Owner Builder Quality and Cost
Understanding Quality and Cost
Over the last couple of months, some of our owner builder course students have expressed a concern over the cost of their owner builder projects when considered against an expected per square meter rate.
There are so many variables that affect your build cost including quality of finishes, fixtures and fitments.
But as an owner builder you need to look at the other factors that may affect your build cost.
Building on a steeply sloping site for example will often require innovative design that enhances the usage of the site or allows for unique and interesting features. This normally comes at an increased cost.
Site access is also an area that is often overlooked when establishing your construction budget. To take this to the extreme, imagine the additional costs associated with having to barge every item and all materials to your site if you are building on an island. Site access or lack there of can require the use of specialist equipment or worse still the manual handling of all loads and excavated materials.
In many cases, we find the cost overruns occur in the preliminaries stages where unique or non standard design or construction techniques are required.
Additional footing complexity due to the adequacy of site founding materials are just one example where additional engineering works and certifications may be necessary. Temporary services may be difficult to establish and traffic management both pedestrian and vehicular may require extra manhours or resourcing as may erosion control, dewatering or sediment and environmental factors.
Other than these preliminary and design considerations, prime cost allowances need to be understood and identified or at least quantified when producing your budget estimates.
Floor tiles as an example can be sourced at rates as low as 20 dollars a square meter or can cost as mush as 250 per sq meter. So when an owner builder student tells me they are spending more than 1200 per square meter for a building of standard design and construction with 'standard quality finishes', I start to look at their quality expectations.
There is always a reason that building costs are greater than anticipated.
First question to ask is were they realistic to start with?
If they were, then look at where you have not been disciplined enough in selecting contractors or materials and where you have paid too much.
Learn from these experiences and always try to buy well.
If you have seriously overrun your budget, look for potential savings in the remaining works and the level of finishes and fixtures.
The good news is, unless you have very seriously overcapitalised on you project or over extended yourself financially, quality is good and will enhance the value and liveability of the dwelling.
I hope this answers some of the questions our owner builder course students have or at least gives you a little direction.
I look forward to the comments and the discussion that this post will ultimately generate.
An important consideration in costing your project is the Local Council requirement that you submit a valuation of work for the calculation of fees.I recently discovered that my carefully constructed budget was rejected as too low and I was basically told to use a per square metre figure of around $1400.I ultimately accepted the Council approach rather than delay my project-but when you plan to do a lot of the work yourself, and in retirement the opportunity cost of your time is low, then it seems a bit unfair and leads to higher fees. I guess in the end I will keep a detailed record and will only then know who was right
Most council value your project on the Market value or the contracted price ,as an owner builder you cannot contract your self ,so hench forf they will value on market price which most calculate at square metre rate
I agree with Tom's comment about the local council's estimation of costs. I guess they have to have a cross-the-board standard or it gets a bit messy. My project is under $40,000 so they did not request a breakdown. I agree that retirement is a good time, but there does not seem to be too many pensioner discounts with building fees. Pity.
Thanks for this informative blog! I really agree that "unless you have very seriously overcapitalised on you project or over extended yourself financially, quality is good and will enhance the value and liveability of the dwelling." Much appreciated.
We found out the hard way that scaffolding costs ALOT! Our builder put an allowance of $3000 into our contract. One day, he told us the cost would be $20,000 OVER the allowance. Word of advice...always check allowance items and what the likelihood of them being over or under is
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Rick Heaton is a Building and Construction Industry professional with formal tertiary qualifications in management and training.