Is being an owner builder worth it?

Not quite 1/2 km.

A common occurrence though. I have heard of cases where footings have taken an extra 10m3 of concrete. Not a cheap exercise in itself but ripping out a concrete filled sewer was another story.

Yep thats it - a lot of concrete went into the sewer so the sewer was gonskis.
 
Easily alleviated by sourcing multiple quotes for both trades and materials, and possibly asking the trades to supply the materials so as you get their trade discounts.
Even better if you know people in most of the required trades.

correct. if you have a few mates around the place, a few contacts here and there, scrounge a few bargains, then you are set.
 
I understand it is too hard if you need finance, however if you have cash you can slice off up to approx. 40% of the build price. tho it can be stressful and time consuming.


40%? So you think a big project builder would make $96k on a $235k Build? don't think so.

At that end of the scale the price is more like 10% and if you owner built it you most likely don't have the buying power to get good enough pricing to save that 10% anyway. I can tell you 1 off jobs for owner builders are more expensive than normal. Most of my trades won't work for owner builders anymore because they usually take a very long time to finish the projects, the trades get screwed because the owner doesn't have a proper understanding of how it works and they expect people to do things that aren't their job and they expect a lot from them (because they know very little) and want to pay very little.

Tim
 
had a meeting to pitch some business with the head of one of Perth's biggest volume builders a few years back. Two things I clearly recall, margin 30%+, single level houses "build themselves".

If you go to custom build it's a whole new level of stuffing the quote with contingencies
 
maybe different over there but i doubt it to be that much..

Over here I know how much some of the big guys pay for major materials and i know how much some of them pay for their trades and the difference doesn't equate to that...

But if someone thinks they can owner build a house and save 40% then go for it. I just wouldn't want them to think that and then find out it has actually cost them more that what they could have got it built for.
 
maybe different over there but i doubt it to be that much..

Over here I know how much some of the big guys pay for major materials and i know how much some of them pay for their trades and the difference doesn't equate to that...

But if someone thinks they can owner build a house and save 40% then go for it. I just wouldn't want them to think that and then find out it has actually cost them more that what they could have got it built for.

yeh well they are very big and it becomes a sausage factory I am sure

lower down on the scale, I really don't know, keep hearing differing stories about it all. my latest conclusion was that there would be a saving, but perhaps I need to do it to see it. It would suck to go to all that effort then not save anything!
 
An old school friend I recently caught up with had only just completed construction of his PPOR as an owner builder. He told me that he had initially received quotes around the $600k mark (40 square home) but they brought it in at $480k so a 20% saving, which is widely understood to be the builders margin approximately.
He did things like flooring, framing, roof with a carpenter friend and hung plaster and painted with help from friends/family and contracted more specialty trades ie. plumber, sparky, tiler etc.

He did go on to say that it got pretty stressful and put a strain on his family life as he would finish work and then go to site until late at night and spend every day off there. His advice was to get lots of quotes, get as much detail in your plans as possible (including photos of examples!) so as to minimize confusion with trades and put a lot into planning a time line.
When I asked if he's glad he chose to build himself instead of use a builder he said he was, not just because of the savings but because of the pride he and his wife have living in a house they built.
 
lower down on the scale, I really don't know, keep hearing differing stories about it all. my latest conclusion was that there would be a saving, but perhaps I need to do it to see it. It would suck to go to all that effort then not save anything!
It all depends on how much you know about building and who you know and trust. My mate at work owner built for a good price because he already knew people directly who could do most of the work and also roughly what everything should cost.

If you come in green, it would be very easy to get ripped off. Other issues would be not knowing how to sequence the trades and no clue as to what to do when things go wrong. I think there is an owner builder course in WA.

I have a very good contigent of trades: concreter, tiler, electrician, plumber, carpenter, brilliant brickie. I also have trade contacts for supplies like bricks, roof tiles, floor tiles, carpet, windows, doors etc, that I can get a very good prices.

That said, I'm still using a builder for my next build because I want a project or two under my belt before I consider owner/building. Even then for my main residence next year, I might just use the builder to get me to lockup and then take it from there.

Taking responsibility for everything doesn't appeal to me at this stage.
 
Classic example of penny wise...pound foolish?

Couple of questions?

Have you completed an owner builder course?

Wouldn't a double garage add more value?

If you have not done this before...how sure are you about your costings? What happens if you get it wrong?

Hey everyone,
I've been shopping around with a design for a house to fit my 320sqm block in The Ponds. I was wondering whether it'd be worth managing the project myself?
Got quotes for 215-235 from project home builders.

House is 172sqm big...I have attached the floorplan..

