First time posting on here so go easy on me.
I'm a 24yr plumber who bought my first house almost 12 months ago, I bought it as my PPOR so i got the FHOG. The house is 2 hrs away from where i work so ive basically only been using it on w/e's and staying closer to work the other nights. The paid $270,000 for the property and with the work I've done to it I would expect it to currently be worth around 300k. Its a 2bedroom asbestos house on a 850m2 block, the house is on the front left of the block making it an easy subdivision.
So here are my questions:
Obviously my first item to worry about is the feesablilty of the project, (final front house price + final back house price) – (original house price+cost of subdivision/build+interest on loans+sales fees)
? obviously the figures will be out a bit due to the use of the FHOG and the fact that its taken a year to start to plan this but what sort of margin do i need to make sure this would be worthwhile? I know costs can blow out pretty easily during the build and change in house prices can affect profits significantly.Secondly, If I decide to go through with it, what are the advantages of owner builder vs employing a builder? The way I see it basically owner builder would be a great challenge, I could save a lot of cash doing things myself and through mates, i'd save somewhere around 20-25% straight up as thats the margin most builders have on top but it would mean a lot of extra work i need to find time for, the build could take quite a bit longer and it might be harder to get finance for the project.
Any thoughts/ideas about any of this would be very much appreciated.
Thanks Brendon
Even though you're in a trade, the time that it takes to build (ie project manage, tender, coordinate trades, clean up site, supervise, purchase materials, keep the ball rolling etc) will way exceed the savings that you might make. If it takes 6 months longer to build than a builder, your interest costs will chew up whatever savings you have made. The downside is the satisfaction of not having done it yourself. If you run with a bog standard project home, the prices are pretty bare so you couldn't beat the price with a one-off design.
If need be, you might consider excluding some items from the builders works eg the plumbing works (if you hold all the appropriate licenses) but it may delay the builder if he has to wait on you to carry out drainage, stormwater, rough-in or fix-out (any excuse will do for an extension of time claim if you aren't there).
? obviously the figures will be out a bit due to the use of the FHOG and the fact that its taken a year to start to plan this but what sort of margin do i need to make sure this would be worthwhile? I know costs can blow out pretty easily during the build and change in house prices can affect profits significantly.
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