very cheap granny flat builder - should i be worried?

[Newbieatlife]

Hi Guys,

Recently ive been getting a billion quotes to get my 2 bedroom granny flat built...

due to the nature of my property, most builders ive been getting quotes around the 100k mark to 120k mark for a slab + weatherboard + colorbond roof + tiled and painted, kitchen bathroom, lights, kitchen appliances etc....basically turnkey with all services connected...

recently a real estate agent recommended a project manager who has quoted only 75k for the build. i met the guy, went to his house, did all the fair trading checks against his license which came back clean, full home warranty insurance etc....

got a couple of past jobs he done...contacted them...all was more than happy.... he also does a lot of council/govt jobs and townhouses here and there...

anyway, getting close to contract stage....is there anything i should be weary about?anything else i could check?

keen on getting some thoughts from the experienced.

Thanks

 

[Aaron_C]

Most critical thing is making sure that he complies with the building codes etc. Are you financing it through a bank? They usually have a QS who will keep an eye on the builder (very limited though). Alternatively you can engage an independent building surveyor to make sure everything is done in accordance with the BCA.

 

[devank]

That is 25% less! I would care less as long as they meet standards and regulations!

Also make sure you are comparing apples vs apples!

 

[Scott No Mates]

Is it a fixed price or a budget/cost plus?

 

[petalop]

Make sure all BSA insurances are in place. Sit down with the builder and go through the stages of the build, to make sure you are comfortable with his responses on the timing and order of the process. Cheaper is not always nastier. There's a lot of competition for work, and not every builder has the same software that allows them to give the same quote.

 

[Propertunity]

Actually the thought that occured to me, was that $75K was at the top end of a reasonable price and the $100-120K prices you obtained were builders just trying to cash in on the granny flat construction boom.

 

[Cloudedhouse]

$100K mark I expect Brick / Tile and decent fittings.

 

[Propertunity]

$100K mark I expect Brick / Tile and decent fittings.

Yes, exactly.

 

[Nathan]

I know people who can do 2 bedroom for $65,000.

 

[Cloudedhouse]

Nathan,

Constructed with what materials?

Is that a special rate for you?

 

[Nathan]

It is cladded property spec builder.

It may be $5k more than this, but they don't need to be expensive....

 

[Dylan33]

Birch and Trump! Is this the new Investment partnership taking the world by storm? Lol.

 

[maza]

Hi Guys,

Recently ive been getting a billion quotes to get my 2 bedroom granny flat built...

due to the nature of my property, most builders ive been getting quotes around the 100k mark to 120k mark for a slab + weatherboard + colorbond roof + tiled and painted, kitchen bathroom, lights, kitchen appliances etc....basically turnkey with all services connected...

recently a real estate agent recommended a project manager who has quoted only 75k for the build. i met the guy, went to his house, did all the fair trading checks against his license which came back clean, full home warranty insurance etc....

got a couple of past jobs he done...contacted them...all was more than happy.... he also does a lot of council/govt jobs and townhouses here and there...

anyway, getting close to contract stage....is there anything i should be weary about?anything else i could check?

keen on getting some thoughts from the experienced.

Thanks

doesnt seem like a massive project, you dont want to try organise and build it yourself?

Have you got DA or engineering plans for the granny flat?

 

[brazen]

Actually the thought that occured to me, was that $75K was at the top end of a reasonable price and the $100-120K prices you obtained were builders just trying to cash in on the granny flat construction boom.

Ive got 2 builders that will do a 2 bedroom granny flat for just $68,000 including approval, connection to all services and cleanup etc. These are 45 sq m granny flats with a low-pitched roof. The materials are as cheap as possible to keep the costs down.

Ive got other builders who will build a 2.5 br brick-veneer with a 22 degree tiled roof, 600mm eaves, on concrete slab, granite benches and all of the above services + top-quality items for around $110,000.

Both are good. Both will get rental income.
The point is, what's you're budget?

There's an argument to be made here that a 'cheaper' granny flat wont necessarily mean much less in rental return; if any. The clients who build the former 'type' don't really see much less rental income from what I've seen.

Ive now also seen over 120 clients go through the entire granny flat build process and their expectations do vary quite a lot. For some people, it's not easy to remain objective and that's totally understandable; so we help them make informed decisions about location, orientation (design) and materials choices to maximise their profits.

Profit is why our investors are building granny flats. We must keep that in mind as we talk about their design and build choices. We are paid to get the approval as cheaply and efficiently as possible and to get the granny flat built as cost-effectively as possible.

That's why we send the approved plans (including the BASIX commitments) to 4-5 builders who independently quote for the building contract. This keeps them honest whilst at the same time ensures the lowest possible price for the investor. We also encourage people to get their own quotes and to check the builders previous work etc. They often show us these quotes so we can help them compare.

We've probably done half a dozen or so for people who are regulars in this forum, maybe more. They have all been quite happy with our approach- there are no salespeople here. We are just about maximising profits for our clients.

We don't make a cent from the build. We work more as a co-op where we share information across the entire industry so that our clients (mostly investors) can get the best deals.

I've personally rejected as many clients as I have agreed to work with. There's a reason why this is so.

Bottom line- shop around. Ask lots of questions and make sure quotes include EVERYTHING (design, approval, build to turnkey, including BASIX commitments).

