HVAC contractor pricing - no thanks

[Rc_Guy]

Something makes me think he'd do a lot better in Texas.
When I grew up, MOST of the homes in Michigan didn't have AC where we were.

They still need heat though. And I would bet most have AC now.

 

[Jgaz]

Would it be better to completely open the residential HVAC market so the average homeowner could buy a gas appliance or parts and install them without any safety measures taken? None of the wholesalers will sell to the public around here, for good reason, most people are too stupid to know when they're over their head in danger. A small family owned supplier gets people coming in everyday. Asking him to troubleshoot for them when they are clueless on what they're doing. I certainly don't want my clueless neighbor blowing up his house, killing me or my family. I also won't install some ****** unit you've bought online, simply because I forever will be married to it, any problems would be my fault. It's bad enough now that the public can buy an A/C unit and install it themselves. I have no doubt there have been electrical fires caused by the same ignorant people doing their own work who shouldn't be allowed to plug in a toaster. Judging by some of the questions asked on this forum people are not interested in learning about anything, they just want to save money. The average consumer does need to be protected from themselves.

The same could be said for certain people and their DIY repairs I’ve had to correct over the last 40 years as an auto mechanic.

 

[threewood]

HVAC companies charge what they do because people pay it. It may seem like a ton of money to some or reasonable to someone else.

I do most of my own work because I get satisfaction out of doing work myself. I can't afford to drop $15k on an hvac install. Not saying it is out of line but I would like to not go broke to have a/c. I do my own vehicle repairs too. I like saving money where I can.

 

[danski0224]

A good buddy of mine ran his own HVAC business for several years in Michigan. He barely made enough to keep the lights on. It's a cut throat business.

There are a lot of very small shops out there, like one person small. They do not advertise.

It is very difficult to go from "owning a job" to "owning a business".

One can very quickly reach a point where an installer team is needed to do the work that you get. No one wants to be a "part time helper", so there needs to be enough work to keep the install team going, 40 hours a week, or you will lose them to someone that can (or promises that they can).

Let's not even get into finding a *qualified* install team.

The job itself is injury prone, and there is a big difference between having a 1099 "helper" (which is actually an employee and the 1099 stuff is illegal) and just doing the right thing and having employees.

The shops that advertise all of the time and charge the exorbitant prices are orders of magnitude larger than the 1 person shop that "owns a job". Even with 3 people, it takes a real steady flow of work to keep it going. You almost need 2 teams and 1 salesperson and tech support to make it work.

HVAC is typically "on demand", so if that 1 person shop is busy, the person with the failed heat or AC won't wait- even if it is otherwise possible to wait (no freezing damage, for example). Feast or famine.

There are customers that will not use the "1 person shop" because they believe that the 1 person can't do the work.

I don't know how the big non union shops shuffle people and hours around. I would guess that there are those that do not get full weeks of employment on a regular basis (until they quit), and they are probably told to "cut hours" to avoid being paid overtime. Even on my side of the fence, it is difficult to have *enough* work to keep everyone busy but not to have *too much* work where someone is needed to be hired, and delays or cancellations throw a big wrench into the works. Then people are sitting home. Despite having muti millions, the owners of the place I work for are NOT charitable. If there's no work, they aren't paying you... but one of them does make a very good effort to find something first, which is very good. They do understand that it is difficult to just get another body.

 

[mikester]

Nope.

Not even close.

I was billed $14k for a 5 hour surgery.

There's another $5k in tools (sharps) on the detailed bill

Not sure what kind of surgery you had done but in '22 I had a stent done, two weeks later a new aortic valve and 4 days after that a wireless pacemaker dropped into my heart. A total of 2 nights in the hospital. My bill was over $825K.

 

[danski0224]

Neurosurgery and an ENT. 14mm hole cut in my skull.

 

[rattle_snake]

********.

Final price of my equipment was $5673. 2T + 3.5T. Installed and running
You still calling me full of ****?

Your continual rant has not and isn't going to changing anyone's opinion on the subject.

 

[rattle_snake]

Another point of data, I paid $1000 for partial install of two heat pumps. Contractor did reclaim, sweat, leak test, evac, fill and final test. Myself and a friend did the rest. The original install and subsequent ******* was piss poor so I improved a few things no one will ever notice.

