We have been looking at buying our first investment property recently and then we thought of house and land package which has eventually trigged an idea of building ourselves (Owner Builder).
I have always had passion for building something. My first home (which was built when I was single) was a custom built and I was heavily involved in it and learned a lot. Now, my wife too has a passion towards building.
We are thinking of building our first investment property solely for learning reasons.
1) We are aware that we won’t be saving as much as a builder but we think we should at least be able to save 20k.
2) This 20K should just be enough to cover our loss of wages hence bringing savings to $0.
Having said that, saving is not our primary goal, learning is. We want to carry this learning forward and eventually become licensed residential builder.
My wife is only on 33k/annum at the moment and we have been looking at a career change for her. I am full time rostered employee and get lot of time off, sometimes as much as 1 week in between shifts. When I am unable to be on site, my wife will be.
Along with sorting owner builder process legalities, my wife will enrol into licensed residential builder course. By the time she finishes her course she will also have some practical experience and be able to subcontract a licensed builder for 2 years’ experience which is requirement for a building license. Once she has got her license and business pickups, I will quit my job and jump into it.
In regards to our owner build, to keep it least stressful and to avoid a poor quality build:
1) I am thinking subcontracting the work to different reputable companies, backed up by warranties and liabilities (arising from poor workmanship) rather than tradies on gumtree.
2) Since for some of the trades we are unable to access the quality ourselves, I am thinking of hiring a reputable building surveyor to inspect our build throughout. Payments will be made to subcontracting companies after getting OK from the building surveyor and after fixes has been done, if required.
3) This might in fact cost us much than going through a big builder, but we would be able to get better quality.
In regards to construction loan, if bank does not lend us much (say 60%) or denies lending us, we can afford the build on our own.
What do you think of this idea? Any things we are missing? Any other concerns we should be aware of?
Another thing that we have in our mind is to build a couple of more houses as an owner builder and sell these? Any legal issues which can arise from that, I believe if do that we are effectively building to sell which law may frown upon, but Mrs has a different opinion.
Also if someone can please shed some light on the process of, How to become a licensed builder?