Subcontractors are companies or individuals hired by a general contractor to assist in completing a large-scale project. In the real estate industry, subcontractors are often specialists in various areas. Hiring these types of specialists often lowers the project risk for the general contractors, allows them to offer higher quality services and speeds up completion time for the project. There are pros and cons to using subcontractors. Though with effective communication and good contracts, most of these drawbacks can be eliminated. Subcontracting is very common in the real estate industry because of these factors and also because doing so often lowers costs for general contractors. Rather than maintaining their own specialized workforce requiring hourly pay and benefits, general contractors can work with small businesses or freelance individuals under a flat-fee contract. This also allows general contractors to work with clients in many different locations, helping expand their businesses.