So that put me at $6673 installed plus a day of my time to research, and a day of work.

 

[beltfeed]

Another point of data, I paid $1000 for partial install of two heat pumps. Contractor did reclaim, sweat, leak test, evac, fill and final test. Myself and a friend did the rest. The original install and subsequent ******* was piss poor so I improved a few things no one will ever notice.

So that put me at $6673 installed plus a day of my time to research, and a day of work.

Was the original install done by a professional ?

 

[engineer2]

Know someone that got a new furnace and AC last month.
Got quoted a 100,000 BTU natural gas and 3 ton AC. 80% efficiency, pretty much a straight swap.
Old fan motor and squirrel cage self destructed during zero weather, so no time to shop around. $3800 to replace the fan or $14,500 for new furnace and AC. They opted for a new 80% system and new AC.
Company subbed it out to a different HVAC company. The two installers had that "just got out of prison" look. Got it done in about 7 hours. The installation had issues and they've been back twice three times to fix stuff.

 

[danski0224]

That *****.

The person that subbed it must have added 100% or more.

Sounds like one of the home improvement estimates I received.

 

[toyotadriver]

That's why you always get multiple quotes. And, that's also evidence that "professionals" do garbage work from time to time and at the same time, amateurs can do very good work.



Nothing in this post should be misunderstood, interpreted, misinterpreted, or construed to be of a political nature.

 

[danski0224]

That's why you always get multiple quotes

I'm finding that actually getting the follow through is a problem.

 

[meathooker]

It's an obscene profit, don't buy into this "overhead" nonsense. There are places that shoot the moon, and unfortunately some homeowners pay it. I knew one place that does the $18k-$20k install for a mid grade heat pump and has all the forms ready so they can put a lien on your house and have a low payment plan. They do about $100+ million plus in revenue every year. It's sleazy, but someone is getting obscenely wealthy. It's not like they're going to stop if people are willing to pay it.

I do run a business and I have a payroll with skilled labor with significant overhead and we're not charging a thousand dollars for each man hour of work.

FWIW, I had a mid grade Trane heat pump installed post-Covid, all new including duct work and condensation lines, around $8k for everything Legit outfit that has been around for several decades. Had a minor issue, had great after product support.

The industry average profit for mechanical contractors is something like 3-5%.

some sources say 5-7% this one is for construction in general - https://www.procore.com/library/contractor-overhead-and-profit-construction

there is a lot of risk involved with thin margins.

 

[danski0224]

The industry average profit for mechanical contractors is something like 3-5%.

Yes.

#2 business failure after a restaurant is HVAC contractor.

 

[dcg9381]

The industry average profit for mechanical contractors is something like 3-5%.

I'd find that hard to believe.

some sources say 5-7% this one is for construction in general - https://www.procore.com/library/contractor-overhead-and-profit-construction

GCs here 15% on the low end. I know one that will "flat margin" at 30% of a remodel if he can pick the materials and subs. In boom times, I know his margins on spec homes have been over 45%.

All I know is that my concrete contractor drives a very nice (new) Land Rover and his wife looks like Claudia Schiffer. The maintenance on both has to be a non-trivial amount.

 

[LXCam]

Another point of data, I paid $1000 for partial install of two heat pumps. Contractor did reclaim, sweat, leak test, evac, fill and final test. Myself and a friend did the rest. The original install and subsequent ******* was piss poor so I improved a few things no one will ever notice.

So that put me at $6673 installed plus a day of my time to research, and a day of work.

Good on you Justin. A buddy of mine is having his 5t condenser replaced today. $12k

 

[Smoker]

Good on you Justin. A buddy of mine is having his 5t condenser replaced today. $12k

I just replaced an older Carrier with a 5t Lennox heat pump and new coil. Just over 10K. 3 quotes all within $500 of each other, aint no bargains anymore unless you DIY. The new shop I'm going to do just that as I have way more time.

 

[danski0224]

I'd find that hard to believe.

Industry average.

Any idea just how many HVAC contractors are out there?

 

[engineer2]

^ There are so many around here it seems to have diluted business opportunities. I bet there are 30+ HVAC contractors within a 10 mile radius of me. Plus many of the employees will do side work. One local company that has a decent reputation recently sold out to Precision Today, a big Chicago area GC. I wonder if corporate buyouts are becoming more common.

