Hi everyone,
I am considering purchasing a block of land and then getting a house built on it. I just spoke with the builders, which say the house alone will cost about $320k (plus if I buy the block, extra say $160k). I am not exactly sure how a building company works, but it is my understanding and correct me if im wrong, but they contract out a lot of the work and charge you a a premium for doing so….
I was thinking what if I just do the owner builder course, and basically try and contract the people myself for as little as possible. How much savings do people make. and is that what I would have to do, basically do the owner builder course, therefore I would know most of the processes involved and just hire ppl where needed.
I have two friends at work
1. Extension on their house would have cost about $250, but since they are doing the contracting, they are saving about $100k
2. A friend is doing what I am doing, and I think he said his saving is $120k+the place I will be building should I take this option, will be in another state… but I presume I would see similar types of savings, what do you think?
Just one final thing… It is all good and well to do this process myself without a building company, but are their any services that a building company can do which I am not able to do, i.e contracting certain type of ppl etc.
As always very much appreciate everyones help and time for giving their advice and look forward to the responses from people who have experienced similar situations.
Absolute false economy. Unless you are a skilled negotiator, good contracts manager, have the ability to plan & organise trades, have plenty of spare time to supervise/coordinate trades, read plans, solve problems & manage cashflow – you’re dreaming.
Building companies get their price because they have years of training & ongoing relationships with many of the trades.
If your not in the trade + have no exp…..don;t do it. I seen plenty of “uncompleted” houses sitting there for 2-3+ years unfinished due to budget blow out, poor management, Skipping a few important steps ( soil test, engineer report) , Council, contractors fall out etc…
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Also problems in getting finance if owner builder
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Well good to know bout the finance side of things, so thanks.
Anyone actually done owner building themselves and not ‘in the trade’ ? People I work with seem to be saving heaps so just looking to tap into that positivity.
What state are you proposing to build in?
Tools
Your materials alone would probably cost more than then the 15k a franchisee of a large building company might charge to build, as they get bulk buying discounts. you can also use their plans for free, they could have it done in 2 months reducing your holding cost, know all the contacts and get things through council quickly. And most of the good laborers and tradies probably are already working for them at cheaper rates for the consistancy of work and gaurantee of payment.
Hi Joe,
I have to agree with the rest and the day's of owner building are certainly over.
You need allot of time to manage the project and because its your own home you will get even more fussier and the cost will blow out.Plus people or freind's will always say there are saving or there making a killing but you rarely get freinds who will ever say i made a loss or its not worth it.
So always keep a open mind.
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
I have two friends at work
1. Extension on their house would have cost about $250, but since they are doing the contracting, they are saving about $100k
2. A friend is doing what I am doing, and I think he said his saving is $120k+They “are saving” ??? Ask them after they finish.
The builder do not charge premium, they charge for contacts, experience and relationship. I think that if you want to save money eliminating the builder is not the place to start.You can also use Google instead of going to the doctor, but their experience could be useful , don’t you think?
Mosqui
Tools wrote:What state are you proposing to build in?Tools
The state of ‘ignorant bliss’
The state of optimism clearly.
joeandchels wrote:The state of optimism clearly.The rules for owner builders vary from state to state. What I was getting at is if you are building in Victoria and this is not going to be your PPOR then you won't be able to do it. I don't know what course you are thinking of doing but they normally don't teach you anything about building, just the administrative side of things. You really need to have some building knowledge if you want to go down this track or tradies will walk all over you and it will cost you a lot more than you think.
Tools
Tools just to let you know joe has a lot of Building experience.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hey tools I was actually targeting my response at Scott, but thanks.
And no Richard Taylor from Tayloredfinancialsolutions I don’t have any building experience what are you goin on about
Joe,
all I am alluding to is that although outsiders can only see a large gap between retail prices for materials & the finished product, it is the years of skill etc which make up the pricee difference.
We all like to think that what we don't know can't hurt us but ignorance kills. Shortcuts, like a poorly laid out site, unsafe practices, poor oh&S etc are all likely to end up with lost time injuries which may leave you with no protection.
Apologies Joe i have another Joe in Vic who is a client and in the Building industry who is doing an owner build at the moment.
Wont tell you what his wife's name is but it is darn coincidence as it is exactly the same.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I've just completed an owner builder project. Two dwellings, a 4 bed 2 bath home and a detached 2 bedroom granny flat.Was it 'worth it' for us – Yes. Would I do it again (in 7 years
) Yes. Can't wait.I'm not a 'tradie' but have studied interior design and have already renovated 3 prior homes so have a fair level of basic building knowledge. I am also insanely organised. And I had worked with my builder/carpenter on previous projects.
I work in an interior design firm so had access to skilled people which gave me the confidence to do it as well.
Financially yes based on our budgets coming into the build, from 3 builders, we have done it cheaper. But it was also virtually a full time job for me (lucky I was on maternity leave).
So it really depends on your level of experience in the building and project management arena, and the time you have to spend on site EVERYDAY.
I have told friends absolutely NOT to do it as it would be a disaster for them.
Wow. Everyone so negative? The days of owner builder are gone… what a load of crap.
caet wrote:I am also insanely organised.My mum's an extremely meticulous accountant without a full time job. She could be an owner builder.
I am an unorganised university drop out with a few years in the industry. Although I think I could be, I probably shouldn't be an owner builder.
caet wrote:I have told friends absolutely NOT to do it as it would be a disasterIt can turn ugly very fast and potentially rob you of everything. Also even if you get everything right chances are you won't make money the first time. Having said that, the gratification of doing it all yourself would be huge and many people love it.
If you think you might, don't let anyone tell you anything different.Also if you see yourself doing it many times later down the track, that's another reason to go for it. The cost benifit would start to be getting up there then.
The best option would be to get a builder on board (for your first time at least) so you can use their lisence for materials and tradie contact list, but do everything else yourself. Many builders would be more than happy to stick with the hands on stuff, and leave you to do all the running around yourself.
P.S. I'm pretty sure if you're an owner builder you don't even need a license. It's just when you start to do things for others.
Von Krumm wrote:Wow. Everyone so negative? The days of owner builder are gone… what a load of crap.Not negative- cautious.
And none of the post are suggesting owners builders are gone; in fact they are saying it’s good IF your in the trade or have some basic experience, time, good management and don’t get to attached emotionally.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi Mate ,
if you want to make money in property then dont cut corners ,you make money by creating more money not by saving few dollars here and there .When you sell your owner builder home the first question the buyers ask 'Who is the builder?'If the builder is not reputable ,thats where you lose money .but if you want to live in ,then go for it and i can bet that the 'tradies' will look after you .i mean to say Do what you are good at and dont do other peoples job .Cheers
) Yes. Can't wait.
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