Browse Forums Owner Builder Forum 1 Apr 02, 2014 2:33 am Hello. I have to make a decision if become builder owner of my home project or hire a professional builder. The assumption is that if I will be a builder owner I could save a lot of money that I'm going to pay for builder. What are the cons and pros that I should know when I make a decision? As part of this question, I heard that if I'm builder owner I cannot sell the house for 7 years. Is it true? Re: builder owner vs professional builder 2Apr 02, 2014 7:12 am wboh, there have been quite a few threads discussing this issue. The below is one: viewtopic.php?f=38&t=65679 I don't think it is the case that you can't sell for seven years but you will be responsible for the structural integrity of the house for at least seven years just like any other builder. Re: builder owner vs professional builder 3Apr 02, 2014 7:41 am Do lots of homework on this subject and have a look at all the threads on being an OB on these forums to see what you will come up against as Liliana suggests. Yes you can save a lot of money but unless you are prepared for a lot of running around, chasing up quotes and being an on site foreman then get a builder to do it for you. In NSW if you are an OB and sell within 7 years ( or is it 6 ? ) of the occupation certificate being granted you have to take out home warranty insurance to cover defects etc. You can still sell it of course as long as the insurance is in place. Stewie Re: builder owner vs professional builder 4Apr 02, 2014 8:23 am Also - do you have the skills to do the job. You'd need to be on top of everything. Re: builder owner vs professional builder 5Apr 21, 2014 7:46 pm I really don't know where people get the ideas from, that they will save lots of money by doing owner builder?? Owner builder will: -Pay more on all materials -Pay more to all sub contractors than what builder pays -Pay extras to subcontractors because many things wont be in their original quote. -Pay more on design and approval -Pay more to rectify defects created by the subcontractors which they selected to save money -Pay more on interest as their project will take twice or even three time longer to complete -Pay more rent if they don't own the house -Loose money if they stop their current job and if they try to do some laboring work themselves. -Loose many weekends and they will work every night to try to organise and schedule the tradies -You will have trouble getting any bank to finance your project, even if you find one they will require you to have at least 40% of your own money. -You will select cheap tradies and end up with poor job, there will be many mistakes during the construction. -Project will cost you at least 30% more then what you estimate at the beginning, then you will have REAL dramas with banks and valuers to give you more money. -Getting final Certificate of Occupancy can be another huge drama, because there is HUGE chance that many things will not comply with the code and inspector wont pass your project, your knowledge of BCA is very limited and you will relay on tradies which have never seen BCA let alone know what the latest code says about their job, and believe me 4 out of 5 tradies is like this. I wont even mention the stress you will go through, every owner builder i spoke to said that they will never ever do it again. I might sound negative, but this is the reality you will be facing, anyone that says that you will save money has not done any real projects before. Builder makes 15-20% profit, but his profit comes out of the savings he received with suppliers and subcontractors, and not from your pocket. You will only save if you have substantial experience in building industry and you can do 70% of work yourself, know the rules well, and you are perfect organizer, can be on site all day every day. But you loose about 50k or more because if you worked full time you would of earned this money elsewhere. Good luck. Re: builder owner vs professional builder 6Apr 21, 2014 10:40 pm From the comments above. Owner builder will: -Pay more on all materials Not Necessarily correct unless your one of the major project builders, smaller builders need to pay for convenience. Owner builder can buy from anywhere and is not limited to one shop. -Pay more to all sub contractors than what builder pays Yes true, however owner builders dont need to pay for admin, payroll, Area manager state manager and other staffs salary that are not directly related to the build. -Pay extras to subcontractors because many things wont be in their original quote. Well if it wasnt quoted it may be fare to pay. If it was then you still need to pay for it. -Pay more on design and approval You could But if you look around you dont need to. Just becuase builders pay less they still put the full price onto the owner. -Pay more to rectify defects created by the subcontractors which they selected to save money Can happen I guess -Pay more on interest as their project will take twice or even three time longer to complete You actually save interest when the project takes longer. Builders build very quick so it means in 6 months time you have a maximum loan, -Pay more rent if they don't own the house This is true. But if you not paying rent your laughing all the way to the bank. -Loose money if they stop their current job and if they try to do some laboring work themselves. Yes this is true you might not loose money but you will be wasting/spending your annual leave. -Loose many weekends and they will work every night to try to organise and schedule the tradies Yes you will -You will have trouble getting any bank to finance your project, even if you