 

[dcg9381]

I wonder if corporate buyouts are becoming more common.

That would not surprise me at all.

 

[Jim greengo]

That's because, outside of a trade union, the pay for trade work *****.

You're working for the wrong shop.

 

[gbarnesnavy]

Those "barriers" are educational and job experience.

Was it this thread or another where people are saying that HVAC is easy and anyone can do it?

These requirements say otherwise. I would be all for that stuff here in Illinois.

There's 14 other States you can move to and make big money and get rich doing HVAC... apparently... or maybe not. Maybe it isn't so ******* easy...

Not sure why you need to speak to others like that here. You make some good points that get lost behind your attitude. Just saying. No one is personally attacking you. People are just getting fed up with all the price gouging going on in America now.

 

[gbarnesnavy]

I really don't understand why you insist on claiming I say things I never did. You do this in literally every thread. I never said there was a "shortage" of HVAC contractors in my area, and I never said the barriers to entry were "crippling" high.

I said there are a limited amount of "sellers", and that the market has high barriers to entry, meaning it's difficult for newcomers to enter the market. "Limited" does not mean "Shortage" and "high barriers to entry" does not mean "crippling" to do it. Those characteristics (along with some others) just mean the HVAC market is not a free market, and therefore does not abide by "free market rules" that other types of markets more closely resemble. So it's pointless to constantly keep claiming that HVAC pricing is governed by the "free market", because it is not.

Look up the "characteristics of a free market"

Stop bothering yourself. You have made some excellent points. You can't have a reasonable discussion with those that are speak on emotion vice rationale reasoning.

 

[danski0224]

You're working for the wrong shop.

Not sure about that.

The numbers don't lie:

Hvac Technician Salary in Illinois: Hourly Rate (May, 2024)

How much do Hvac Technician jobs pay in Illinois per hour? The average hourly salary for a Hvac Technician job in Illinois is $26.67 an hour.

www.ziprecruiter.com

I don't see the average of $27 an hour to be all that great, certainly not where I am located, and if it is about residential work, then there will be hard sells and spiffs involved. Union journeyperson is almost twice that, before bennies.

I realize that there's "the big stuff" and refrigeration, but the number of available jobs there (in my area) is less than the residential installer market. A large percentage of "the big stuff" is controlled by union labor. Plenty of buildings in Chicago where you ain't gettin in without a union card.

Plumber is in the same ballpark.

Union Plumber Salary in Illinois: Hourly Rate (May, 2024)

How much do Union Plumber jobs pay in Illinois per hour? The average hourly salary for a Union Plumber job in Illinois is $30.16 an hour.

www.ziprecruiter.com

Odd how that actually specifies "union plumber", because you will be making (again) roughly double per hour.

There's certainly no shortage of trade jobs, if one is happy working for what will generally be less per hour.

Of course, there is no guarantee that the union worker will work for 52 weeks, either. Thirty bucks an hour for 52 weeks is the same as 50 bucks an hour for 30 weeks...

The place I am at now is better than most I have been at previously. Too bad I wasn't there 15 or more years ago.

 

[toyotadriver]

Everyone wants to make a good living...but many people don't want to have to pay toward a good living for other people.

"Businesses are price gouging me" but then from the same people "Businesses aren't paying me a living wage". Can't have it both ways.

Total nonsense. Good work costs money. Some people have the skills to do it themselves and those people will save themselves a LOT of money over the years (not just HVAC work....plumbing, carpentry, auto repair, electrical, etc). Some people lack those skills so they will have to pay for someone who has the skills to do the work. Just the way it is.





Nothing in this post should be misunderstood, interpreted, misinterpreted, or construed to be of a political nature.

 

[Jim greengo]

Not sure about that.

The numbers don't lie:

Hvac Technician Salary in Illinois: Hourly Rate (May, 2024)

How much do Hvac Technician jobs pay in Illinois per hour? The average hourly salary for a Hvac Technician job in Illinois is $26.67 an hour.

www.ziprecruiter.com

I don't see the average of $27 an hour to be all that great, certainly not where I am located, and if it is about residential work, then there will be hard sells and spiffs involved. Union journeyperson is almost twice that, before bennies.

