Hello
We are planning to build a single-family home. We also want to contribute some self-performed work, but aim to assess this realistically rather than optimistically to avoid financing shortfalls and the frustration of having to borrow an extra 10,000 or 20,000 euros.
The plan is for a single-story bungalow in solid construction, designed by an architect, with 130 m² (1,400 sq ft) of living space and about 30–40 m² (320–430 sq ft) of unheated storage space (boiler room, laundry room, etc.). So, no basement.
Unfortunately, it’s not like 30 years ago when my parents built their house. Back then, neighbors and relatives still had a lot of free time, so sometimes there were seven masons working on site together.
Therefore, we plan to have the shell of the building erected by professionals, but we want to do other tasks ourselves and now want to estimate these efforts realistically.
As dedicated workers, we are 1 + 0.5 + 0.5 persons...
The 1 refers to my father, a recent retiree who can spend the whole day on site, and the 0.5 designations are my brother and me, as we have to work in the mornings. In addition, there are 1–2 of my father’s retired colleagues, but I do not want to count them as fixed labor. The same goes for my neighbor, who might help occasionally when available (office worker, unfortunately), since we have helped him before. Then there are the women (mother, sister, partner), but they mainly take care of catering and cleaning tasks.
Regarding the trades:
The shell must be built as mentioned, either masonry or glued construction—we cannot manage this alone.
Exterior and interior plastering also need to be contracted out, as well as screeding.
We would contract out roof truss construction and roofing, but plan to apply insulation boards ourselves.
We will do all electrical work ourselves since two trained electricians (my brother and father) are available. Plumbing and underfloor heating installation will also be done by us.
Using a mini excavator for excavating the foundation slab will only cost us fuel and a snack for the neighbor.
We will also do ceiling cladding ourselves, as well as wallpapering and tiling.
How can we realistically estimate the money saved by doing these tasks ourselves, compared to contracting out the trades? It’s not about saving time, since it’s clear that a small team of two or three will take longer than a professional crew. But since we are not bound by rent (living in my parents’ home), it’s okay if it takes a bit longer.
Thanks for your assessments.
We are planning to build a single-family home. We also want to contribute some self-performed work, but aim to assess this realistically rather than optimistically to avoid financing shortfalls and the frustration of having to borrow an extra 10,000 or 20,000 euros.
The plan is for a single-story bungalow in solid construction, designed by an architect, with 130 m² (1,400 sq ft) of living space and about 30–40 m² (320–430 sq ft) of unheated storage space (boiler room, laundry room, etc.). So, no basement.
Unfortunately, it’s not like 30 years ago when my parents built their house. Back then, neighbors and relatives still had a lot of free time, so sometimes there were seven masons working on site together.
Therefore, we plan to have the shell of the building erected by professionals, but we want to do other tasks ourselves and now want to estimate these efforts realistically.
As dedicated workers, we are 1 + 0.5 + 0.5 persons...
The 1 refers to my father, a recent retiree who can spend the whole day on site, and the 0.5 designations are my brother and me, as we have to work in the mornings. In addition, there are 1–2 of my father’s retired colleagues, but I do not want to count them as fixed labor. The same goes for my neighbor, who might help occasionally when available (office worker, unfortunately), since we have helped him before. Then there are the women (mother, sister, partner), but they mainly take care of catering and cleaning tasks.
Regarding the trades:
The shell must be built as mentioned, either masonry or glued construction—we cannot manage this alone.
Exterior and interior plastering also need to be contracted out, as well as screeding.
We would contract out roof truss construction and roofing, but plan to apply insulation boards ourselves.
We will do all electrical work ourselves since two trained electricians (my brother and father) are available. Plumbing and underfloor heating installation will also be done by us.
Using a mini excavator for excavating the foundation slab will only cost us fuel and a snack for the neighbor.
We will also do ceiling cladding ourselves, as well as wallpapering and tiling.
