Jerry's post about the $150/hour electrician sparked some thoughts I really want to share, especially for cheap-skates such as me.

There is nothing wrong paying someone $150/hour, if by doing so you are able to focus your efforts and make $300/hour or more. That's the name of the game in business. The guy/gal at the top pays someone to lift a burden off his/her shoulders that is limiting their time to specialize on doing X, where X is the most productive use of their time.

When I was a newbie, I thought I'd "save money" by doing all the cleaning myself. Cleaning a rental is a $15/hour job here, and that includes the cost of purchasing cleaning supplies. So I'd have a move out on Tuesday, couldn't get around to the job until Thursday after work, didn't have time to finish, my family wanted to go out and do things on Friday, and I'd spend all morning Saturday finishing up. 5 lost days of rent more than ate up and $15/hour "savings."

The above statements aren't rocket science. We all KNOW intellectually we shouldn't have a problem paying someone $1,000 for a job if we can net out $2,000 or more after paying him/her. But in our hearts we get stuck on paying someone else a lot of money and can't follow Princess Elsa's advice to"let it go..." even when it means denying ourselves a much better, more profitable use of our time.

Sure, if you're just going to sit around watching TV, then go ahead and demo that house...paint those walls...wire that circuit. But I think most of us watch only a little TV, and if we do it's something we truly value: cheering on a favorite team in a big game, a movie that profoundly impacts us, etc. What I'm talking about is wasting time searching 400 channels when there's nothing good on anyway.

Great Post Sid,...as usual.

My attorney charges $150.00/hour to do Title Searches and close a RE deal. Is there any reason a Master Electrician or Plumber should charge any less?

But ARE YOU making double to triple what you're paying ALL THE TIME?

A good example of that for me is on a current flip house I'm working on. I had an estimate from a contractor hanging the sheet rock on the ceilings and a second for do the ceilings and the walls. $1,800 for just the ceilings and $3,500 for everything. He won the bid for the ceilings only.

I can make way more "per hour" banging out the walls at the end of this job when the property sells than I can justify paying him.

We just had major water damage at a rental. All flooring must be removed, all the crappy particle board sub-floor removed and replaced with plywood. This requires at least two guys, a dumpster, lots of tools and probably a week or so of work. It's going to be over $6k. Ouch.

In the past, DH would have tackled the job himself, maybe roped in our sons for a couple of weekends if they could make it (hours of their drive time alone, let alone actual work) probably had me holding some boards while he sawed them...Plus of course seventy-eleven trips to Home Depot and the dump. And other things that inevitably come up. Who knows how long to actually get it done?

In this case, though, the place is already rented for July 1st so we couldn't take that time. It rents for $1250, so about half a year's rent in repairs.

Oh well. Because it IS rented, at least all repairs are deductible. And DH doesn't have to do the work, which is huge. What price freedom?

@Roy, thanks! To be clear, I do still negotiate and try to get the best deal, but at the end of the day sometimes the best deal means I pay more.

@NE, great comment. There's obviously a difference between how I factor the value of my time vs. an electrician. I add up all my profits at the end of the year and divide by my estimate work hours--which btw I am tracking much more closely now due to the 250 hour safe habor QBI rules--and that gives me a "per hour" rate, although some hours I made nothing at all and other hours I made $1,000 or more. You do the same thing is my guess. Think back to when you bought your last auction house that you cleaned up and flipped for a $20K profit. You probably spent hours looking at other houses and attending other auctions and made $0....but that's not the right way to think about this. It's the end result that you only know later that counts. That is far different from a tradesman who bills out at a set rate per hour. So yes, we should be conscious of that: but I invite the alternative perspective. You and I have less time to be out scouting that next awesome $20,000 profit if we're always busy swinging hammers, brooms or paint brushes.

@WMH, glad to hear you and DH still feel up to doing some tasks. Occasionally, I still pick up a broom and sweep a floor to spruce up a place a bit after a week of showings, just like the owner of the restaurant occasionally goes out to pick up trash in the parking lot. But I'm done laying flooring for now. My back hurt like crazy last time I did it. It's good to know that you guys are still going strong. If you enjoy it, why not? :-)

Homer, I think it's all relative. If you ENJOY the work, are physically able and productive, then go for it.

When people start to complain they are spending too much time IN the business and not working ON their business, that's when the preaching starts.

I think to figure out "per hour" wage though you are being pretty aggressive. You don't work 365 x 24. Maybe you are ON CALL that much, but you are not working that much.

To be more realistic, maybe use a W-2 job schedule. 40 hours a week x 50 weeks a year / 12 months = about 168 hours per month. I just did THAT math.

@Homer, I am coming from the same perspective as WMH. If you ENJOY the work, then do it. I think I covered that in my original post and the follow up to WMH, but if I was unclear then please know this now: your way is great if that's what works for you. I agree with WMH too that you're being aggressive counting your hours: at most, I would suggest 8 hours day * 5 days/week * 50 weeks per year, to account for weekends and holidays. The standard 2000-hours per year W-2 job, in other words. If that's your metric, then you're making around $80-$85/hour, which is pretty decent. No shame in that kind of figure. That's what I typically pay a Master Plumber!

The title of this post is "it's all relative". If you love doing it, then do it. No fuss, no harm, no foul.

W: "Seventy eleven trips"to the store. True Dat!

I did ALL my own maintenance for 20 years. Everything. I really enjoyed it. Learned every trade, everyone at Lowes knew my name because I was in there 2x a day, had a big ring of keys on my belt to show off how many properties I had, and great personal satisfaction getting things fixed with my own hands.

I get it. It's fun and fulfilling.

But after 20 years I hit 2 walls:

1. I was exhausted and frustrated by re-working the same houses over and over when housebeaters were evicted.

2. I had no time to grow my business. Deals were passing me by or I was at a project to work but spent so much time on the phone with the Realtors and closings I was not getting the houses turned. I would miss the sheriff sale because I had to meet the Sec8 Inspector.

I see many LLs quitting the biz because they tire of repairs or they procrastinate and let properties sit vacant rather than repair them, losing money. They usually blame it on lousy renters.

Those whining LLs spent no time on MANAGEMENT - checklists, hiring some help, and knowing their numbers.

BRAD

Opportunity cost.