I hope this helps clarify the design/approval/ build costs a little more.
EDIT: I've personally been contributing and providing advice on somersoft for a year or so and have never advertised my service. So this is a first.

I hope it's not against the rules. If it is, please delete it.

 

[devank]

EDIT: I've personally been contributing and providing advice on somersoft for a year or so and have never advertised my service. So this is a first.

I learnt about granny flat stuff more from you than all other sources combined!

 

[INVSTOR]

There's an argument to be made here that a 'cheaper' granny flat wont necessarily mean much less in rental return; if any. The clients who build the former 'type' don't really see much less rental income from what I've seen.

Ive now also seen over 120 clients go through the entire granny flat build process and their expectations do vary quite a lot. For some people, it's not easy to remain objective and that's totally understandable; so we help them make informed decisions about location, orientation (design) and materials choices to maximise their profits.

Profit is why our investors are building granny flats. We must keep that in mind as we talk about their design and build choices. We are paid to get the approval as cheaply and efficiently as possible and to get the granny flat built as cost-effectively as possible.

Thanks for your info you have provided on Granny Flats. Do you usually go to the site or go by surveys to help with decisions about orientation, location, designs etc?

 

[Ed Barton]

We don't make a cent from the build. We work more as a co-op where we share information across the entire industry so that our clients (mostly investors) can get the best deals.

i only skim your posts as i'm not in NSW.

where do you make money from? (don't deny anyone a profit for a service, just wondering)

I hope this helps clarify the design/approval/ build costs a little more.
EDIT: I've personally been contributing and providing advice on somersoft for a year or so and have never advertised my service. So this is a first.

I hope it's not against the rules. If it is, please delete it.

personally I've never seen your posts as anything more than informational, certainly not advertising.

 

[Piston Broke]

I'd say around 70-75k for a quick efficient and basic build, which is pretty much what is required for most and will give the best ROI.

 

[brazen]

i only skim your posts as i'm not in NSW.

where do you make money from? (don't deny anyone a profit for a service, just wondering)
personally I've never seen your posts as anything more than informational, certainly not advertising.

Thanks EB and others We make our money from the surveying/designing/approval & making sure the project runs smoothly.

A granny flat design and aplication package will normally cost about this:
$2,500 Draftsman
$300 BASIX Assesment
$1,200 Survey
$1,300+ Hydraulic Engineer
$1,200 Structural Engineer
TOTAL: $6,500

We do all of that^^ for around half the price. We also keep the thing running smoothly.
Check out our website. The pricing is there for all to see.

The Private Certifier's fee is about $2,000 for the construction 'critical stage' inspections, payment of the Builder's Long Service Levy, the Sewer Approval, Council's notification/archiving fees and for the Final Occupation Certificate.

Now, the thing that REALLY (REALLY) sucks is when a 'certain few' Council's are STILL charging their ridiculous 'Section 94 Contributions Fees'.

Ive got another thread in somersoft that lists these ridiculous Council fees by Council (as we've come across them):
http://www.somersoft.com/forums/showthread.php?t=59921

Some Councils have revoked the fees, for example Byron Bay used to charge something like $25,000!! for a 2br granny flat, now it's NIL. Gosford have also waived the fee. Most Councils don't charge the fee if the cost of works is under $100,000.

Councils who I know for sure charge them (even if the cost of works is <$100k) include:
Blacktown: Aprpox $4,500 for 2 bedrooms
Cessnock: Approx $4,000 for 2 bedrooms
Lake Macquarie: $10,500 for 2 bedrooms
Ryde $6400 regardless of the size.



I know there's a few more but the levy documents are quite dynamic and change from time to time- which only makes it even more difficult to keep track of. I mean, some of these Councils have appointed new staff positions entitled 'Section 94 Contributions Officer' just to catch jobs done through private certifiers, and make sure the Owner gets charged this fee.

It's a travesty and it should NOT be allowed.

Ridiculous, yet there's nothing anyone can do to stop it. Council's are immune and effectively given free reigh to charge whatever they like, despite publicised objections by the Dept. of Planning and various members of State Parliament. The Dept Of Councils (through the Local Govt Act) is immune to any other agency's intervention. Im no lawyer but I speak to the Department of Planning regularly enough to know they're just as frustrated as I am!

They call it the 'Affordable Rental Housing SEPP' while Council's charge this ridiculous (unaffordable) fee. I suppose it's their way of sticking it up the Dept of Planning for taking DA work away from them via the SEPP? That's just my opinion, and yes, it P$*%^*%es me right off.

I'm passionate about it because it's unjust.
Most of these are not wealthy areas!
Merry Xmas to the Councils I mentioned above.

 

[JWR]

Hi Brazen,

$2,500 Draftsman
$300 BASIX Assesment
$1,200 Survey
$1,300+ Hydraulic Engineer
$1,200 Structural Engineer
TOTAL: $6,500

For the costs above - do you absolutely need them to build a GF?

I will be building one soon but I have no idea about how to do anything other than finding the house (which I've already found) - so I will need to outsource everything.

Assuming I have found a builder, what do the above services achieve and can you go without them if you've already found the house and builder (and it meets the NSW requirements etc...?)

If not I am sure to give you a call soon!