How can we realistically estimate the money saved by doing these tasks ourselves, compared to contracting out the trades? It’s not about saving time, since it’s clear that a small team of two or three will take longer than a professional crew. But since we are not bound by rent (living in my parents’ home), it’s okay if it takes a bit longer.
Thanks for your assessments.
I’ll give you an example. For us, the process includes drywall finishing to level Q3 with joint tape, painting, partial wallpapering, installing decorative moldings, applying acrylic sealants, and installing 63 m² (680 sq ft) of design vinyl flooring. Before that, we use leveling compound, sanding, and primer. The quote from the company was 11,000 (gross), with the flooring priced at 25 per m².
Alternatively, my brother is a master painter, and I’m a journeyman. We estimate about 60 hours of work needed. Multiplied by $40 per hour times two plus tax, we save a lot of money. Well, the two of them do get some recognition, but still. However, if he wasn’t a master painter with his trade discounts, I would have had to buy everything at retail building supply stores, which is much more expensive.
Good wall paint is 1.3 liters (1.4 quarts) at his price; the hardware store charges 4 per liter. Joint compound costs 0.60 per kilogram (0.27 per pound), hardware store price is 1.80. Acrylic sealant cartridge is 1 at his price; hardware store starts at 1.98. And so on. This eats up a good part of the savings.
Sure, your father as an electrician will have good trade discounts in his area, but not on paint or drywall. So, you definitely save money, but not extraordinarily so.
Karsten
Alternatively, my brother is a master painter, and I’m a journeyman. We estimate about 60 hours of work needed. Multiplied by $40 per hour times two plus tax, we save a lot of money. Well, the two of them do get some recognition, but still. However, if he wasn’t a master painter with his trade discounts, I would have had to buy everything at retail building supply stores, which is much more expensive.
Good wall paint is 1.3 liters (1.4 quarts) at his price; the hardware store charges 4 per liter. Joint compound costs 0.60 per kilogram (0.27 per pound), hardware store price is 1.80. Acrylic sealant cartridge is 1 at his price; hardware store starts at 1.98. And so on. This eats up a good part of the savings.
Sure, your father as an electrician will have good trade discounts in his area, but not on paint or drywall. So, you definitely save money, but not extraordinarily so.
Karsten
Why are you asking about the savings? Do you want to use the "labor value" as equity for a bank loan?
If not, it would be more accurate to determine and add up all prices for contracted trades and for materials to be installed by yourself.
And add a proper contingency in case, for whatever reason, something ends up needing to be done by third parties unexpectedly.
If not, it would be more accurate to determine and add up all prices for contracted trades and for materials to be installed by yourself.
And add a proper contingency in case, for whatever reason, something ends up needing to be done by third parties unexpectedly.
The plan is to prepare the calculation as if everything needs to be "done" by professionals, even though that is not necessarily required. However, our building consultant advised that certain DIY efforts should be considered as equity to avoid borrowing too much money. Additionally, the existing (already paid for) land should be included as equity. But in reality, I don’t actually have anything from that, since the house itself does not become any cheaper because of it.
The land can be fully considered as equity, so that you don't need to borrow as much money proportionally for the entire project (land, house costs, additional expenses, etc.). This relates to whether you need 120%, 100%, or, for example, 90% financing. The interest rate you require for the loan mainly depends on this.
Does the construction consultant want to increase your equity through your own work?
Does the construction consultant want to increase your equity through your own work?
C
Caspar202016 Aug 2017 07:44Elnino schrieb:
The existing (already paid for) plot of land should also be considered as equity... But I don’t really have anything from that, since it doesn’t make the house itself any cheaper.But it affects the financing. The key term here is loan-to-value ratio. This basically determines whether you have to pay a surcharge on the best interest rate. A 60% financing is somewhat cheaper than 85% or more.
Equity also improves the loan-to-value ratio in this calculation.
Another related issue is "non-acceptance." Depending on the bank and the amount, this can be quite costly.