Anyone have any experience being an owner builder? Did it save you a lot of money?

Also, to the brokers out there, how do the banks go with owner builders? Any issues?
 
Classic example of penny wise...pound foolish?

Couple of questions?

Have you completed an owner builder course?

Wouldn't a double garage add more value?

If you have not done this before...how sure are you about your costings? What happens if you get it wrong?

haha

I started this thread to see if it was even worth considering doing it and to see what peoples experiences were and to get more info about what banks think and what other investors think...from there if it seemed even more do-able i'd do an owner builders course.....So far doesn't seem worth it from people i've spoken to in last few days..I'll have to do my own DD obviously but thanks for caring
 
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Definitely worth it...

I've just finished my new PPOR in brisbane as an Owner Builder. I did a lot of the chippie work myself but tendered most of the specialist trades and basically acted as any normal builder would. Sure, I don't have a "team" around me of regular tradies that I use, but the tender process worked well.

I ended up paying $780K odd, and kept an itemised running spreadsheet of every cent into the job. I managed to get some really good prices for each part of the job and now have a pretty good team I could use if I did it again.

The biggest benefit is that you get to keep the usual 20% builder's margin that you would otherwise have to pay to get a builder to do it. And, if you do some of the tradie work yourself too, then you keep that as well. And any markup on materials that builders usually factor into a job, often up to 100%.

I financed as follows:

$90K cash deposit on land (from sale of former PPOR)
$300K resi property loan for balance of land purchase WBC
$250K cash towards the build (from sale of former PPOR)
$140K cash from salary cashflow during the build

So, I didn't need a loan other than the loan for the land purchase. I spoke to my personal banker at WBC and he might have been able to get an OB loan across the line for the $390K construction cost, but I had enough cash and surplus cash flow not to need it.

Its all done now and a local REA just valued it at circa $1.3M with only $300K debt against it for the land loan. Even taking out my $480K cash I put in, that's still a decent bit of equity build.

Ready to go again... :D That one was actually done in my wife's name as OB, the next one will have to be in mine...

Cheers,
Michael

*edit* PS I do know a little bit about building... I strongly agree that you need to know your way around a building site and the sequencing of works before you take on a job like this yourself... *endedit*
 
*edit* PS I do know a little bit about building... I strongly agree that you need to know your way around a building site and the sequencing of works before you take on a job like this yourself... *endedit*

It's a must. If not, you'll definitely be taken for a ride.
 
I once did an OB course with a view to building our PPOR. I learnt enough from the course to know that I couldn't do it. It would have required a lot of time from my job, frequently at very short notice. I would not have been able to keep the job under those sort of conditions.
 
I once did an OB course with a view to building our PPOR. I learnt enough from the course to know that I couldn't do it. It would have required a lot of time from my job, frequently at very short notice. I would not have been able to keep the job under those sort of conditions.

agree that it would require you to be off work, so there is an opportunity cost there. nicer than being stuck in the office tho
 
I didn't take any time off work, but I did forego my weekends for about 2 years running, and my public holidays including Easter, Christmas, you get the idea...

We're 99% done now and we've agreed to down tools for a while and enjoy ourselves a bit again. Its been a lot of hard work for a long time.

And, I reiterate, if you don't know what you're doing then its an absolute minefield. I do have a pretty good grasp on the building game but even got caught out on a couple of elements on this build. For example, the concreter setout and poured our footings and garage slab at the wrong heights. He argued it was the surveyor I engaged who got the RL wrong, but we couldn't prove it either way because the RL was placed on an adjoining property pier which had to be replaced as well so we lost the reference. They put a new RL back on our site on a peg which proved the heights were wrong, but then it became an argument around culpability. Held my build up for 4 months to work through. Next time I'd ensure I did the setout myself, not just the survey, including all the fences and lines and mark the heights on the fences myself.

That's one of a dozen problems I had to solve through the build. I also had to prove you could crane my structural steel in from a hiab placed on the top slab. Original engineering said the slab couldn't handle it which made it impossible to install the structural steel. I had to go and sit with the engineer personally and explain how you could use hardwood bearers to distribute the hiab load over the piering under the slab which could then carry the weight. It worked and we moved on but not before wasting money on a small tracked crane which didn't have the reach despite being told it did. Also held my build up for another few weeks.

Its not easy. You're not just the guy tendering and awarding. You really need to know the BCA inside out and be all over sequencing of works and possible risks inherent in each stage such as the ones above. If you get to the end only to realise you forgot to engage a termite guy to put the ant caps on your slab penetrations before they pour the concrete then you're stuffed! There's 100 of those "must knows" when sequencing works...

Cheers,
Michael.
 
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