ᐅ The Same Old Problem – Turnkey Contracting vs. Individual Contracts
Created on: 6 Nov 2014 09:52
N
Neubau82
Good morning, dear new building community!
I am facing the classic decision... whether to go for a turnkey build or to contract everything separately...
First, here are my key data:
Plot size – 805 m2 (8,663 sq ft) available
Living area – 160 m2 (1,722 sq ft)
Roof – gable roof 22°
Floors – 2 full floors
Basement – fully cellar
Heating system – air heat exchanger
Heating – underfloor heating on ground and upper floors
Windows – plastic frames, triple-glazed
Bathroom – shower/bath/2 washbasins on upper floor
Toilet – WC/shower on ground floor, prepared connections in basement
Garage – double garage 9 x 5 m (30 x 16 ft)
Floor plan – simple, rectangular without slopes or offsets, symmetrical
Dormers – none
For the above building project, we have received a turnkey offer of €345,000.
I am now very uncertain whether I can actually save anything by contracting the entire build separately... I also know that the construction industry can be quite hectic, and one often a) waits ages for quotes, and b) has trouble finding anyone with availability.
I am skilled in crafts myself (trained carpenter) and also have many acquaintances in the construction industry (bricklayers, carpenters, electricians, etc.). Unfortunately, you still have to present figures to the bank... which in turn require reliable data... leaving aside the mental strain...
After extensive research and discussion, I have gathered many opinions and perspectives. The following comments from my friends and acquaintances have been on my mind day and night:
- Don’t contract the trades separately, you won’t save anything; in fact, it might even be more expensive. General contractors negotiate completely different prices than you can (structural engineer)
- Based on experience, contracting separately at this scale leads to additional costs of about €100,000. General contractors negotiate very different prices than you can (architect)
Since these statements come from very experienced people, I think there must be some truth to them...
What is your opinion?
Be brave and contract separately?
I just want to sleep well again... well, I guess I can forget about that for at least a year anyway.
Thanks for your advice!
I am facing the classic decision... whether to go for a turnkey build or to contract everything separately...
First, here are my key data:
Plot size – 805 m2 (8,663 sq ft) available
Living area – 160 m2 (1,722 sq ft)
Roof – gable roof 22°
Floors – 2 full floors
Basement – fully cellar
Heating system – air heat exchanger
Heating – underfloor heating on ground and upper floors
Windows – plastic frames, triple-glazed
Bathroom – shower/bath/2 washbasins on upper floor
Toilet – WC/shower on ground floor, prepared connections in basement
Garage – double garage 9 x 5 m (30 x 16 ft)
Floor plan – simple, rectangular without slopes or offsets, symmetrical
Dormers – none
For the above building project, we have received a turnkey offer of €345,000.
I am now very uncertain whether I can actually save anything by contracting the entire build separately... I also know that the construction industry can be quite hectic, and one often a) waits ages for quotes, and b) has trouble finding anyone with availability.
I am skilled in crafts myself (trained carpenter) and also have many acquaintances in the construction industry (bricklayers, carpenters, electricians, etc.). Unfortunately, you still have to present figures to the bank... which in turn require reliable data... leaving aside the mental strain...
After extensive research and discussion, I have gathered many opinions and perspectives. The following comments from my friends and acquaintances have been on my mind day and night:
- Don’t contract the trades separately, you won’t save anything; in fact, it might even be more expensive. General contractors negotiate completely different prices than you can (structural engineer)
- Based on experience, contracting separately at this scale leads to additional costs of about €100,000. General contractors negotiate very different prices than you can (architect)
Since these statements come from very experienced people, I think there must be some truth to them...
What is your opinion?
Be brave and contract separately?
I just want to sleep well again... well, I guess I can forget about that for at least a year anyway.
Thanks for your advice!
We are currently in the process. We hired an architect only up to obtaining the building permit / planning permission and are now managing everything ourselves. Based on my experience with new builds by friends and family, my cost estimates are much more accurate and precise than those from the architect... Honestly, I don’t know where they get their numbers from. ops:
Managing the contracting independently is extremely demanding and requires a lot of organizational skills. However, it’s also a lot of fun and allows us to achieve a much higher quality of finishes than if we had gone through a general contractor!
