Owner Builder - was it worth it?

Hi all,

we are considering going owner builder for a new home to be built in Berry NSW.

We are looking to build a 4 bedroom, 2 living, 3 bath single storey home. All of the project homes that we have liked so far have been in excess of $600k for the home alone - some around $1mil.

Wondering what some of your experiences were with this process, whether you would do it again and if you could provide a price guide for what you spent on your home?

Cheers!

Hi ace91, will you need to finance the house or will it be cash? If you have to take out a loan I very much doubt you will get the finance through anyone, it was hard to get finance for an owner builder before the royal commission and I've heard it's near on impossible now, but your laughing if it is cash.

We will be financing, however, we do own the land outright.

I don't think you will get finance, I would suss that out before you go any further.

So if land is owned outright, you can mortgage out a land and use the land loan to cover house building expenses to the lock up phase or even to the interim occupancy certificate.

It is much easier to obtain a financing for a house which is already locked up or has interim occupancy certificate.

Ace91
I suggest you invest in preliminary Designs, Engineering & Costings
Armed with that Information/data, then decide on what is going to work for you,
The Banking Royal Commission has highlighted the need for Data, Analysis and Proofs for Battlers & Punters.
In the decision making process, gone are the days when you can use a Front elevation coloured Image rendering (Only)
to secure a loan.
Banks have been using data to discriminate on project lending for years, i suggest you beat them at their own game Goodluck

Hi we have met with the bank/mortgage consulant and been advised that we would be fine with obtaining an owner builder loan

My site supervisor says he built his own house and saved a fair amount of cash. But he is a licensed builder with decades of experience, are you?

You don’t need to be a licenced builder with decades of experience to save money as an owner builder. In saying that, I would only suggest doing it if you have heaps of spare time and are building something that’s not a standard cookie cutter Home.

Hi ace91,

Might be resurrecting a dead thread!

It's a question I see come up alot. I've seen owner builder projects go great and also horribly wrong. Typically the ones that go great are by people that have experience in the industry (i.e. a carpenter), but even these types of owner builders have their issues, primarily around the admin side of the build.

Deciding to be an owner/builder is basically deciding.... you're as experienced as someone who is either trade or tertiary qualified, has 4+ years of practical experience and does this day in day out.

I think the biggest problem is the media show this DIY construction thing as being easy, anyone can do it.

What you need to do is weigh up \the pro's and con's of each option, remember it's not always about price.
- I.e. as an owner builder you are as responsible as a builder for upholding the statutory warranties.
- You've got no warranty (defects liability period).
- You need to invest time, ALOT of time.
- You have to have your administration 'on-point (couldn't think of a better word!)
- You will not likely have the buying power of the project home builders.

I am a builder and have completed over 500 projects in my career, the majority renovations. If I was building a house, I'd engage a project home builder to do it for me. Why, it's what they do day in day out, they operate on small margins and churn them out like an assembly line.

A bit of negativity, but now some positivity.

If you decide to do this, decide to do it well. Do alot of research, do the courses, learn how to manage this thing, learn how to control your costs, make sure you contract your works.

Alot in it, but if you are committed, you can do it.

All the best!
Danny

Hi Danny,

I like you reply. I am seriously considering doing an owner builder project for hopefully my final home.
In my case, I have used a custom home builder and a private builder for 5 homes so understand the process reasonably well.
My day job is a project manager within IT, so managing the pipeline and costs doesn't phase me.
To add my builder who happens to be my ex-neighbour and my brother-in-law are builders so I can leverage their trades people and experience.
I do not have on the spot time to supervise however I am thinking this risk can be mitigated using a quality surveyor through each stage.
With the above points in mind would you still exercise your caution as mentioned above, or would you feel there is a lesser risk profile in my individual case?

Thanks
Garry

Well, easiest option - I would simply negotiate with your ex-neighbour or your brother-in-law on a certain margin he gets on top of labor costs for supervising your build and using his trusted his trades on your project. He can use your owner builder license (cheaper) or his building license (more expensive) to build. They can also provide you access to the discounted materials,etc.

