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
- 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!
- 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.