Minimum Bottom Line Profit Should Average 9.4%!
For Trades & Subcontractors, at Least 11%
After Income Taxes Are Paid!
The residential construction industry’s average net profit after taxes equals 9.4% during 2019. The top four companies in the United States built and sold 151,366 homes during 2019 with an average sales price of $376,703. Each home netted after income taxes $35,464 of profit. This equates to an average net profit of 9.4% in the residential construction industry.
This research ties to the following summary schedule from the publicly availabe financial statements and annual reports:
Name of Company 2019 Closings 2019 Sales 2019 Net Profit 2019 Average Net Profit
D.R. Horton 56,975 $17.593B $1.618B 9.09%
Lennar Corp 51,491 $22.26B $1.85B 8.31%
Pulte Group 23,232 $9.916B $1.02B 10.25%
NVR 19,668 $7.245B $880M 12.11%
This website has many articles within the Construction Industry standards section explaining the respective margins, mark-ups and expected net profits for the various residential contractors including new home, remodeling, restoration and trades. This site includes information pertaining to:
- Estimating – proper methods, procedures and tricks;
- Mark-up and Margin – learn and understand the difference and the best formula for your company;
- Policies – policies that work and how to implement the corresponding procedures;
- Accounting – provides best accounting systems and addresses methods used in the construction industry;
- Job Costing – information about different tools and systems to record job costing;
- Evaluation – learn how to evaluate results and implement lessons learned.
If you want additonal information, go to the construction industry section of this website and read the material that best aligns with your information request. Act on Knowledge.