Becoming an owner-builder: What does it mean, and is it for me?
The definition of an owner-builder is someone who obtains an owner-builder’s certificate from completing an owner-builder’s course (91509NSW), and then uses that certificate to apply to the relevant authority for an owner-builder’s permit. That permit is then used for a construction project to manage trades and suppliers and complete the work as agreed. You may only use an owner-builder’s permit for one project in a period of five years.
If you read some of the various literature out there, a common selling point for becoming an owner-builder is to remove the need for an actual licensed builder. As the homeowner, you can manage the project yourself with your owner-builder’s permit and save yourself 30% or more on the overall cost.
Are these comments true?
The answer is: yes and no. If managed correctly with the right structure, documentation, discipline, and time management skills, you may find you can save yourself something close to the above figure. If a project is poorly managed, then you could quite easily end up spending more than if you had hired a professional to manage the project for you. A professional would also decreaseyour stress levels.
Building is hard, and it takes a lot of skill to manage all of the various designs, approvals, regulations, insurances, trades (quality assurance), and suppliers.If you are “time poor” managing all of this becomes even harder.
The question you need to ask yourself is: Do I have the time to become an owner-builder?You need to be very ruthless when considering this. There are many circumstances that need to be taken into consideration, and one of them is the size of the project.
For a full-time builder or project manager, I use the rule of thumb that for every $80,000 of work that needs to be performed, a time commitment of 4–6 weeks is required (this does not include any of the upfront pre-commencement work; we will touch on these time frames later).
Therefore a $160,000 project could take between 8–12 weeks, and a $240,000 project between 12–18 weeks.
How do you measure up?
The above is not an exact science because other factors will come into play, such as the level of detail and various site constraints, but it is a good gauge to show how long it should take professionals who have good contacts and priority with certain trades and suppliers. If you’re just starting out on your first project as an owner-builder with no real connections then you should factor in more time.
So we come back to the question of time. If you plan on tackling a $300,000+ project, do you have close to 6 months or more of your time that you can seriously invest in your project? I’m not saying that you will need to be onsite eight hours a day (although it would be great if you could), but you should really be there first thing in the morning to kick things off, and again in the afternoon to check on the progress that’s been made. It also helps to make yourselfaccessible on the phone throughout the day if any questions or problems arise.
Don’t be nervous!
If the above sounds like it could be too much work due to time constraints such as a career or family commitments, you can always choose to hire a project manager to help assist you with the day-to-day running of your project. With this option, you are still the owner-builder and have full control of what you want to happen with your project, but you work with one contact person who manages the day-to-day operations in your place.
Now I’m not trying to scare you off from becoming an owner-builder, in fact I encourage it because there is nothing more rewarding than seeing a project from conception through to completion.However I am trying to make you fully aware of what’s involved and how disciplined and organised you will need to be to make your project a successful one. With the right training and advice, I can assist you with the information to get you there.
Below is a link to the Department of Fair Trading NSW.It will provide you a guide to the rules and regulations surrounding becoming an owner-builder.
By now you should have a basic overview of what the term owner-builder means. Let’s move onto the next topic, where you will learn about the requirements to run a successful project.
Do you have an owner builder story you would like to share with us? If so please leave a comment below, or share with someone who you think will value from this article.
Until next time, happy renovating!