8 Truths for Owner-Builders
An owner-builder is a person who decides to take on the role of both owner and builder for a construction project. This means that instead of hiring a general contractor to oversee the project, the owner-builder assumes responsibility for all aspects of the construction process, including hiring subcontractors, obtaining building permits, and managing the budget.
One of the main benefits of being an owner-builder is the potential for cost savings. By taking on the role of the contractor, the owner-builder is able to negotiate directly with subcontractors and suppliers, potentially leading to lower prices for materials and labor. Additionally, the owner-builder may be able to save on overhead costs that would normally be incurred by a general contractor.
However, being an owner-builder also comes with a significant amount of responsibility. It is important for an owner-builder to have a solid understanding of construction practices and be able to manage a team of subcontractors effectively. This includes coordinating schedules, ensuring that all necessary materials are on site, and staying within budget. It is also important for an owner-builder to be well-versed in local building codes and regulations, as any mistakes or violations could result in costly delays or fines.
One important consideration for anyone considering becoming an owner-builder is the availability of insurance. Many insurance companies will not cover a project if the owner is also serving as the builder, so it is important to research coverage options before starting any construction.
Overall, being an owner-builder can be a rewarding experience for those who are willing to take on the added responsibility and are able to handle the various challenges that come with the role. It can also be a way to save money on a construction project, but it is important to fully understand the responsibilities and potential risks before making the decision to take on this role.
As an architect-and-carpenter, husband-and-wife team it seemed inevitable that we would build our own home. As first-home-owners desperate to get out of the rental market we thought this would be a great way to test our skills. We are incredibly proud of what we have achieved but also of what we’ve learnt. Here are a few home truths for anybody considering owner-building.
(Note: We are Melbourne, Australia based so any reference to regulations applies to that jurisdiction)
Everything changes once money is on the table
Once the land was bought the clock started ticking and it didn’t stop until we moved in. We had no option but to pay rent and a mortgage during the entire build which also meant we were both working day-jobs too. That was a great motivator to get up early on weekends and put in full days of labour but it was also stressful.
Budget as though it is a normal build
Owner-builders usually go into it thinking they can make huge savings by cutting out the middle man (the builder). Some can. Some find out half way through that they’ve made mistakes, forgotten to budget for items, or don’t have time to manage it the way they had hoped.
Budgeting for more than you might initially hope for means you have that buffer at the end of the project to either increase speed or buy some new furniture as the finishing touches.
Secure finance first
Many banks are no longer lending to owner-builders and those who are will have very strict requirements. If you need to finance any of the build make sure you talk to your lending institute before anything begins on site – or, ideally before you even buy the land.
You can’t do everything
You need to weigh up the cost of hiring somebody to do the job in half the time vs the value of you being at work. If it will cost a tiler $4,000 to tile your bathrooms and it will cost you 4 weekends and another month of rent, or 8 days off work for a poorer quality outcome. I’m not telling you which to choose but make the decision with your eyes open.
Reminder: Electricians and plumbers are licensed trades in Australia. You legally can’t do those works.
You get what you pay for
When comparing quotes for trades keep in mind that the cheapest quote may be cheap for a reason. If possible, ask to see examples of their work – even if you don’t go see them the fact that they’re proud enough to show it to you is a good sign. Remember, you’re not a builder. You almost certainly won’t be doing this again any time soon, and that means you don’t have the buying power, relationships or leverage of a builder so you may also not be getting their prices.
Make the design decisions early
Nothing throws a spanner in the works (or the budget) quite so much as changing your mind part way through a build. Sometimes it can be a great addition (like our sunken bathtub) and sometimes it can be a regret (like the slightly different grey tiles I spent weeks agonising over). Don’t let the stress of the moment overpower the preparation of yesterday.
Schedule breaks
Building is a long process. If you’re working on the project management every night after work and labouring on site every weekend you will wear out. Schedule a weekend away every 2-3 months somewhere you can’t see the build or ‘just pop in’.
Document the journey
Documenting the process is a great way to create a lasting memory of just how far you’ve come. Even during the build we would look back on our photographs and videos and take stock of what we had achieved.
At the end of the day there were a lot of reasons why we went owner builder but we also have a huge respect for builders. So, before you jump in the deep end here is a quick reminder of what a builders margins covers:
- their insurances
- their fencing, scaffolding, toilets
- their management of the site including making sure that each trade is there when they need to be, do a good job and have the licenses and insurances they need by law
- their admin team dealing with quoting, invoices and variations of each trade and their contract with you
- and yes, profit. Your small builders probably aren't making as much of this as you might think.
Site foreman, project managers and contract administrators all do vital roles in delivering a project. If you're looking to take on a project yourself and the roles of those people, I encourage you to do it with open eyes - with a lot of research - and weigh up the cost-benefit for your personal situation.
*This article is intended as a description of personal experiences only. It does not constitute as advice; architectural, financial, or otherwise. For more information on owner-builders in Victoria, Australia visit https://www.vba.vic.gov.au/owner-builders.
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