Learning The “Secrets” of Lenders

What You Should Know about Being an Owner-Builder

Having a home that is personally built by the owner is an idea that has been through many people’s minds. Many of us never act on the idea because of the probability of it not working the way we want it or simply because we think it will cost way too much. But there are some that pursue on gaining more knowledge about the idea and later finding out that there are some things that contractors do not want you to know.

One way to save a lot of money in building your own home is by being an owner-builder as opposed to hiring a general contractor to do the job for you. In order to be an owner-builder, you must be aware of the role and responsibilities that a general contractor would generally take care of. Some of the most crucial responsibilities of a general contractor that an owner-builder must assume is setting up a budget for the overall construction, purchasing the needed materials, monitoring the construction progress, and also hiring subcontractors.

There are times when the entire process can be very intimidating especially when interests clash together. Moreover, there are necessary paperwork that the owner-builder must take care of such as the building permit. With all the factors considered, it is very understandable why some people who has never tried to build a home would say that it is easy. But, with all those effort to be exerted, there is a great reward.

This great reward is the percentage that most general contractors charge as their professional fee which can cost up to 20% of the total value of the actual house. With that being said, the 20% that you would have paid to the general contractor could be used for other expenses and become part of your home equity.
The general contractor’s fee will still cost you a lot more money in comparison to the expenses that you will have to include in the budget for being an owner-builder. Even though there would be a lot less work for you if you hire a general contractor, you must always consider the high cost of paying their fee and to keep in mind that the general contractors have total control over the whole project. If you hire a project manager, a part of your money will go to the project manager which is responsible for overseeing the progress of the construction, which means another deduction to your potential equity.

An owner-builder can only be done by people that can handle great responsibilities since it is not an easy job to fulfill. Building a house on your own is a very challenging task but there are great rewards that you can enjoy if you can endure the challenge.

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