Browse Forums Owner Builder Forum 1 Jun 05, 2007 11:27 am Hi All,
I'm interested in your thoughts about owner/building. I was having a chat with someone last weekend who decided they didn't want to spend the money being asked by a large project builder. They decided to build the home themselves, and estimate that the saving will be in the vicinity of $90k. Substantial savings in anyone's language. Obviously you need to have time to organise everything yourself, and you need to keep on top of the tradies yourself. You would also need to arrange your own building insurance, permits, and so on. Anyone in the process of taking this approach? I did something similar years ago, but it was a little different back then. Perry Re: Owner - Builders 2Jun 05, 2007 12:32 pm Do you know how they organised finance?
My main concern would be having the knowledge to recognise poor/incorrect work and have it sorted before it became a big problem later. ie would you recognise a bad slab fault before you put walls on it that would cost a fortune to rectify? Re: Owner - Builders 3Jun 05, 2007 12:34 pm Perry,
I have a friend who did his own design, got a draftsman to draw it up neatly and was then planning to be an owner builder. He got three quotes for each of the trades and fittings prices and totalled up everything. As a sanity check he went to a project builder and asked them how much it would cost to build his custom design house. He had everything detailed with all fittings selected. He found, much to his surprise, that it would cost more for him to be an owner builder than to get a project builder to do his custom design. The question I asked is how. He gave an example of a door handle that he had selected and could get for $30. The builder stated that he could buy them for $11 and would charge him $16, but he was still way on top. Basically, the buying power of a medium to large sized builder is so good that it more than pays for the builder's cut. In my mind, the only reason to be an owner builder is to have more control and accomodate any changes as the building progresses and they become apparent. However, I think it will take longer and cost more. Perry, if you do choose to be an owner builder, do the sanity check and let us know how you go. Cheers, Casa Re: Owner - Builders 4Jun 05, 2007 1:05 pm Thanks Casa.
That's an interesting scenario. I would agree that they buying power of the larger builders is greater, however they don't always pass any savings on. As an example, when I was looking at a project builder a month ago, they wanted to charge an extra $1600 for a hot water service, which is available for $1300. To top it off, they were not prepared to credit the cost of the original hot water service which was included. Another example - a down light for $60. Sure, the price includes the labour for installation - but I'm sure it wouldn't be too hard to do better. I'm planning on having a more in depth chat with the person who says he saved $90k. I know that he spent some time shopping around for various things such as windows etc. Being an owner builder isn't something I'd take on lightly. It's time consuming and stressful - but the advantage is that you have total control. The disadvantage is that you have total control (if you know what I mean). Cheers Perry Re: Owner - Builders 5Jun 05, 2007 1:09 pm Parker,
I have an advantage in that my Dad is a retired builder, and would have the time to run some checks for me to make sure things are up to standard. We all know that having a home built by a large company isn't necessarily a guarantee of quality - however there are some warranty issues which do come in to play. Perry Re: Owner - Builders 6Jun 05, 2007 2:33 pm The cost of extras with a Project Builder is in deed higher than what you can get yourself.
However, the base cost of the house without the upgrades is usually way lower than what you could get otherwise. It's very hard to design and build a two storey home for around 250k mark which yet the project builders manage to do it. Then you add the upgrades and you should still come out better off than doing it yourself. Some extras like timber floors, certain electrical items etc you could do cheaper after handover. IMO, often owner building looks to be a cheaper option but doesn't turn out that way. You only have to get one tradesman who's late or lacks quality and you are up for major delays or worse still rework. Not to mention design costs. From my experience, if you can find a project home where you are happy with the design and the company is flexible with the extras etc, this will prove to be the cheapest for most people. The owner builders who can save are the ones who have built before and who have connections in the industry. Not to mention needing plenty of spare time to do it. Re: Owner - Builders 7Jun 05, 2007 3:01 pm Casa2 Perry, I have a friend who did his own design, got a draftsman to draw it up neatly and was then planning to be an owner builder. He got three quotes for each of the trades and fittings prices and totaled up everything. As a sanity check he went to a project builder and asked them how much it would cost to build his custom design house. He had everything detailed with all fittings selected. He found, much to his surprise, that it would cost more for him to be an owner builder than to get a project builder to do his custom design. The question I asked is how. He gave an example of a door handle that he had selected and could get for $30. The builder stated that he could buy them for $11 and would charge him $16, but he was still way on top. Basically, the buying power of a medium to large sized builder is so good that it more than pays for the builder's cut. In my mind, the only reason to be an owner builder is to have more control and accomodate any changes as the building progresses and they become apparent. However, I think it will take longer and cost more. Perry, if you do choose to be an owner builder, do the sanity check and let us know how you go. Cheers, Casa Casa I have agree with perryr on this one.. When my wife and I build our last house around 2002 with <Company W> I saw no evidence of this 'buying power' you speak of.. Here are some examples.. - Sink: Instead of the one and half tub type, we wanted one big tub and an area for drying.. They quoted us $550 .. When I told them that I could buy the sink we wanted for under $400, they told us that