Armchair Builder

Owner Building: Risks vs. Rewards

Owner building isn’t for everyone.  As with anything worth doing in life, there are risks and rewards associated with it.  Having built hundreds of homes for other people, while also being an advocate for owner building, I’m a reasonably good candidate to give you the major good and bad points to think about when deciding whether or not to take on a building project yourself.

Let’s start with the RISKS of owner building.  As the owner builder, you…

  • have ultimate responsibility for the overall success of the project (including budget, quality, schedule & post move-in repairs)
  • assume liability for the jobsite and everyone that enters
  • will be responsible for subcontractor relations and contracts
  • will have overall decision making responsibility for the project
REWARDS of owner building.  As an owner builder, you…
  • have complete control… which means you get exactly what you want. (design, location, start date…etc)
  • can save  10-30% (on general contractor fees, by doing some work yourself, and by taking the time to shop for the best prices on materials)
  • will get a huge sense of pride.  The home you create will last for generations…and it will be created by you!
When you are nervous about doing something it can be beneficial to look at the worst case scenarios.  You analyze the worst possible outcomes and then determine what would need to be done to get past it.  In this way, you can decide whether to go for it or put on the brakes.  Below we have listed a couple worst case scenarios for owner building.
  • Your quality inspections are deficient and you end up with problems with your home.  The Fix:  Perform daily inspections on site (either by you or a consultant).  Keep in mind…any problem with a home can be fixed.
  • Someone gets hurt on the jobsite.  The Fix:  You will have an attorney review your subcontract to make sure you are covered for injured workers and you will carry general liability insurance for overall coverage.
  • Construction takes longer than you thought.  The Fix:  With proper scheduling and planning you should finish on time.  But if you still go over, have a backup plan for living arrangements.
  • A Subcontractor doesn’t show up.  The Fix:  If you can’t get the trade to show up…Pull one of your backup bids and replace the guilty party (after signing a complete contract and getting insurance from them as always)
  • You go over budget:  We always keep a margin of safety in our budget for this scenario.  But if you still go over, you can adjust specifications and the schedule to accommodate.  How about finishing your landscaping in phases rather than completing it all up front?  Or maybe you can finish your basement later after saving more cash.
All of these are possible worst case scenarios when owner building.  In fact, all of these scenarios are possible even if you go with a general contractor to build your home.  Keep in mind…all of these worst case outcomes can be fixed…I know because I have dealt with each of them several times in my career as a builder.  And at some point in time, each of them was a first for me.
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Can you think of other risks or rewards associated with owner building?  After hearing the facts, do you think you are a candidate to build your own project?  Let us know your thoughts.  For more information about owner building and how to avoid the worst case scenarios, check out our free videos at our main site under the tab Build My Own Home.

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3 Comments for Owner Building: Risks vs. Rewards

Building Your Own Home: What is the Liability?- Armchair Builder :: Blog :: Build, renovate, & repair your own home. Save money as an owner-builder. | March 21, 2012 at 8:30 am

[...] a recent post, Owner Building: Risks vs. Rewards, we talked about the specific risks you’re exposed to when building your own home.  One of [...]

Owner Building: What Are the Savings Really?- Armchair Builder :: Blog :: Build, renovate, & repair your own home. Save money as an owner-builder. | April 2, 2012 at 12:40 pm

[...] decision to make. Should you hire a full service general contractor? Recently we posted about the risks and rewards of owner building.  We mentioned one of the biggest reasons for taking on the responsibility is for the savings. [...]

Construction Safety: Just Do It.- Armchair Builder :: Blog :: Build, renovate, & repair your own home. Save money as an owner builder. | February 27, 2014 at 9:40 am

[...] check out our previous article titled, Owner-Builder Liability.  Or checkout these articles…Owner Building:  Risks Vs. Rewards and Building Your Own Home: What is the [...]

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