Yes thank you valid feedback.

Hi MrChelseaFC,

What Alexp79 says is a good point, if this is an option, this might be the best bet.

As an owner builder there are still several 'hoops' to jump through, one of them being a course your governing body will ask you to complete. If using your neighbour or brother in law is an easy option, this sounds like a good option.

In regards to the QS, I am a QS, and when I was only a QS, I would not have considered my experience enough to supervise construction work. You really need someone who actually understands how things are put together, order of trades, site risks etc/. Unfortunately as a QS you are taught far more on paper than on site.

A builder, or good carpenter may be a better bet. You could potentially pay them an hourly rate to provide some QA for the job.

Hope this helps.

Regards,

Yes thank you it does help. I'll look at options such as using by builders site supervisor. I have time to think this through so will plan approepreiately

My suggestion is.. to be an owner builder, there is only one thing you need to think thru. TIME.
Either you have a lot of time to attend to your own build.. or you don't mind taking a long time to finish the build.
And you will need quite a bit of time to study and plan what you are to do with your house.
One advise is to take your time in the planning process. You will learn a lot while you do your planning and by the end of the planning process, you will understand more on where you will need help when start building.

One extension and one little holiday home as owner builder. Get a plan, either from a TAFE designer or architect for $750-$1,000, get your own soil/footings report ($300) and contours/features ($550) and get up to three quotes for the build. Contact this forum for builders or use the web to get prices."Productreview" is also a web site with four star reviews and one star ("do not use this builder"!) reviews and look at the percentages. One builder topped the charts with 25% being one-star reviews, so a quarter of his customers would not recommend him!

Get your own quote for the earthworks and compaction and access way and compare them to the builder's quotes. That way you can see the 100% mark-up available as a saving for you.

Learn from the mistakes you, the designers and builders make and ask them to correct their mistakes in their plans and quotes. My architect made two major mistakes by not knowing specific R-Code requirements and the builders also differed in their designs.. Compare the specifications of the builders. One builder, e.g., quoted a "meter box" and another quoted a "lockable meter box". As thieves cut the power to cut the cameras, I asked the first builder if his box is lockable, no, extra cost $200! The first builder then forgot the $200, when told other builders quote for lockable boxes.

So you learn that the standard specifications are the bare minimum offering. One builder may ask $500 for a quote and others will do it for free if the jobs are scarce as they are now in WA, after all, from a floor plan and your roof specification, the base build cost can be very quickly estimated for you via software builders have. During the build you will have to try to see the house almost daily as owner builder definitely and less often so with a project builder.

Regardless how you build, you will have to know what you want. Do I want 28course bricks or 31c? Homes used to be built with 31c or about 2670mm high, now builders have dropped the hot ceilings onto your heads with 28c walls. Bricks used to be 4" or 100mm, now they are 90mm. Do you allow the concreter to lift the steel after pouring of the foundation or do you expect the steel to stand on chairs, which is the correct standard? Do you let the builder get away with 85mm slab thickness, which may only be 60mm somewhere or will you insist on 100mm footings, because you have some experience as an owner builder from a course or reading the Internet or talking to trades? Will you insist on anticon with tiled roofs as water will get in and damage the timbers?

Once you select your own trades based on recommendations and quotes, you will constantly have to check the quality of the build and not let a trade or builder promise to fix it and demands to get paid; the web tells me builders cannot be told a progress payment will be held up until what is not according to contract or standards gets fixed, You will be sued. When you hire your own trades, you will not be bound by a HIA/MBA contract, which works in the industries favour, not your own. Such a contract demands you prepay most of the work I found out.

As an estimate, you can save yourself about $30 - $40,000 as an owner builder. This is why industry lobbied our politicians to restrict owner builders. And I hope you do not rent a place too far away from the site.

You can hire a building inspector and one hopes the trades listen to him, especially if they do not get paid until it is fixed, a builder will not have to listen to a building inspector, only to a lawyer and surveyor or engineer combination.

Good luck!