Hi,
I am looking at building my 2nd home (1st home will become an investment) and this will become my 'dream home'.
I am unsure what to be aware of, whether it be hidden fees, landscaping costs, whats included whats not, siteworks etc.
If any in the game can give me a steer, it would be much appreciated!!
Thanks
Chris
make sure that any provisional sums will be sufficient to cover the works eg an allowance of $500 will not get you 2 decent toilets, where possible nominate all of these fittings eg Kohler model XYZ toilet so the builder can price the items.
Hi Chris,
I have just finished building a couple of houses this year.
The main things I have found you need to watch out for are increasing costs, especially where an 'allowance' is quoted. For example one of my houses had an allowance for footings of $10000. The end cost was $25000. This is an extreme example but you should have some extra money put aside or a LOC to cover the extras.
Also, with some lenders you have to pay for things before they release the funds. They will normally release funds to pay the progress payments to the builder, but with others costs after the builder has handed the property over (such as carpets, landscaping, fences etc) they won't release funds until they have a valuation done. This gets a bit tricky when contractors want to be paid on completion, and the bank haven't released the funds to pay them.
Again, leave some extra money available to cover extra costs, variations and pay for contractors while waiting for the bank to pay up.
Cheers.
Hi Chris,
We have built a house. we project managed and i helped the builders a fair bit.
We payed the builders an hourly rate, and got at least 2 qoutes each with the subbies,( you would be amazed the difference in quotes for the same job)
We sourced all our own kitchen, bathroom fittings, carpets etc. same thing get lots of quotes.
Saved a ton of money doing it this way, hard work but we got what we wanted at the price we wanted!!
On a separate note just be careful on your financing.
Remember all you can claim as deductible interest is the current balance on your present home loan.
You are unable to redraw or refinance and all new borrowing will be non deductible.Make sure your Broker is investment orientated and he might have a few suggestions for you.
Enjoy your new home.
Richard Taylor | Australia's leading private lender
Hi,Chris.
Having been a registered Builder for 30 yrs. I would only be an owner builder if you have had previous experience with building and contracts etc. and have enough time to supervise and coordinate the works. Some of the larger volume builders who build in a particular style that would fit with your dream home would be my choice. This can be with a fixed price contract and with a guaranteed completion date. Smaller projects could then be undertaken such as landscaping etc. by yourself. A lot of people can get into trouble when they split contracts as no one is accountable with warranty insurance. I have just priced a two story home with a volume builder to work out the figures on a project and they can build for less than I can even discounting my own time. A contingency sum of 10 % should be allowed for. I hope this is of some help.
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