they would not install items we provided, AND we were not allowed to install it ourselves. We took the standard sink. - Kitchen tiles: We opted for nicer tiles than the standard range that came with the deal.. Price in shop of nicer tiles? $65/meter square.. Cost to us from 'Company W'? $65/meter square. In other words, the standard tiles had no value at all.. At least none that was deducted from our price.. Furthermore, where is this buying power you speak of? They still cost $65/meter square. AND they were bigger tiles.. ie: Quicker installation. Wood stained window sills, skirts etc... $3500.. Sure. They had to use different wood. Wood that could be stained.. But you can buy a lot of wood for $3500.. LOTS of wood. Especially the cheap crappy wood they ended up using. Especially if one has this 'buying power' you spoke of. Furthermore, painting/staining much the same thing really. No excuse.. They saw us coming "You want to change the sills and such to stained wood instead of painted MDF?" <Grabs number out of the air> "$3500". Double power points instead of single ones: $60 each. Need I say more? Downlights: Don't even ask. A network cable from one room, to another: (you sitting down?) $650 ! ! ! One cable, crimp, crimp.. done.. Would have taken the dude 20 minutes to run the cable, and about 10 minutes to crimp the cables and put the wall bits on.. $650 I'll be building my next house myself. (and asking a builder mate of mine to help me buy stuff with his 'buying power') Brad Re: Owner - Builders 8Jun 05, 2007 3:07 pm I think project builders have three tiers of pricing.
1) The base price pretty well passes on all the buying power and has minimal profit. They hope you'll like what you see and ask for some upgrades 2) Upgrades (before signing contract) have a higher profit margin since you're at least interested so there's no need to "get you hooked". 3) Variations (after signing contract) are at exorbitant prices. I think before you sign any contract you still have some muscle to get some discounts on the upgrades. You just have to be prepared to walk away and they need to know that. If you do your homework, shop around and get rid of all variations, Prime Cost items and allowances and use some negotiation skills I think you'll come out cheaper with a project builder. Vlad brought up a good point. One mistake and you've blown the budget. Any rework may very well be at your cost, while the builder will cover the cost if you go with a project builder. To me, the only benefit to being an owner builder is that you can delay some decisions to later, can change some things as you go and the satisfaction of saying - I did this. To me, the disadvantages are it will take longer, cost more and cause great stress. Cheers, Casa Re: Owner - Builders 9Jun 05, 2007 6:20 pm I'm not sure what happens in Vic - but in NSW owner builders go to a farce of a 2-day TAFE course to get their "licence" - and if something goes wrong - no 7 yr building warranty as you're an owner builder. Re: Owner - Builders 10Jun 05, 2007 6:32 pm I reckon the project guys design in those (I don't like that ) things to make sure you will make some changes.... They really make their money on the variations. Most builders do. Get you with a low price, then make some money on the changes and fittings.
As for letting you supply your own stuff - No way!!!! It just introduces way to much risk to the project - if I am waiting on you to arrange and pay someone else to supply me - as the overall controller of the project - with some tiles or whatever and it goes pear shape, who will you blame. Overall it would the PM. And anyway - how do I know you did not buy some auction lot that was really a bunch of seconds being dumped because they failed QA testing??? If I was building, (Which I intend to one day) I'd be planning to get it to lock up stage via a reputable builder. Then I plan on finishing it off myself - be that arranging tradies & doing it myself. That way the major risks of foundations, walls etc are done quickly via an expert - in case it rains etc, and once the external walls and roof are on, the rest is not so time dependant or tradie critcal and I can shop around and get things at the rightr price / quality to suit my needs. Re the tafe course, I think that will be almost OZ wide soon. Steve Re: Owner - Builders 11Jun 05, 2007 7:27 pm It seems with BASIX, and final council inspections etc that lock-up stage doesn't really happen any more? Re: Owner - Builders 12Jun 05, 2007 9:57 pm Yak_Chat If I was building, (Which I intend to one day) I'd be planning to get it to lock up stage via a reputable builder. Then I plan on finishing it off myself - be that arranging tradies & doing it myself. That way the major risks of foundations, walls etc are done quickly via an expert - in case it rains etc, and once the external walls and roof are on, the rest is not so time dependant or tradie critcal and I can shop around and get things at the rightr price / quality to suit my needs. I'm undertaking a major owner-builder renovation and that's what I'm planning on doing. Most builders want control from start to finish and are not to keen to leave it at lock up stage due to the 7 year warranty and issues it presents. Even as an OB you still are protected at least in QLD against poor workmanship by going to the building tribunal. And after speaking to friends being through renovations they believe they could do a better job supervising trades and answering questions than a builder who is always off-site doing other jobs. Edit) and at the end of the day if the costs are the same as a project build you at least have a house that has been built to your own specifaction and of a higher build quality. Re: Owner - Builders 13Jun 05, 2007 11:08 pm I (briefly) contemplated the owner builder path but quickly decided it wasn't for me. I work for myself and charge between $80 and $110 an hour. It's much more cost effective for me to pay somebody else to manage the building process for me while I earn the cashola, especially when it would take me twice as long to do everything due to my inexperience. I think it's always important to cost your own time in the calculations ... and also opportunity costs. Personally, I'd prefer to spend time with my family & friends. ( I speak totally in first person here ... my partner was HORRIFIED at the idea of OB ... as far as he's concerned it was never an option!!)
