Why Good Contractors Cost More—and How Investors Should Respond

TLDR
Skilled contractors can charge more when demand is strong and dependable crews are hard to find. Do not force the deal to work by underpaying people or hiding cuts. Reduce the work to what the property needs, remove friction for good crews, pay fairly, and keep building your vendor bench.

Table of Contents

Why Skilled Contractors Feel Harder to Find

This talk begins with Ross reacting to a claim that too few new tradespeople are replacing the people who leave the field. He sees the effect as higher prices, longer waits, and fewer dependable options for house flippers.

This source is not a labor-market study. It is Ross’s view from hiring and working with trades. His operating point still matters: when a useful skill is scarce, the investor has less room to treat every contractor as replaceable.

Strong demand can let weak contractors charge more too. A full schedule is not proof of good work. You still need a clear scope, checks, and a roster of alternatives.

Trade Skill Is Only Half the Business

Ross rejects the idea that skilled trade work is the same as entry-level hourly work. A person who can do a trade well, hold a license where one is required, lead others, and finish jobs can create real value.

The gap he sees is on the business side. A strong craftsperson may never have been taught:

  • Leadership.
  • Crew management.
  • Sales.
  • Financial control.
  • Business operations.

That gap can hurt both the contractor and the customer. The contractor may be busy but still struggle with cash and scheduling. The customer may see poor communication or a drifting timeline even when the trade work is good.

Do not confuse weak business systems with weak craft. Test both.

Lower the Scope, Not the Standard

An investor still needs the project to make money. The wrong response is to design a luxury rehab, then demand that contractors perform it for less than it costs.

Ross’s response is to do less work where the market does not pay for more.

That means:

  • Start with safety and the items that must be addressed.
  • Stop active damage, such as water getting into the house.
  • Preserve sound items when the target buyer does not require replacement.
  • Match the visible finish to the neighborhood instead of building above it.

He uses old but sound cabinets and counters as an example. Leaving them is not a hidden shortcut when buyers can see what they are getting and the local price point does not support new ones.

The line is honesty. Do not promise work and then hide that it was skipped. Do not leave a safety problem just to protect the budget. Confirm required work with the qualified people and local authorities who apply to your project.

Use Efficiency to Make Fair Pay Work

Ross does not connect “profit first” with paying people as little as possible. He connects it with removing waste.

The same contractor can become easier to afford when the working system improves:

  • The scope is ready before the crew arrives.
  • Materials and decisions are not blocking the work.
  • The contractor knows the finish you use.
  • The owner does not change the plan without a real reason.
  • Inspections and approvals happen when promised.
  • Completed work gets reviewed and paid without needless delay.

Repeat work helps too. A contractor who knows your houses, finishes, and process spends less time decoding every job. You spend less time setting the same expectations again. That saved time can support good pay without pushing the total job cost in the same direction.

Pay is part of the efficiency loop. Good contractors are more likely to return to an organized customer who pays the agreed amount for completed work.

Build a Bench Before You Need It

A tight labor market makes one-contractor dependence dangerous.

Keep recruiting even when the current job is going well. Build a vendor bench by trade and learn where each person fits. One contractor may be great for a small repair. Another may be able to run a full phase. Another may cost more but solve the hard jobs with less oversight.

Do not wait for a crew to disappear before you meet the next one. A bench gives you choices when prices, timing, or performance change.

The goal is not to cycle through people for every small issue. Keep the good relationships and keep adding options.

The Opportunity for Contractors

The same shortage that frustrates investors can create an opening for skilled contractors.

Ross sees two ways to use it.

First, add the business skills that make the trade more valuable: estimating, scheduling, financial control, leadership, and repeatable systems.

Second, learn the parts of a real estate deal that construction does not teach by itself:

  • Find a property at a workable price.
  • Estimate value from real comps.
  • Fund the full project.
  • Manage the work as an owner.
  • Sell or hold the finished property.

A contractor already understands the part that takes many investors years to learn. That does not make ownership easy, but it shortens one side of the learning curve.

What Investors Should Do Now

Use this order on the next rehab:

  1. Set the market standard. Know what the target buyer expects in this neighborhood.
  2. Write only the needed scope. Separate required work from work you merely want.
  3. Budget real labor. Do not make a weak deal look good by using a price no dependable contractor can sustain.
  4. Remove blockers. Have choices, materials, access, and approvals ready.
  5. Pay for the agreed result. Inspect the work and follow the payment plan.
  6. Keep recruiting. Add trade-by-trade options to the bench.
  7. Track the system. Note which crews need support, which can lead, and which should not return.

Contractor prices may still rise. The response you control is a smarter scope and a better operating system.

FAQ

Are contractors expensive only because there are fewer tradespeople?

No. Inflation, local demand, job difficulty, overhead, licensing, insurance, schedule, and many other factors can affect price. The source focuses on scarce skilled labor and the investor’s response to it.

Should I always pay the higher bid?

No. Align the scopes, then compare the full result, management load, timing, and track record. A higher price is not proof of better work.

Is keeping old material the same as cutting corners?

Not when the material is sound, the choice is visible, and it fits the agreed scope. Cutting corners means hiding a miss, breaking the agreement, or leaving an issue that should be addressed.

How can I pay well and still protect profit?

Buy correctly, keep the rehab at the neighborhood standard, reduce wasted work, and make the project easier to execute. Do not try to repair a bad deal by pushing every loss onto the contractor.

What is the first skill a contractor should add before investing?

Learn how to recognize and underwrite a good deal. Construction control helps only after the purchase price and exit value make sense.