I realize that there's "the big stuff" and refrigeration, but the number of available jobs there (in my area) is less than the residential installer market. A large percentage of "the big stuff" is controlled by union labor. Plenty of buildings in Chicago where you ain't gettin in without a union card.

Plumber is in the same ballpark.

Union Plumber Salary in Illinois: Hourly Rate (May, 2024)

How much do Union Plumber jobs pay in Illinois per hour? The average hourly salary for a Union Plumber job in Illinois is $30.16 an hour.

www.ziprecruiter.com

Odd how that actually specifies "union plumber", because you will be making (again) roughly double per hour.

There's certainly no shortage of trade jobs, if one is happy working for what will generally be less per hour.

Of course, there is no guarantee that the union worker will work for 52 weeks, either. Thirty bucks an hour for 52 weeks is the same as 50 bucks an hour for 30 weeks...

The place I am at now is better than most I have been at previously. Too bad I wasn't there 15 or more years ago.

I was paying my guys more than that 15 years ago when I retired in omaha,non union shop.

 

[Snapped-off]

Found myself in a residential HVAC conversation today at work with our HVAC contractors while we were commissioning new air handlers.

They were talking about how most of the residential guys are complete scumbags. "One guy sold a brand new furnace over a bad breaker. What a great salesman. No what a *************"

Must be a hot topic right now.

 

[danski0224]

They were talking about how most of the residential guys are complete scumbags. "One guy sold a brand new furnace over a bad breaker. What a great salesman. No what a *************"

I would agree 110%.

 

[meathooker]

Not sure about that.

The numbers don't lie:

Hvac Technician Salary in Illinois: Hourly Rate (May, 2024)

How much do Hvac Technician jobs pay in Illinois per hour? The average hourly salary for a Hvac Technician job in Illinois is $26.67 an hour.

www.ziprecruiter.com

I don't see the average of $27 an hour to be all that great, certainly not where I am located, and if it is about residential work, then there will be hard sells and spiffs involved. Union journeyperson is almost twice that, before bennies.

I realize that there's "the big stuff" and refrigeration, but the number of available jobs there (in my area) is less than the residential installer market. A large percentage of "the big stuff" is controlled by union labor. Plenty of buildings in Chicago where you ain't gettin in without a union card.

Plumber is in the same ballpark.

Union Plumber Salary in Illinois: Hourly Rate (May, 2024)

How much do Union Plumber jobs pay in Illinois per hour? The average hourly salary for a Union Plumber job in Illinois is $30.16 an hour.

www.ziprecruiter.com

Odd how that actually specifies "union plumber", because you will be making (again) roughly double per hour.

There's certainly no shortage of trade jobs, if one is happy working for what will generally be less per hour.

Of course, there is no guarantee that the union worker will work for 52 weeks, either. Thirty bucks an hour for 52 weeks is the same as 50 bucks an hour for 30 weeks...

The place I am at now is better than most I have been at previously. Too bad I wasn't there 15 or more years ago.

I tell anyone looking into the union “the best time to get in the union is when you are 18 years old. The second best time is right now”

 

[meathooker]

GCs here 15% on the low end. I know one that will "flat margin" at 30% of a remodel if he can pick the materials and subs. In boom times, I know his margins on spec homes have been over 45%.

we typically put 14% on estimates but that doesn’t mean you end up there. between techs installing incorrectly, employees getting in fender benders, reading a tape measure incorrectly, estimator forgetting a piece of equipment on a bid, compressor failing and the manufacture only reimburses one hour of labor and dozens of other circumstances the 3-7% range is painfully accurate at the end of the year. In fact sometimes is 2% …

 

[rattle_snake]

I will never let another 'HVAC tech' touch my A/C wiring after the last one reversed wires replacing a cap, causing a short to pop breaker. Then they gave me a quote to replace the entire system.

I measured the compressor coil and found it ok, studied the wiring diagram, and fixed it. Saved a huge pile of my own money. So I'll say it again, the HVAC industry is full of hacks and scammers.

 

[jar944]

I will never let another 'HVAC tech' touch my A/C wiring after the last one reversed wires replacing a cap, causing a short to pop breaker. Then they gave me a quote to replace the entire system.

