... what are the pros and cons of Owner Building vs using a licensed Builder?

Building a home or building can be one of the best things you’ll do. It can also be one of the most difficult and stressful things you’ll ever do as well. So we thought we’d outline what the difference and list the pros and cons.

Each item is a serious investment of your time, money, stress level and sanity.

1.      Organise your finance upfront. Know where you stand so as to alleviate any financial strains which can put pressure on you later. NOTE: No matter how much you think it will cost, it will go over. People always underestimate what it will cost them. So have a back up plan or stash on the side which you can use if you need to in order to keep the project moving forward.

2.      Project manage contractors and subcontractors/ tradespeople. You’ll need to find out when to call tradespeople and to organise them at the right time. This doesn’t sound like a big deal but in what order to you call the engineer, concreter, earthworks, surveyor, soil engineer? And what job do they do and don’t do? These things builders know through experience. That means getting quotes organising the right person at the right time. Getting through Council and govt red tape is a big challenge!

Time manage the project. How many Owner Builders say they’ll be finished in weeks or months, then it takes them 7 years to build? A lot! Most people are busy with life, so building decisions, planning, logistics are done in your spare time. Don’t forget, most owner builders are trying to work and live their life and try to build their home. So things get pushed back and all of a sudden years have gone by. Think of how long it’s taken to get to see us, get your block of land and organise finance. You need to follow people up constantly. So work out a time line and do whatever you can to stick to it. It will change but try to stick to it if you’re to finish it!

3.      Budget and manage costs. Another big myth is that owner building is cheaper than getting a builder. Yes, it definitely can be if you’re organised, run the project on time and to budget. A lot of owner builders fall down in being indecisive which then costs them more money later on. If a builder is on the job, it’s their job to keep costs set to the contracted amount. It’s therefore your job as an owner builder to keep costs to budget. Do a budget, make sure you cover everything and allow for extra (you will miss things). Get quotes, organise your tradespeople so they don’t go over budget and stick as close to the specified amount.

5.      Logistics of buying materials. Research and find the right materials, confirm it’s the right thing, measure out the materials to find out how much you need and if you make a mistake, you’ll be paying for it. Purchase the items and then organise delivery of materials, some items you will have to go to site to get delivery. Then if its large, you may need to move it onto site or out of site for security. Don’t forget, builder’s get trade prices which you may not be eligible for.

6.      Insurances, worker’s comp. You’re responsible for ensuring the workers and yourself are covered under workers compensation, public liability and that the building and land is covered by insurance. You’re also responsible for building warranty should you sell your home within 7 years’ of your final completion certificate. A qualified builder needs to pay this at the beginning of the project to ensure you are covered if they go bankrupt. 

7.   Manage your own stress levels! Believe it or not but this is a serious point. Using a qualified builder reduces your stress levels, but building can be very demanding on your emotions. To owner build, you need to be ‘switched on’, want to learn and know that you will make mistakes (it’s your first time). You need to be able to communicate well with tradespeople and government agencies (govt bureaucracies are enough to drive you batty!), be calm and patient but also proactive and not leave anything to others. You need to be super organised so you know what is going on and to chase things up if need be. Then you have to be responsible and reasonable with everyone you’ll deal with. I’ve seen even the most switched on, organised person in tears because owner building your own home is emotional and things WON’T GO TO PLAN. Certainly don’t build your own home and have a child at the same time and if you’re naturally a stress bean, think again, it may not be for you! 

Once you've evaluated whether you've got what it takes, here are some recent stories we'd like to share with you on some real events which have happened:

#1 - I had $200,000-$250,000 to spend on a renovation. I went to a home designer and they created what we thought fit the budget. Then we got 3 builders to quote on building it. I'd spent $20,000 on the designs and engineer's reports already. The quotes came in 3 times over my budget. We had to re-design the house!

Work with a builder and a designer to design a home to your budget. 

#2 - This couple had an architect draw up their home and create what they wanted. He gave them an estimated cost to build the home. He charged $30,000 for the construction drawings plus a project management fee. Then they got quotes to build the house. It was more than double what the architect had estimated. They had to refinance in order to build it. They Owner Built their home. It was a lot of work. More than what they thought. It was stressful working with tradespeople, getting quotes. Finding out what to do.  It's endless. It took longer to build than they'd estimated. But the finished house is great and they love it. 

This couple were seriously organised. It was one of the most successful owner builder homes I've seen. Even though it went over budget and over time (which they all do), they made it work because they could work on their home full time and run it like a builder would.

#3 - This person is still building their home, 2 years after starting. He had it designed by an architect who also quoted the job. The cost of the house is more than double over the estimate so far. The walls are starting to wash away, the earth walls are not working because the supplier and tradespeople had trouble with their product. The person is working to try and pay for the next stage of their house. So it will take more time before they can save enough money to go to the next stage. It's still not to lock up.

This is not out of the ordinary for Owner Builders. Because they don't have the time to work on the building of their house full time, managing the trades and keeping the job on track, things get out of hand. Plus they don't know what's right and what's not right as they don't have the skills. Rather than save money, they spend more. As the owner builder, it's up to you to supervise the job and get the tradesmen, doing a good job, you need to be on site to make sure it gets done properly.

Summary if you don't have the following, think twice about being an owner builder:

- If you don't have the time to be on site every day to supervise the job. To make sure things are going to plan, are done the right way and if not, to be there

- If you aren't good with people and communication (level headed, not emotional, have a sense of humour, are a good leader and not just a slave driver, are ok with following up tradespeople) or else your tradespeople won't want to do the work for you. You must be practical & open and get along with people. There's a team of people who will build your home, you've got to work with them to achieve the outcome just as a CEO does).

- Organisational skills. You must be seriously organised and able to act, make decisions and are a 'doer'. Have a to do list and able to do timelines. If you're a procrastinator or take a long time to make decisions or need a lot of information before making decisions, it will be a lot harder for you. Yet, you can't be too quick as you need to weigh up the pros and cons of the decision and know the ramifications.

- Have your finances organised and are a realist. It's nice to dream about your dream home. To make it happen owner building, you need finances. Get quotes, do your budget and do it again. You will miss things so have a back up plan.

- Be willing to learn and not be a push over either! Sometimes you have to listen and trust your tradespeople. Other times, you need to keep them on track and give you the results you want. Knowing what is what is what builders do for a living. If you're new to it, you'll be learning as you go which means you'll be paying for the mistakes you make.

- Are naturally a stressful person. Some people stress over what could happen without it happening. If you're like this and owner build, know that you can then be stressed the whole time you're building. Things which need to be done, or could happen or the rain keeps you awake at night, or the finances. Make sure you're in a tight relationship as building can be stressful for any partnership!

- If you're light hearted and have perspective on life, know that things don't go to plan and know that it's not the be all and end all if it doesn't happen the way you want, you'll actually enjoy building!

If you know all of this and still choose to owner build... you will go a long way to having a great owner building experience. We'll try to do everything we can to make it work for you.

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