find one they will require you to have at least 40% of your own money. Yes only people with good finances can owner build. If you cant organise your finances then you might not have much luck organizing your build the build. -You will select cheap tradies and end up with poor job, there will be many mistakes during the construction. Not necessarily true. Most of the major builders use cheap labour, cheap methods and cheap materials. You only notice it a few years after you move in though. -Project will cost you at least 30% more then what you estimate at the beginning, then you will have REAL dramas with banks and valuers to give you more money. This is possible. Got this a lot from people asking me did I go over the budget waiting me to fail. The truth is I went over about 10%. But this was expected as I gave myself a very strict budget so I didnt over spend on the first half of the build. BUt was more than happy to spend more on the fit off. -Getting final Certificate of Occupancy can be another huge drama, because there is HUGE chance that many things will not comply with the code and inspector wont pass your project, your knowledge of BCA is very limited and you will relay on tradies which have never seen BCA let alone know what the latest code says about their job, and believe me 4 out of 5 tradies is like this. This is not necessarily the case. Are the details are outlined on the plans. When I choose my Surveyour I picked someone who was fussy. In fact when he did my frame inspection he said it was past. I asked him to tell me where the weak points where and fail me on it. I told my carpenter it didnt pass and that he had to fix up a few things. Its my own house So i want it done properly. IN saying that you need to have to want to build your house for more than the money reasons alone as you wont be able ot get out of bed if its just for the money. Also helps to have a flexible job. But you can also gain management experience from building your own house. Re: builder owner vs professional builder 7Apr 22, 2014 12:08 pm Owner Builder or Owner Project Manager? Most people get these two mixed up which creates confusion and creates many of the misconceptions about saving money. Owner builders can save a heap of money. Owner Project Managers will most likely cost themselves a lot of money. Saving money is probably the wrong reason to owner build and is defiantly the wrong reason to Owner Project Manage but it is defiantly possible. It really depends what kind of house you want and what your timeframe is. Time verses Money - one always comes at the expense of the other. To say that you can't/won't save money is totally and absolute rubbish but.... you need to be clear about where the savings are going to come from. As a very experienced owner builder I can say I have saved hundreds of thousands of dollars and those savings have come from labour cost ellimination (doing all the work), serious material cost reductions and by building beyond the ability of commercial builders. I work with numerous owner builders doing a range of projects where I live, I have also done numerous owner building projects over a 20 year period for myself, I am a skilled artisan, I can afford the time and have capacity to build without borrowing money. These are common factors on all the various OB project I have been involved with where major savings have been made. Owner building is not for everyone, actually there are very few people cut out for it …..but you can save a lot of money and more importantly you get a unique home that is not a cheap commercial build that will fall apart in less than 25 years. Steve My building project - Hill House viewtopic.php?f=38&t=13537 Who you have in your life is more important than what you have Re: builder owner vs professional builder 8Apr 26, 2014 10:25 pm B Star i had a good lough at your answers, you will go long way, good luck. Steve yes you will save money because you just said that you have 20 years of experience of doing it, you might as well go and get your full builder licence, it only takes few assignments. If you save money, it doesn't mean that everyone can save money, my whole point is to open up eyes to someone that hasn't done this before, this is what they will face. You are telling yourself Steve that you saved money, and you did your research, well done, but i bet if i had a look at the prices you paid and the quality you got i would find 1000 of mistakes that you made on an average project. Im a builder and i have gone through all that long time ago, even after all these years i still make mistakes and loose money, let alone someone that doesn't know weak points in a timber frame. My wife does property valuations for banks, and her company is tired and sick of owner builders, every day she comes home with all these stories how Owner Builder ran out of money and bank doesn't want to lend, and guess what, they all thought that they will save significant amount of money and under estimated, many of them went bankrupt and bank took over, this is reason that big banks don't want to lend to owner builders any more. Every owner builder project that i have seen was not finished on time, went over the budget, and ended up with poor quality. But there are exceptions, I'm sure, but hard to see around. Re: builder owner vs professional builder 9Apr 26, 2014 11:38 pm There is all sorts of owner building There is the owner building of houses that are set up to owner build ie the Pal type ( I don't have any experience of those) For me I went into owner building not expecting to save money but wanting control and a better standard than the normal project builder. We