The only times that I have used this method of payment with clients is when work has to start very urgently, or the work is highly unpredictable e.g. a building in very poor condition with lots of hidden problems, or the contractor in question has a very high skill level not available from anyone else. Otherwise it is a better strategy to get a detailed set of specifications and drawings prepared either by the builder or an architect and then obtain a fixed price quotation from the contractor. Cost plus essentially transfers the risk of the project going over budget during the build from the builder to you. Unless you agree something different, it could also leave you with the risk of the project taking longer than expected to complete. So if you are going to take this route, make sure that you have a generous contingency sum in reserve, and that you can deduct money from the payment due to the builder if the project goes over time or budget. It would also be advisable to have a written contract describing how it will all work and how any calculations will be verified.