate investors, real estate agents, flippers, wholesalers, etc.., are in a position of being a repeat customers. Which puts them in a position to negotiate a deal that is a win-win situation for both parties. Some will ask what overhead? A good roofing company will have minimum overhead. However, overhead is not the issue, the issue is profit. A repeat customer with less profits, is worth more then a a single big job for any company.
While most roofing companies can beat "cheap labor prices" if they wanted to, but some do not or would not do that because of many reasons, one of them is they are already over booked, or they are so used to prices by insurance companies they do not see beyond that. If a roofing company does most of its work with insurance companies, they may not be willing to give up on the prices they are so used to. Insurance companies pay the middle upper to higher end of the market rate. "cheap labor crews" can beat insurance company prices. However, if a roofing company wants they can go as low as any "cheap labor crews" for the most part.
So, what can you say to strike a deal with a roofing company to get the best prices? First, as mentioned, you need to establish you will be a repeat customer if the jobs are done right. Second you need to establish that you know they can do the job at a cheaper rate. Third, every real estate agent, real estate investor, flipper, rehab person etc... should know the parts of what make the price of the roof. Got to home depot or Lowe's, and see the prices of shingles, see the prices of felt, of the roofing nails, decking osb board, drip edge and sealant. All that remains is labor..... knowing the prices will help you negotiate better since you know the prices. Also, go and visit a roofing supply company. Let the roofing company know you have access to roofing supply companies, this will make them either run away, since you know the prices, or make them work with you.
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