are about 80% through our 300 Sqm extension and then have the Reno to start. Here are my thoughts ......I love owner building but I am very luck that I've owned an accounting practice for the last 17 years and as a consequence have had contact with lots and lots of tradies. I've generally chosen the tradies that make money and we have an ongoing relationship which I think makes a difference. If I wasn't in the position i was in would I owner build? You bet! Not all of our tradies have been clients and what I have generally found is good tradies know good tradies So I guess to wrap up could you owner build a standard project home cheaper than a builder? I think that depends upon your skill base and contacts but as soon as you are outside the square or a home designed for owner builders I think there is hope - anyway just my thoughts good luck <!-- l --><a class="postlink-local" href="https://forum.homeone.com.au/viewtopic.php?t=62083">viewtopic.php?t=62083</a><!-- l --> Re: builder owner vs professional builder 10Apr 27, 2014 10:32 am veseli You are telling yourself Steve that you saved money, and you did your research, well done, but i bet if i had a look at the prices you paid and the quality you got i would find 1000 of mistakes that you made on an average project. Im a builder and i have gone through all that long time ago, even after all these years i still make mistakes and loose money, let alone someone that doesn't know weak points in a timber frame. . Like many OB’s, I am not interested in doing "average projects", anyone can nail gun a prefab pine frame together on a slab and bang a roof on it, slap up some gyprock and cheap tiles. You can teach a monkey to build the 'average' house, finding a monkey is the hardest bit. As pointed out in several of these posts, many OB's do projects that are not conventional, as such ‘conventional’ builders do not have the skill base to build as they just wrote build mediocre structures that will not last 25 years. The training system and experience base of builders in this country dumbs down the average skill level; most average builders are exactly that. If you want a pretty 'average house' then get an average builder to build it and you will get an average result that will cost you above average. I don’t know too many builders that are not making a lot of money; their motivation is not in saving money for the client, real-estate is not a slim margins game unless you are really average at it. It is pretty hard not to save money OB’ing, I am not going to divulge my personal finances on an open forum but suffice to say I have saved a lot of money through owner building my homes. Steve My building project - Hill House viewtopic.php?f=38&t=13537 Who you have in your life is more important than what you have Re: builder owner vs professional builder 11Apr 27, 2014 5:48 pm Owner builder here. Veseli, not everyone is cut out for OB. I did my first one, no overblown budget. No problems with tradies. I'm sure I paid more than builders for materials. However as I upgraded virtually all materials, would going through a builder be cheaper? Not by a long shot, builders put a hefty markup too. (Fortunately I got my rep at Boral to give me bricks at a medium volume builder prices just by mentioning the name of someone I know. I know I paid about 5% more for timber than a small builder). I got a quote from a builder for my custom design townhouse (council restrictions) and the quote came to 30% more than my cost. Sure I took much longer, that's because unlike most builders I waited for the right tradie, rather than the get any tradie who is available at the time. As you said OB is not for everyone. However going through a builder is not for everyone either. I certainly wouldn't trust my hard earned money with a builder to look after my best interest- a high quality job at the lowest price. Sure when I make my millions I'll get a very high end builder to build me an excellent house at twice the price I could OB it- only because I have the money and know they are making a 100% profit. But until I have unlimited funds I'll continue to OB my next house(s). I quite enjoyed it. Maybe my first OB project wasn't perfect, I'm sure my next one will be better. Veseli, can you kindly share your completed projects? I did notice that in 2011, that you yourself posted a topic on this very forum asking what was the price to build a granny flat. I'm sure your first project (granny flat 3 years ago?) wasn't perfect, but just like OB, you gotta start somewhere right? Re: builder owner vs professional builder 12Apr 27, 2014 6:31 pm Veseli, I note from a lot of your previous respones on other threads that you troll these boards offering your services as a builder after trying to talk down owner building and project builders, perhaps you need to declare your vested intrest a little more clearly? Steve My building project - Hill House viewtopic.php?f=38&t=13537 Who you have in your life is more important than what you have Re: builder owner vs professional builder 13Apr 27, 2014 10:50 pm Thanks Veseli I think I have done alright and I dont regret it one bit. Having built my own house I now know how to maintain my house better than most, have a larger house, larger block and smaller loan than most from day one to build it. You sound like you are trying to justify your job, and have confidence issues. If owner builders didnt exist where would to be builders get the experience and confidence to become professional builders. Dont know to many builders that were born with the required skills. Re: builder owner vs professional builder 14Apr 28, 2014 3:10 pm We didn't have the