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KHB-Zine, Issue #010: Real costs of building
October 03, 2017
Welcome to the October edition of KHB Ezine.
Early PS: if you are reading this on a phone, turn it sideways to enable landscape view, it's easier to read.
People invariably look to kit homes to try to save some money. The kit arrives almost pre-built doesn't it, so it must be cheaper to build? Surely a kit home would also be quicker to build, so this would lower the cost as well? A kit home is about $80-100k, that's a bargain, isn't it? And if I owner built..?
Well all of these beliefs are basically half truths. Kit homes are an efficient way to build, but did you know that builders receive materials in practically the same way that a kit is received? So firstly, don't be distracted by claims from builders who advertise using kits: they all do. There are many misconceptions about kit building costs that I will address in this newsletter. Knowledge is power, right?
Kit home vs pre-fab home
On the other hand, a pre-fab home is completely built off site and is transported, sometimes in a few modules, at once. The provider usually puts it together on site. A pre-fab home will take much longer to build in the factory, but no time to set up on site, and is at least twice as expensive (per square metre) as a kit home.
Advertised kit cost vs purchased kit cost
Kit cost vs established home cost
Why the leap in costs? Add council DA approval fees, site preparation, surveying, fencing, soil tests, construction insurance, slab (plus engineering design) or raised floor, trade-work (plumbing, electrical, waterproofing, plastering, roofing) water tank and pump, kitchen, PC items (vanities, toilets, shower glass, dishwasher, stove, exhaust fan, lights, fans, A/C, wood heater, hot water) solar panels, flooring, landscaping, pathways, garages, driveways and paint. That list is longer if you chose not to take part in any labour such as frame erection, door hanging, architraves and skirts and painting. Are you getting the 25% idea now?
DIY (owner built) vs using a builder
Option 1: As an owner builder, completely self build with only electrical and plumbing trades input
Option 2: Sub out all major tasks: foundations, electrical, plumbing, roofing, linings, cladding, flooring, kitchen, and you just do the finishing
Option 3: As an owner builder, completely sub-contract all building and finishing to a builder
Time to build vs working income
Personally, I always chose option 2 by getting a construction loan with $30k leeway to cover living costs during the build. When it all added up, it turned out an even race between owner building with option 2 and going through a building company, even with lost wages. And I had the adventure of building my own home.
Need a short ebook on owner building? Your big bonus, just for being a subscriber, is personal access to my Free Ebook:
Kit home groundwork: 5 Crucial Steps.
Download your free PDF version HERE and use your personal password khb9632 (lower case letters-expires in 7 days). If you miss out just contact me.
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