Plan your building budget or take the financial pain

Most people will go through life avoiding the idea of building a house simply because of the horror stories they have heard about the pitfalls, stress, frustrations, delays and seemingly-endless negative aspects purportedly experienced by others.

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Contrary to popular belief, building your own home can also be one of the most creative, inspiring and challenging experiences which, when over, will leave you with exactly what you want in a ‘dream’ home, as long as you have the patience, the right mindset and, above all, the type of personality that can deal with the day-to-day activities that building a home brings with it.

The reasons people build are more varied than one would expect. In most cases it is a side effect of having bought a plot at some point in time for ‘investment purposes’ and then, when the timing is right, venturing forth into the world of a ‘home builder’. In other cases, it is simply because after searching endlessly for the right house, you decide that what is available does not suit some or all of your needs, so the next option is to build.

Once you have taken that decision, your choices then become either to build off plan in a development or to embrace the extensive process of engaging an architect and starting what will be one of the most interesting, energy-sapping and relationship-testing journeys of your life. The decision you take is often based on whether you are looking to scale up for a new and growing family or scale down as you head towards retirement and decluttering your life after decades of accumulating ‘stuff’.

When you head down the building road, you will hear many people talk about how much longer their build took than expected, or how difficult it was to manage the liaison with all the different parties involved. Add to that the way-over-budget syndrome which seems to be standard with most builds – and you could be justified in putting the process into reverse and forgetting that it ever started.

They key for this entire activity to be an enjoyable and rewarding one lies in one word – planning. There are so many facets to a build that, unless you are in tune with all of them, slippage can start early on and if it gets out of hand it seldom recovers.

Your planning must start with your budget and no matter what all the experienced builders and architects – and those in the know – say, if you don’t allow for some ‘fat’ or contingency allowance, you will feel the pain no matter what. There are hidden costs everywhere, some of which only raise their heads near the end of your build or are deeply entrenched in what builders and architects call the PC list.

In the normal building context, PC stands for Provisional Cost but what it really means is a wild guestimate of what someone thinks your personal taste in finishes might cost – and that is your first budget awakening moment. When you consider that a builder’s estimate can vary from an architect’s estimate by as much as 300%, make sure you know from the outset what you’re in for.

Gaining an understanding of what your outlay will be – sooner than later – is crucial for you to bring your build in on budget, if such a thing is at all possible… What this really means is that you need to be doing your finishes, groundwork and price investigations very early in the process in order to get a handle on what your costs will be.

While you knew there would be fees from the NHBRC (National Home Builders Registration Council), no one could put a figure to it until the day the builder registered the build. Make sure you have a Valium or a stiff Scotch at hand – not so much because of the costs involved (although that does warrant a sip or five) but more about how they justify the fees they charge for what doesn’t appear to be much work on their part. So be it, you pay because you have no choice.

Don’t underestimate the time it takes to connect your plot to the electricity and water resources because that is key to planning the next steps. Delays become a daily part of the build and no matter what you do, you must factor those into your plan from the outset.
We all know there will be costs for architects, builders, engineers and so forth, but do you fully understand the extent to which the costs mount up before you have even dug a crud of soil?

A wise man will do his homework first and get to as accurate a figure as he can, to know what his budget can cover and how far he can stretch it. But no matter what, a stretch it will be, unless you have unlimited funds.