Managing the contracting independently is extremely demanding and requires a lot of organizational skills. However, it’s also a lot of fun and allows us to achieve a much higher quality of finishes than if we had gone through a general contractor!
We are currently in the middle of the process, too. Like Kisska, we worked with an architect up until the building permit / planning permission stage (who continues to support us with advice and assistance), and we selected all the contractors ourselves. We relied exclusively on recommendations; unfortunately, the two contractors we chose without prior referrals are now causing problems and delays in the construction... but that’s another story.
Compared to turnkey offers, we’re hardly saving anything, but we have a much higher-quality finish.
However, I don’t think we would do it the same way again (feel free to ask me again in a year), as it’s extremely exhausting and time-consuming. We both work full-time, have long commutes, and spend every day and weekend at the construction site (even though we have outsourced about 95% of the work to companies), plus all the daily phone calls, emails, and so on.
Compared to turnkey offers, we’re hardly saving anything, but we have a much higher-quality finish.
However, I don’t think we would do it the same way again (feel free to ask me again in a year), as it’s extremely exhausting and time-consuming. We both work full-time, have long commutes, and spend every day and weekend at the construction site (even though we have outsourced about 95% of the work to companies), plus all the daily phone calls, emails, and so on.
Individual contracts naturally mean that you first have to find tradespeople who will provide a quote. At least in this area, they have been fully booked for years, and the situation is getting worse. In this context, a single homeowner’s job is understandably less attractive than larger projects.
Everything has basically already been said by @BratacDD, @nordanney, and @Kisska86.
We also build using individual contracts, which allows us to be involved in every detail and end up with an overall high-quality house, etc. We simply have control over everything. It is time-consuming, but it’s worth it considering the amounts of money invested. I would feel uneasy just handing over more than 350,000 euros to a general contractor or construction manager without having any rights or options to make corrections (usually only possible at extra cost), not being able to directly instruct the tradespeople, or maybe not even being allowed to enter the construction site until handover is completed.
What @nathi says is also true. In Berlin, the tradespeople are very busy, and scheduling appointments or getting callbacks is often wishful thinking. You have to be persistent and show that you are serious and that the construction work is being monitored.
We also build using individual contracts, which allows us to be involved in every detail and end up with an overall high-quality house, etc. We simply have control over everything. It is time-consuming, but it’s worth it considering the amounts of money invested. I would feel uneasy just handing over more than 350,000 euros to a general contractor or construction manager without having any rights or options to make corrections (usually only possible at extra cost), not being able to directly instruct the tradespeople, or maybe not even being allowed to enter the construction site until handover is completed.
What @nathi says is also true. In Berlin, the tradespeople are very busy, and scheduling appointments or getting callbacks is often wishful thinking. You have to be persistent and show that you are serious and that the construction work is being monitored.
klblb schrieb:
... We simply have control over everything. It’s time-consuming, but worth it given the amounts involved. I would feel uneasy handing over more than 350,000 EUR without any rights or options to make corrections (or often only at extra cost), not being able to directly instruct the tradespeople, and possibly not even being allowed on site until handover is complete.
....Well, as long as you are building a turnkey house with a general contractor / main contractor! and you are registered as the client, you are allowed to access the construction site.
Also, you’re not just handing over money without control; you have a site manager whom you can call daily and bother. Our corrections didn’t cost us anything during construction, and the tradespeople were happy about the special orders I gave them because it meant they could issue additional invoices.
If we didn’t feel like dealing with it, we just stayed out of the way and let the site manager handle it.
And if something got messed up, it was the site manager’s and the company’s responsibility to fix it, so we were out of the hassle.
Best regards, Yvonne
Regarding costs for changes during the construction phase: a tradesperson doesn’t work for free—if you change your mind, it will show up somewhere on the bill. A subcontractor settles accounts with the general contractor.
D
DerBjoern10 Nov 2014 11:08Which features are supposed to be consistently higher quality with individual contracting? I generally choose the features myself anyway. That way, I have control over what gets installed. It all seems to be a bit generalized.
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