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Becoming Profitable in Your Remodeling Niche

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Becoming Profitable in Your Remodeling Niche

The 2023 NAHB Remodelers Chair shares insights and advice for contractors in our 2024 Thought Leader predictions series

 


By Alan Archuleta February 9, 2024
Remodeling Market Predictions
Alan Archuleta
This article first appeared in the January/February 2024 issue of Pro Remodeler.

This is a snippet of Pro Remodeler's annual Thought Leader Predictions round-up featuring 11 remodeling leaders. Click here to read the whole story.


Predictions for Remodeling Growth

I’m forecasting between 10 to 15% growth in 2024. We’re in Morris County, N.J., and the real estate market is tremendously hot here right now. Our county brings in strong cash buyers, which is good for remodeling. 

There’s also a lot of clients who want to remodel rather than move. So many homeowners refinanced at 2 or 3% when rates were low, and they are staying put and renovating. I’m seeing clients with $150,000 primary bathroom projects. 

Challenges for the Remodeling Market

The tight labor market continues, and we have multiple local factors that affect the issue. It’s very expensive to live here, so it’s tough to find carpenters in the area. Many have a 90-minute commute, and that wears on you. People are thinking, “I was making $23 an hour as a carpenter, and I can make almost $40 an hour if I hustle with Uber.”  

Advice For Other Remodelers

Someone once said to me, “Contractors are all the same. You chase the bigger, sexier jobs because you think there’s more money in it, and you have huge egos.” That stuck with me. For me, being a smart contractor means staying in your lane, understanding what you do well, and working on becoming more profitable in that niche. Building materials are unstable, and there’s high demand yet a lack of labor. It’s a dangerous combination because a couple of small mistakes could eat you alive.

I don’t want to grow my company’s revenue too much because, in theory, my growth is coming through profit. The idea is to do roughly the same amount of business, but refine the process to be more profitable. I don’t want to work my fingers to the bone, have more trucks in the road, more fuel, more insurance, and so on. I just want to make a comfortable living with a manageable sized company. That means building a name on reputation, and slowly increasing profit instead of coming out of the gate and getting big. 


Comments (1)

  • Submitted by Les Fossel (not verified) on Tue, 02/13/2024 - 15:14

    Permalink

    We are probably the only business of our type in the country:
    * I have over 100,000 hours of time on task.
    * Our crew of 15 has a combined 185 years of experience.
    * We have been doing this since 1975.
    * We only work within an hour of our home base in Alna.
    * We have been featured in dozens of publications over the years.
    * We do not advertise (except our website), clients and employees must find us.
    * We have over a year’s contracted backlog.
    * We have the lowest worker’s comp rate for carpenters in Maine.
    * We pay everyone a living wage - pay starts at $20/hour with extensive benefits.
    * We are design/build (restore).
    * We do not work as subcontractors.
    * We work almost exclusively on historic houses and barns.
    * We do not work with architects, designers, draftsmen, project managers, consultants, or engineers.
    * We have a wall full of awards.
    * Most of our carpenters have college degrees.
    * None of our work involves private or government grants.
    * Our historic restoration costs are lower than remodeling contractors.
    * Our projects are both historically accurate and carbon neutral.
    * We guarantee our work permanently against defects of either workmanship or materials.
    * When I go to conferences, I am told you can’t do what we've doing for almost 50 years.
    * I’ve taught at two colleges.
    * I’ve taught Adult Ed classes for homeowners for 30+ years.
    * I teach real estate agents, assessors, appraisers, and inspectors.
    www.oldhouserestoration.com fossel@oldhouserestoration.com

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