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Written by Peter Henderson
Australian Owner Builders Factsheet 44 AOBFS44
“Roughly, within a few cents, maybe I have enough, do you think I could know exactly how much is it to build…per square?”
Invariably the first question I always get asked is a derivative of the above. Roughly translated the question is “How much a square does it cost to build?” My answer, “Build what?” The simple conclusion is always based on the project itself. It all depends on the design and, more importantly, the level of finish required throughout the house.
When you inspect any suburban display centre or estate, the scenario is always the same. Select the house you like, the one that suits your lifestyle, taste and, you think, your budget…….and then sit down and cost it out. It soon comes down to, “Oh you want THAT carpet and THOSE taps! Well that will be an extra $….” The end result is usually a home which now costs $40,000 more than you first thought.
One strategy is to plan ahead. By planning I mean understand the process and do not commit to anything until you are sure you are within your budget. Here are some tips on how to control the process.
Plan to build within your budget
Try not to use display homes as a guide to cost, they always are understated. By the same token, don’t spend thousands of dollars preparing working drawings and engineering reports until you can verify the costs. Ask your architect, designer or draftsperson to prepare a sketch or preliminary plan and then shop around for the finish you want. Take all of the information to an estimator who will cost the project. If the final result comes in too high, simply take the design back to the draftsperson to downscale or reduce the quality of the finish. This way you can ensure the project will be within budget before commissioning any high cost works.
Let the banks know you have done your homework
Banks will not lend to unprepared or ill-equipped renovators or builders. They simply are not in the business of losing money. Presenting a well prepared and presented proposal, a business plan in fact, lets the financier know you are in control of the project. Include a full Bill of Quantities showing the materials and labour rates needed to complete the construction.
Don’t tell the bank that your cousin is a plasterer or painter and will do the job a lot cheaper. The financier will want the costings presented at normal industry rates. Should something go wrong and the project needs to be finished by a tradesman, the money needs to be there to finish the project. Half finished houses don’t sell.
Understand current construction costs
Construction methods and regulations have changed dramatically over the years. It used to be cheaper to build a double storey dwelling, less tiles and trusses, but now there are scaffolding costs, safety rails, harnesses and stair guards, these all add to the cost of construction.
Recent 5 star energy requirements are changing the way we build. More care needs to go into the planning and siting of the home. There may be a need for double glazing or increased insulation, all additional costs.
Understand the cost implications of your proposed construction method and the result of an incorrect design for your particular block of land. Do your homework and get it costed BEFORE you give anyone the go ahead is our advice. …plan ahead… understand the process and do not commit to anything until you are sure you are within your budget.
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