I measured the compressor coil and found it ok, studied the wiring diagram, and fixed it. Saved a huge pile of my own money. So I'll say it again, the HVAC industry is full of hacks and scammers.

This was the result the last time I let one inside the house.

Furnace threw a pressure code testing showed it was only pulling .4 wc when it should be .52

I pulled the inducer housing and found this balled up caulk that could only have ended up there by being dropped down into the draft inducer housing during the evap coil install a few months prior.

That was after spending 7k for a new 3t ac system (2012) on a 2001 80% 80k Furnace and a reused lineset.

 

[dcg9381]

So I'll say it again, the HVAC industry is full of hacks and scammers.

It's just full of $20/hr employees operating under the license of a contractor for margin.

 

[danski0224]

It's just full of $20/hr employees operating under the license of a contractor for margin.

This.

 

[danski0224]

That was after spending 7k for a new 3t ac system (2012) on a 2001 80% 80k Furnace and a reused lineset.

It's unfortunate that stuff was allowed to fall into the vent pipe- that is what tape is made for. Of course, there is the possibility that it was intentional and not accidental.

Pricing... may have been in line with your location and equipment chosen.

I would have pushed for a new furnace.

Reused lineset:

• Was replacing it an option?
• Well, there is always the option to replace it, but most people do NOT want to have their house cut up to gain access, or have stuff on the exterior.
• Was replacing it actually quoted out?
• I have yet to have a customer pay for access to replace an existing concealed lineset, or to pressure test it for a few days if the absence of couplings/fittings can't be confirmed. But the same customer wants me to guarantee that there are no problems. They invariably go with the cheaper guy that will slap it in- including connecting to something where the tube sizes are not right.

 

[reader2580]

I will never let another 'HVAC tech' touch my A/C wiring after the last one reversed wires replacing a cap, causing a short to pop breaker. Then they gave me a quote to replace the entire system.

A human made a mistake so you’re never going to deal with an entire industry again? I’m sure you have never made a mistake in your life.

I work in IT. I have made mistakes over the 23 years at my current job and have yet to be fired. I have rebooted a couple of servers by mistake and even accidentally disconnected a senior VP’s phone while on a phone call.

 

[Sumboodie]

For those of us that have the ability to do this stuff its easy to complain about what businesses charge for it. But if you really knew what the costs of doing business are now days you would understand the prices. Its almost impossible to even find a good helper type employee for less than $20 an hour. That $25 probably ends up costing the employer $50 I would imagine any decent HVAC tech is making close to 6 figures now days. Not to mention vehicle costs, insurances etc etc etc.

What do you guys do for a living and what rate is your work billed out at ?

$20/hr one job, run trucks and equipment
28 another job, same
32 another job, same
4th job probably works out to $5/hr (self employed)
5th job $135, but lot of costs, so probably 50/hr take home

 

[reader2580]

$20/hr one job, run trucks and equipment
28 another job, same
32 another job, same
4th job probably works out to $5/hr (self employed)
5th job $135, but lot of costs, so probably 50/hr take home

I imagine you're a W-2 employee for at least some of those jobs otherwise $20 an hour would be pretty low for self employment.

 

[ramchill]

Yup, new install prices at absolutely outrageous right now. There are now big chain HVAC companies coming in and purchasing the smaller guys and jacking prices up. No one does time+materials anymore. They'll give you a quote, and that's it. It will have 200-300% markup on the equipment, two guys will show up, slam the whole install out in a day, and then when you do the math, you'll find that you paid anywhere between $500-1000 per man-hour.

The bootlickers on facebook, forums, and wherever else you vent about it will then chime in with something like "You'Re NoT PayINg foR theIr TiMe, yOu're pAyIng fOr ThEir KnOWledGe" or "OvER hEad". Even though the install techs that showed up your home are two newbies the temp firm found last week, making $19.50/hr.

The pricing is getting so ridiculous now, that you can buy the equipment yourself, buy all the tools, take a few hours to learn how to install it all, throw all of the equipment and tools away and buy another complete set of equipment and tools because you did it wrong and ruined everything, install it again and STILL save money compared to paying someone to do it.

The part you missed is the licensing. You have to be EPA certified to handle any of this.. and on top of that you also have local building codes, which is a separate license, depending on your locality.