Do small rehab crews keep people with hourly or with per job pay?

Five years in, I've run both. Piece rate for eighteen months and it wrecked my punch list. Guys finished fast and I paid for the speed twice, once in the piece rate and once in me driving back out. My callback hours went from about 3 percent of billed time to just under 9. Now it's hourly base plus a bonus per job, and the bonus only releases after the walkthrough is clear.

thatch, what's the bonus tied to exactly? Punch list clear is a judgment call unless somebody defines it, and if you're the one defining it your crew eventually decides you're moving the line. The per unit guy told me his whole argument for piece rate was that it removes that argument entirely.

I've been on the tools side of this, and the thing that made people leave shops I worked in was never the rate. It was not knowing if Thursday was a work day. You'll take $26 steady over $34 lumpy once you have a truck payment. Owners consistently get this backwards because they're looking at their own cost per hour and the worker is looking at their cost per month. Whichever way you go, how you classify people and pay overtime is a payroll and employment law question in your state and you want an actual professional on it, not a forum.

Managing the other end of this. When a landlord hires a piece rate turn crew, the callbacks land on my desk, not the crew owner's. Paint touch ups that weren't touched up, a toilet set on a bad flange. I've started asking crews how they pay before I recommend them, which surprises people, and thatch's 3 to 9 percent callback figure matches what I see.

Does workers comp change the math here? I'm working through licensing and the comp rate for carpentry in my state is a real number per $100 of payroll, and I can't tell if piece rate just relabels the same payroll or actually shrinks it.

Does crew size change the answer? Four guys feels like a size where the owner is on site every day and can just watch the work, which makes hourly cheap to supervise. At twelve I'd assume you need the incentive built into the pay because you can't be in three houses at once.

I'd pay hourly and price it into the bid. Predictable cost beats a cheaper cost I have to manage.

Nobody's mentioned drive time. My properties are 50 minutes out and a piece rate crew treats that hour as unpaid, which means they show at 9:40 and leave at 3:20 to beat traffic. Day rate at least makes the travel somebody's explicit problem to price.

This is above where I am but genuinely useful. My first rental closes in March and it hadn't occurred to me that how a crew pays its people would show up in my finished bathroom.

What's a punch list? I've read it four times in this thread and gathered it's the leftover small stuff, but I want to know if it's a formal document or just a phrase.

Model it as cost per completed turn under each scheme and include the idle hours honestly. thatch's shop at $28 hourly with six slow weeks a year on four people is roughly $26,900 of paid non production, call it 5 to 6 percent on top of every job. Piece rate moves that to zero and adds 6 points of callback plus recruiting cost at two departures a year. Those two numbers are close enough that the deciding variable is how lumpy your pipeline is. Steady pipeline favors hourly because the idle cost never shows up.

The bonus withheld until walkthrough is structurally a retainage clause, which is the same idea general contractors have used on subs forever, usually 5 or 10 percent held until final acceptance. Retainage rules and limits are set by statute in a lot of states, so if anyone is writing this into a subcontract rather than paying their own W2 people, the number you're allowed to hold and how long isn't up to you everywhere.

rigging, the writing the punch list at the start bit is the part I'd argue with a little. Half of a real punch list is stuff nobody could list in advance, drywall dinged during flooring, a door that binds after the house settles for three weeks. Your uncle's version works if the crew accepts additions in good faith, which sounds like it depended on him specifically.

The poll is missing profit share per job, which is the option two of the crew owners in my area actually use. Small percentage of job margin split across the crew, paid quarterly. It's hourly with a lag, and the argument for it is that the guys start caring what materials cost.

rigging has it. The envelope same week matters more than the amount. A bonus that shows up in a quarterly check gets mentally filed as the owner's money, and windlass, that's my problem with profit share. Nobody on a crew believes the margin number they're being shown, because they've never seen the invoice.

For anyone hiring a crew rather than running one, ask how long the current guys have been there. It's a two second question and the answer tells you whether you're buying the owner's reputation or a rotating cast that happens to be under his name this month.

Six units, and I've turned them with both kinds of crew. The hourly crew's turns cost me about 11 percent more and I stopped getting the second visit for touch ups, which I'd been treating as normal. What I'd add to sextant's model is the vacancy day. A turn that runs three days long at $1,650 rent is another $165 out of me, and the fast crew was genuinely faster.

cairn's vacancy point is the one landlords underweight and crews should charge for. Voted hourly base plus completion bonus. It's the only option in the list where somebody is responsible for the last 5 percent of the work, which is the 5 percent I spend all my time chasing.