Do I have what it takes to build my own project?
We’ve all heard the horror stories about ordinary people like you and me, on how they’ve been ripped off by cowboy builders for thousands of dollars and how people have run out of money and cannot complete their projects. TV programmes based on rescuing people living in half-built houses and enduring severe financial struggle.
Are these stories true or very common? Yes, they are!
Are these horror stories avoidable? You bet ya, they are!
With the right guidance and application, people can enjoy, learn and reap the rewards of building their own project. They can easily avoid all the horror stories they hear from TV, stories they hear from friends or read about on the internet.
Owner building doesn’t mean you have to be hands-on and undertake the physical work of the project yourself. Owner Building also, allows you to take the project managers role. Where you can oversee the entire build from design to completion. Its great, if you have site-specific skills or if you are a qualified tradesman, they will come in extremely handy but it’s not compulsory.
The aim of this post is to assist you in finding out if taking the owner-builder route is the right one for you and hopefully, you’ll be able to understand what the key questions are, that you need to ask yourself, way before you even think to start researching, designing and way before you start building.
In order for you to have a successful & rewarding experience when undertaking your owner builder project, you have to be willing to ascertain a certain skill & mindset.
Such qualities like; being efficient, well organised, systematic, good communication skills, eye for details & in some cases having a reasonable knowledge of building is a good start. But more importantly you have to be committed and you have to be aware what your restraints and obligations are to undertake such a project.
The construction industry is ever evolving. With architecture & design, we see it pushing more and more boundaries than ever before. Health & safety laws are being enforced across all levels of building sites. Building standards & codes have been put in place to help protect all stakeholders. Manufacturers producing new materials and products helping us to be more energy efficient and cost-effective and so on & so on.
All that being said, the construction industry is providing more challenges and giving owners, designers, and builders, certain criteria that need to be satisfied when building a new project.
To gauge whether owner building is right for you, it’s important to analyse yourself to see if you honestly have what it takes and if you’re willing to deliver the project of your dreams, no matter how big or small the project may be. Whether it’s a new home, additional bathroom, new kitchen, home renovation & extension or any other project.
You have to ask yourself a series of questions;
What is my goal?
Is your goal to create more space in an existing home for you and your growing family? Is it to potentially generate wealth by adding value to your property by adding a new bedroom or bathroom? Do you want to smarten your house up before you put it on the market? Or are you designing and building a brand new house to live in for the next 10 or 20 years?
Whatever the goal is, have a plan and execute it efficiently to achieve this. Don’t try to add value to your property and end up blowing your budget on your renovation. Keep your goal at the forefront of your mind when designing, budgeting and building your project.
Am I committed to this?
Commitment to your project is so important, it will dictate the outcome and finish of your project.
If you are not 100% committed it will lead to the project stopping at certain points and not continuously flowing and finishing on time. It will affect your budget as you won’t be on top of everything you need to be on top of.
Especially when it comes to invoices, contracts, payments and if required, loan payments. Not to mention the vibe and negative energy you will give off to subcontractors. If you aren’t committed or passionate why should they be?
If things start to go wrong, your passion and commitment will inevitably help you keep going to the end of the job.
What’s my role in this project?
Are you going to be hands-on, actively working on site? Whether you are undertaking 90% of the works yourself and just have licensed trades such as electricians & plumbers to assist you? Or are you able to help be a general labourer assisting trades?
Lots of people choose to project manage the process which is organising everything to do with the project from design to completion. Some people are more comfortable with hiring a project manager or have an architect or designer manage the process for them. But if you are keen on saving money then undertaking as much of the work yourself will be hugely advantageous if done right.
Do I have time?
Can you work hard for days, nights, weeks on end if needed?
The willingness to work hard is easy to possess when we ask ourselves that question before the hard work actually begins. But once the project is underway and stress levels increase with more time being spent on site whilst trying to juggle everyday life.
Will it be as easy to come to the same answer as to when you first started?
Think about the decision making, the late nights & stress that comes with riding the highs and lows of the project. Design conflicting with practicality. All these factors can occur depending on the size of your project.
Have you got the ability to problem solve and come up with solutions to keep the project moving?
If your hearts not in it, it will cost you money and the project will be a nightmare from the get-go.
Full commitment is paramount to a successful project.
Do I have the money?
Have you managed to get a loan from the bank? Or do you have enough money without needing to borrow? Understanding your loan agreement is very important. Understand how much you owe and when you need to pay this back.
Owner-builder loans work slightly differently to typical mortgage loans. You are often paid in progress payments (instalments). A valuer would assess the stage of works on site and then instruct the lender to release the funds. Owner-builder loans can be tricky to get but they are very much attainable with the right preparation and thought.
Before you start your project make sure you have a written confirmation or certificate for the amount the bank will guarantee to lend you.
What is an Owner builder responsible for?
Owner builders are responsible for the build, coordination of subcontractors, purchasing of materials, site finances and ensuring all work meets Australian standards and that no work is undertaken that your permit does not cover. You will also need to arrange all inspections and to gain the certification of the build.
Your DA & council approval will have certain criteria specific to your project that you will need to satisfy in order to get the occupational certificate.
You will need to have the necessary insurances in place as well as only contracting licensed & insured subcontractors.
You have to ensure your site is a safe working environment for yourself, your subcontractors, site visitors and the general public as far as reasonably practicable. The Work Health and Safety Act 2011 provides you with regulations to follow and implement to provide a safe working environment.
Essential qualities to possess when owner building
There are lots of qualities you need when it comes to Owner Building, whether you build a new house or renovate your existing home. The 6 areas I’ve listed below, are some of the key qualities, that will help any person that’s new in construction succeed with owner building;
Before undertaking your project, I would highly recommend you adopt a “learners mentality” and embrace learning new skills and undertaking challenges. The more knowledge you acquire the easier your project will be.
