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  • Building a house - Advice / Options

    Hi Guys,

    I could not find much info on house building, pitfalls, potential problems, time frames, budgeting ,etc, etc.

    Anyone with experience could share some light, suggest reading, websites, books ,etc?

    Some of the questions I have:

    1, mayor pitfalls usually affect budgeting and time frames and the build itself? Its a customized build, 2 flat property (H&I), very steep site, no easy access, so a kitset home or any pre-made solution would not work.
    2, how to estimate time to build? time to deal with council? Wellington council in this case.
    3, how to estimate cost? major costs to factor in? best ways to save on costs?

    Thanks much for any pointers!

  • #2
    Hi mate, my .02c

    1. In the ground work hard to predict. Most builders can price above the ground. It's best to spend time and money estimating as tightly as you can, you'll probably need to provide geotech estimates.

    2. I assume you'll engage a designer/architect in which case they can manage the council process. Also will help you work out access to services and any parking considerations. Builder does the council stuff too.

    3. $2.5K per sqm + in the ground costs above and beyond a flat site is what I've been told to use.

    Where is the property? The cheapest it's ever going to be to get to optimal rent is when you build it so do your research on what house configuration is best and get the right # of bedrooms. A 5br / 2ba rental in Newtown is lucrative, not so much in Tawa I would imagine.

    Go for durable over amazing, neutral colours etc...

    Builders will quote "PC sums" (provisional costing) and a common trick is to underdo these numbers. You want as much as possible to be fixed price.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

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    • #3
      my 0.2c if you have a difficult site you will find the builders will load up the pricing to cover themselves from unforseen costs. No one wants to work for less than they are worth or for no profit. A better optionn imo would be to negotiate a lower charge up rate. Its win win as the builder eliminates the risk of cost blow outs and has gauranteed cashflow and you dont pay the premium for having peace of mind of a fixed price. As long as you choose a the right builder you should come out better off. Look for a smallish company with an owner operator, usually these type of companies have a staff of 4-10 and are on the job every day and running 1-2 jobs, get them to the job manage and use their subbies.

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      • #4
        Hi Guys,

        great comments, thanks heaps!

        hey Nick,

        Its in Roseneath, up on the hill, meaning pretty tight access to the site, and the land is also steep, but neighbor has built a 2flat property there, has let out, so doable. We also have a lapsed building consent for a single house (not flats), approved by neighbors, now try to re-model this, keeping the exterior intact, so they can not object it much.

        I was thinking of 2 x 3 bed flats as the site footprint is not too big, each would be about 90-100sqm with decks, parking also an issue, we have parking for only 2 cars, so can not build more than 2 units. The previous owner was quoted $3000/sqm, but it was a few years ago. Also, her plan included lift and posh things, we would rather go for the yield.

        In fact one of the big dilemmas, if a single house would give us better return, those go for $1.5M upwards here, or if 2 units, first option would make less income though, but might be more upside on value, the 2 unit option is more of a yield choice, but less capital value.
        Might be a good idea would be some sort of Home and income option, or easy option to be able to change back to one house? but then you need to compromise on a lot of things, here people expect big and posh kitchen in single houses, not so much posh in units.

        Hey Tomo,

        thanks for the input, lower charge up rate means I basically pay as we go? on a daily or hourly rate kind of scenario?
        How would it affect rising funds? I have read banks prefer the fixed contracts and they release funds based on the milestones on the fixed cost breakdown.

        Also, I need to see some kind of budget in either way, being the first build I take on, I need to know at least the time it would take or the cost at the end, seems both are hard to guestimate.

        Thanks heaps again!
        Last edited by propertybuyingNZ; 04-10-2016, 11:24 AM. Reason: spelling

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