Should clients always avoid paper contractors or are there genuine advantages to hiring a paper contractor who is going to sub the vast majority of the work out?
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Just like a normal GC it really depends on the contractor. You can hire bad GC’s & bad paper contractors. Here at Freedom we use a mix of in-house and subcontracted trades. The most important things to look for are Integrity, Communication & Experience. If the paper contractor does not fit the bill then most likely you will have problems with the trades he hires. A good GC or PC will have the integrity and experience to hire the right people for the job, and manage the trades effectively.
The real advantage to hiring a PC is their rates are usually lower than a GC. As always do your homework, before you hire anyone. Check license, reviews, and always get 3+ bids (5+ is better).
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There are pros and cons to this practice. I would check reviews and possibly call past clients as references. Some people will sub out to the cheapest labor they can find in order to keep more profit for themselves. With a PC you should check all subs are duly licensed and properly insured and that the PC pays his subs because if he fails to do so and that person if licensed they bcan put a lien on your house. A good rule of thumb is to pay with joint checks. I think a PC can be more costly because he wants to make his money on top of what his subs are charging to do the job. If you are going to go the route of a PC you may as well hire all the subs yourself and save the mark up cost of the contractor.