HomeWise.ie
Ireland's Home & Garden Search Engine
   


Seller Signup...

Quality Service, Seller or Tradesperson? Sign Up Now!




Home & Garden Articles


Pros And Cons Of Being An Owner Builder

Fri 27 Apr 2007 - 14:48

Pros And Cons Of Being An Owner Builder
By Dan Calderwood

You may have considered building your own home. You can do this by hiring a general contractor to handle the entire project or you can act as the general contractor by being an owner builder. You can save a lot of money by doing it yourself, but you must remember the extra time, effort and stress involved by doing it yourself.

When a home is built, many different subcontractors to the work and usually the manager is the general contractor (GC). The general contractor is in charge of the entire house and has control of hiring and managing the subcontractors. However, the general contractor can charge a hefty fee which is typically 20% of the value of the home. If you decide to do the management work yourself, that 20% can be equity in the home when the building is finished.

You have several advantages when you are the general contractor. First, you control the project completely. You get to decide what materials to put into the home and you and hire and manage the subcontractors. You can pick the very best and create a quality home that you know is built correctly. Your time and effort is turned into equity when the building is complete. You will have a home that you could immediately sell for a profit on the market if you have completed the project correctly. You can do all of this in your spare time while working a full time job.

Additionally, you can do some of the work yourself if you want to. This allows you to create more equity in the home while it is being built. You may decide that you can paint the inside of the house cheaper than contracting the work. You would not have this option if you were working with a general contractor.

However, being the general contractor does have its negative side also. You must be able to manage and work with a variety of people. You will also have to work with the bank if you are getting a construction loan. All of this is work and can be very time consuming and stressful.

Your first hurdle working as an owner builder will be to secure financing. The bank wants to make sure that their investment is backed by real estate. If you default on the loan they want to be able to foreclose on the property to get their money back. Hence, if you have no experience at general contracting you may find it difficult to get a loan. However, there are ways so you should talk to your bank to find what their requirements are to get a construction loan. Remember, that loans are a service and you may want to shop around to get the best price and deal available.

You will have to work with the city to get building permits before construction. If this is your first project it may seem confusing and time consuming, but as you learn the right contacts things will flow much easier.

Subcontractors can be your biggest headache, if you don't hire the right ones. Get references and do background checks on all of your subs. These contractors will be doing a majority of the work and can make or break the project. You will want to read a book to find the proper timeline for building the house. Draw out your timeline from beginning to end and then stick to it. You will have to hold your subcontractors to the same timeline. If you allow the plumber to get behind, he will delay thee drywall and the timeline will be blown. Remember you are paying interest on the construction loan and the longer it takes to build the home will mean the more expensive it is.

In summary, you can build your own project by being an owner builder. Your main advantage upon completion is that you have instant equity in the project. However, you will have to deal with a lot of people and stress during the project. If you can handle and manage others then you may want to consider this option when finding your next home.

HomeBuildingRemodeling.com is your source for top quality home building, remodeling and home decorating information. For free articles delivered daily by email, visit HomeBuildingRemodeling.com and enter your name and email under the Free Home Building and Remodeling Updates section.

Article Source: http://EzineArticles.com/?expert=Dan_Calderwood
http://EzineArticles.com/?Pros-And-Cons-Of-Being-An-Owner-Builder&id=538038


Looking for information on General Home Improvement, Find a supplier at HomeWise.ie

back to General Home Improvement articles
back to all home & garden articles