From all of my readings/discussions/musings about owner building, it seems that in addition to at least some building know-how and the stuff the council requires you know (like OHS), you need: To be able to be available at all/odd hours (on site and on the phone) Patience Great communication skills Great negotiation skills Enough personal authority for people to take you seriously Capacity to develop a workplan, constantly revise timelines and renegotiate with all players accordingly Financial management skills Humour Toughness and understanding in equal measure Experience managing a project of some kind ... whether that be the kindergarten fete or a multi-squillion dollar building project Etc ... (I'm sure others will add more!) I guess what I'm saying is that choosing the OB path isn't just about money or quality. I suspect the people who have the most positive outcomes from OB are those who either: - Hole up in the hills and build the thing themselves with their own hands over a period of years - learning valuable skills in the process and enjoying living in something they've made themselves OR - Are very good managers of both people and processes. I'm interested that a lot of people in this discussion seem to see only two paths: big project builder or owner builder. Smaller building companies can't deliver economies of scale on everything (though they still get builders rates), but you can at least avoid some of the pitfalls associated with the corporate operators. BTW Unless something has changed radically in the last few months, in most (all??) states, there is no such thing as a statutory builders warranty to rectify quality issues ... just 'insurance' that is supposed to cover death, insolvency or disappearance of your builder. Of course, some products will have warranties that could be voided if installed by an unqualified person. But owner building isn't code for *******, so that shouldn't be an issue??! Of course, it's always worth trying to set up a warranty period in your contract with any service provider. e. Re: Owner - Builders 14Jun 06, 2007 8:29 am I think to do owner builder you really have to know what your doing. My boy has done a couple of jobs for owner builders and he hates it. Reasons are as most people have no clue. He hates that he is often left doing their work (i.e. organizing the next trade to come in and do something or fix something) so he can finish his own job off. My boy also has alot of pride for his work, so if the bricklayers are out 10mm it makes a difference to the frame and he works really hard to fix other peoples stuff ups that irritates him.
I have spoken to others about owner building and like I told them, unless you know what your doing...don't. In my case, my dad is organizing it all and I just pick what I want. I'll probably be spending almost 500k building it, using the best stuff. (e.g 2pac kitchens x2, all vanities x7, black galaxy granite benchtops = big $$), the mark up by a builder scares me. I also connections thanks to the boy and one of his builders who sees him like a son. That kitchen that I got cost me around 10k cheaper than what all the other kitchen places quoted me as the boy's builder spends over 80k a year on kitchen/vanities a year who was very nice to make a phone call for me and bring my cost right down. Owner builder is great if you know tradies, have connections (e.g te boys good mate has a cousin who works at tradelink, so all plumbing stuff at trade price). Re: Owner - Builders 15Jun 06, 2007 10:31 am Totally agree Minx & Elizabeth.
Nothing worse than someone who does not know what they are doing trying to run a project. PM'ing your own home is not an easy task. I worked with a guy who was a million dollar IT project manager and he took a year off and built his own house and said he would think twice next time. Re your list Elizabeth it's pretty concise and my owner build would be a full time job, ie stop work, build my house, back to work. And yes we must all look at where our expertise is - and use our capacity to earn where it is best used, and that may not be running a building project we are not an expert in. I have a mate who is a environmental soil and erosion consultant who earns big bucks but was doing his own gardens and running out of hours in the day. I said to him, get in a professional, tell them what you want and go earn some bucks. So now his gardens finished, he can enjoy it, and he earnt 4 times on the days the guy he was paying slaved away in his garden. Steve Re: Owner - Builders 16Jun 06, 2007 9:04 pm Thanks to everyone for their input. I also did some research and came up with a few articles:
http://www.homesite.com.au/rebuild-extend/knockdown-rebuild/new-homes-nsw/tips-and-guides/should-you-become-an-owner-builder http://www.buildingcommission.com.au/www/html/284-choosing-to-be-an-owner-builder.asp http://www.consumer.vic.gov.au/CA256EB5000644CE/page/Building+%26+Renovation-Owner-builders?OpenDocument&1=40-Building+%26+Renovation~&2=20-Owner-builders~&3=~ Makes interesting reading. Perry Hi VK, I am now retired however I have stood beside over 300 owner builders in the past 18 years that have successfully built their own homes. First of all a building… 10 22670 Hi all. Anyone know when the $11,000 limit was set in legislation for renovations in QLD? Ive been renovating for 5 years now and this was the limit back then. As we know,… 0 4244 |