This doesn’t mean you need to undertake building courses at college, but rather be open to reading books or blogs on the design & building processes. There’s also lots of useful information on youtube with how to’s, design tips etc.
Take a limited interest in design programmes on tv – SPOILER ALERT – projects don’t magically appear finished overnight and I’m guessing you won’t have a village full of people willing to help you out for free!
I personally recommend becoming familiar with the building standards and regulations, as well as the local council requirements. These are compulsory to follow and adhere too depending on the specifics of your project.
Communication often takes place in two ways: Verbal & written communication. This involves face to face conversations on site, phone calls, site meetings or communicating by text, email, sketches, and drawings etc.
Giving clear instructions to subcontractors is important. You need to get your ideas and instructions across to them clearly, so they can understand exactly what you want and what you expect from them.
Even if it’s small things like cleaning up after themselves on site. You all need to be on the same page and communicate effectively.
As a person, you need to be relatively comfortable talking and communicating with people. If this is a problem for you, don’t panic, start slow and gain confidence through picking up the phone and having a chat with different designers, architects, contractors, suppliers that could assist you with your build.
Architects are often a great place to start the process. By discussing your ideas & project specifics to seeing them transformed into a comprehensive design, Would give you confidence and a solid understanding of what you are wanting to achieve when you come to requesting quotations from subcontractors to do your work.
Get comfortable with asking questions!
There’s a common misconception amongst our society that builders & tradesmen are uneducated and intimidating to interact with. In fact, I’d strongly argue that a good builder is well educated and knows how to interact with their customers and generally understands a very complex and difficult industry.
Talking to subcontractors or builders can be daunting and intimidating. You may even feel embarrassed or inadequate but, whatever you ask they have probably heard 100x before.
As I said before, embrace the learning mentality.
Being Organised is a major factor in any project. A must for any project manager or owner builder is that you need to be organised yourself. If you don’t know whats happening and when then no one else will and your project will suffer dramatically. Have the right systems and people in place to make your life easier when building.
To help you be as organised as possible you need to have a system which is built up of templates, drawings, schedules, an understanding of construction processes and a programme.
Give subcontractors as much information to help them to price and then carry out the works. This will help you a tremendous amount through your entire build.
Then there’s the financial and contractual side of the job. Ensuring you manage invoices from subcontractors and suppliers by paying them on time. Records of this need to be kept and you need to keep updating your forecast and costs sheets so you know if you are over, under or on budget.
Along with hundreds of other duties, organising subcontractors, suppliers, and booking engineer inspections is paramount to a successful and well-managed project. Making sure you have ordered materials for when you need them on site. Booking in subcontractors when you need them so your program on the job doesn’t stop and most importantly getting the necessary stages signed off by an engineer which is essential for you to be able to gain an occupation certificate.
Good planning goes hand in hand with good organisation. Planning starts way before you start building on site. Knowing what finishes and designs you want to have and making sure they are available for delivery when you need them is important.
Looking at site access and allowing for any restraints, before construction starts is a necessity. Having the answers to some of the following questions is worthwhile before you start on the site:
- Will material deliveries be easy to unload?
- Where can you safely store materials on site?
- How are you removing rubbish from the site? Is there any room for a skip bin?
- What is surrounding your site?
- And what are the ground conditions? Are just some of the aspects you need to look at before starting.
Thinking ahead is a great skill to have as an owner builder & project manager. Forward planning takes into account things that will come up in the future.
I recommend thinking 4-6 weeks ahead of time to ensure you can get materials and subcontractors ready to go. This timeframe would also give you enough time to solve any problems encountered when on site and give you the best chance to avoid delays, which in turn, costs money.
You will face so many challenges with your build that you will inevitably question your ability to perform the tasks needed. The tendency to think the whole project is spiralling out of control when something goes wrong or has been delayed is natural. But if your confident in the systems and processes that you have in place for your project then there is no need to panic.
Be confident that you are working smart and that you have thought of different scenarios that could play out.
The confidence you will have on this project will be backed up by your careful and thorough planning and early decision making. If there is an aspect of the job which leaves you not knowing what to do or how to progress, seek help from an expert in relation to the task at hand.
If you need to know if a wall is load bearing or not ask an engineer. If you need advice on site boundaries or baselines & setting out, ask a surveyor.
Building relationships with engineers, contractors, and design consultants develop trust and the belief that everyone has your best interests in mind.
Cash is king! And knowing when you need to pay your Subcontractors and suppliers is crucial to keeping your project progressing.
A crucial part to this is knowing when you are going to receive your next payment from the bank. This enables you to then organise what you need to pay and at what stage.
Knowing your cash flow to the project will also help you plan your program. If you need to put down any deposits or need to pay for materials that have long lead times, you have to know if the money is available in order to pay the bills.
A way to hold on to your cash for longer and still keep work on site moving would be to negotiate 30-day payment terms to each of your subcontractors in their contracts. I recommend to try and stay away from 7-day payment terms if you can help it. This will also assist with any potential defects that may occur and give you more leverage to get the contractor back, once they have left the site.
You should pay contractors on milestones and not on a percentage completion baed rate. For example, if your electrician was required in his SOW to install all light fittings in the house, then once all these items are completed request the invoices for this and pay in full. Don’t pay him in full if he still needs to fit the lights in the bathroom or if he is waiting for the stock to come in to finish the job.
If you’re thinking of Owner Building remember it can be highly rewarding for a variety of reasons.
The decision on undertaking a new project (large or small) and becoming an owner builder is a big one to make and serious consideration should be made.
I’d love to hear from you! Leave a comment below or subscribe to my mailing list and let me know what kind of projects you are planning to do? And what the biggest challenges, that you have to overcome.