confidence, as to when to do what when more so or time to OB/project manage and so went with a builder. Unfortunately, this builder has proven he is as incompetent or worse than we could possibly have been - at least we would have followed the plans and laws. He is a HIA member too, so not even that is a recommendation! He simply didn't follow the council approved plans just for starters and 5 months on we are out of pocked $25K and all we have is a slab that council will not allow final approval on due to non compliance with the plans and the DCP and they have ordered the builder to remove it. Worse still he is being completely unprofessional and blaming anyone he can but himself and refusing to rectify it. The problem is, you don't know what you don't know. Either way OB or building with a dud builder like ours. If you do go OB (or with a builder even), please get a good building inspector to do inspections along the way - including post earthworks/pre slab which is where our inspector would have said stop work as there is a problem. Most people do not do this one. Experience either way counts for a lot! We should have screamed stop rather than asked nicely only to be blown off why the land levels were the way they were. At the end of the day you trust your builder - he knows what he is doing right? That's why we went with him and not OB/PM. They are his contractors, he gave them the instructions and assume, plans to follow. Had we have done it ourselves as OB/PM and they were our contractors - we would have asked that they build according to plan and this would not have happened - we do know that! Do we wish we had of gone OB/PM - 100% yes! Our worst effort could not have resulted in this mess! To be fair, we do know there are some great builders out there who would have done an awesome job we just picked the wrong one! We have had many assess the slab and quote for rectification which is not possible and they are all completely disgusted and in shock by what he has done. I guess what I am trying to say is that there are a hundred reasons for and against most of which anyone can justify either way. Maybe you should back yourself if you have a bit of common sense and financial intelligence and the time to do it. If you don't then use a builder and choose wisely Re: builder owner vs professional builder 17Apr 28, 2014 11:25 pm Bugger, very sorry to hear that has occured Hope it works out for you. Steve My building project - Hill House viewtopic.php?f=38&t=13537 Who you have in your life is more important than what you have Re: builder owner vs professional builder 19Jul 19, 2014 8:09 pm Having worked with many OB's in my time there are a few observations that I have noted along the way: 1. Owner builders tend to shop around and shop around hard. Some do however I usually add a premium for OB's as usually they require no end more of my time hand holding them thru the project which just doesn't happen with pro's. 2. By far the biggest issue is the lack of knowledge in both technique (how things are done) and regulation etc, not to mention being completely at sea if there is a problem to rectify along the way. If they are lucky they will get good trades but mostly they get stuck in the middle of buck passing with no idea what so ever who is providing good advice and who is just saving their backsides. TBH I'm amazed that DIY home building is still permitted. Re: builder owner vs professional builder 20Jul 21, 2014 1:55 pm RedHotMike Having worked with many OB's in my time ... And in what capacity would that be? RedHotMike I usually add a premium for OB's as usually they require no end more of my time hand holding them thru the project which just doesn't happen with pro's. So you profit from OB's lack of knowledge. Your point is? I actually found i knew more about the local planning laws than all but one of the bloody useless plumbers who came out to quote on my job! RedHotMike By far the biggest issue is the lack of knowledge in both technique (how things are done) and regulation etc, not to mention being completely at sea if there is a problem to rectify along the way. Dont oversell the know-how of the building process. Its not rocket science. A building inspector should be engaged to prevent being "lost at sea". Like I said, not rocket science. RedHotMike If they are lucky they will get good trades but mostly they get stuck in the middle of buck passing with no idea what so ever who is providing good advice and who is just saving their backsides. Well the bolded part of your comment is a fine testament to the licencing systems and work ethics of building tradies in our fine nanny state country, aint it? And yes, I agree with you. But there is the other side of the coin, as pointed out above in nectar's post. RedHotMike TBH I'm amazed that DIY home building is still permitted. Really why? Because you taint everyone with the same lack of tenacity, planning skills, and attention to detail that have plagued the OBers you have dealt with? Or is it because you expect the nanny state to remove all options for people to do their own thing? Please stop insulting people's intelligence. There are a more than a few people on this forum right now doing a full on OB and theres no reason they shouldnt get through it with help from this forum filling in the gaps of any shortcomings of knowledge they might have. they seem to be pretty well on top of it from what I can see. Hi VK, Think it's worth investing time in an Owner Builder course to equip you with basic knowledge on Australian Building Industry and its regulations. Also, I suggest… 11 23023 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 4249 |