TO BUY OR BUILD, THAT IS THE QUESTION
Category Durban Property Market
Here's the choice - buy an existing home or purchase a piece of land and build your own? Wakefields' CEO, Myles Wakefield, examines how they face off.
When examining these two options, it begins - and ends - with a detailed look at costs...but even once that's done, there will always be other considerations. For some, the idea of building your own home to your own specifications is exhilarating; for others, fear of the great unknown isnt a comfortable sensation - they need something tangible.
Comparing costs isn't that easy, but with a fair amount of homework, you can arrive at a ballpark figure. Essentially, you'll look at the projected cost of a piece of land/new house, versus a similar existing dwelling in decent condition, in the same area. The word 'projected' needs a close look, because the entire process of buying land - legal/transfer duties and fees – architect's drawings, municipal approval, materials, and building can take in the region of one - two years. Labour and material costs can rise, but equally, so too bond or interest rates.
One thing we've all heard is the urban legend around the true cost of building your own home: 'Add on at least another R300 000 or 30 percent,' or other gruesome stories to that effect. It isn't simply a legend, because costs can spiral out of control, but it's often caused by - shall we say - a lack of discipline on the part of the prospective homeowner. It's vital to draw up an educated spreadsheet - in other words, realistic - and keep a brake on costs.
Relationships are key to the building process. You, your architect, your builder. You're on a creative journey here, and it's an uncomfortable, even expensive, one if you don’t have the same vision. The stories of broken relationships are legion. Ask around, talk to those who've built, get recommendations - lots of them. Look at what else your architect has designed. Ask who he or she likes to work with.
Builders usually offer different ways of structuring your costs. 'Labour only' seems to be the favoured way - the builder states his labour cost upfront – it's in his interest to build speedily, not shoddily - and you, the homeowner, know what you're in for when it comes to that cost. You will pay all the bills for materials, so you need to be committed to doing that on a daily basis. You need to trust your builder and if he says pay this, or I need X number of bricks, you do so promptly.
With a Labour Only contract, you - the owner - will work harder, but you will save. In addition, if your builder provides a full service contract - in other words, he allocates R250 a square metre for tiles and so on - if you haven't done your homework, you'll arrive at the tile emporium….and find very little you like at that price. And that's where costs begin to escalate substantially.
Another thing - if your builder is bearing all the costs, he will add a mark-up. He's buying goods from the suppliers, and tying up his own cash - he's unlikely to do that for nothing. So, generally, the labour- only contract has no mark up.
One of the major causes of escalating costs is the length of time your builder takes to build. If you've opted for Labour Only, that time frame can be affected by your efficience...or lack of. If your builder gives you five days to choose and buy tiles, don't take longer because you'll hold up the process. Time is money.
If you've raised funds for this building project, the longer it takes, the more it'll cost you. In addition, you're likely to be paying where you're staying, so you're effectively paying for two homes.
One of the tough aspects of building is fine-tuning your ability to translate a two-dimensional drawing on paper...into a three dimensional home. Being able to visualise exactly how it's going to turn out. For most people, as the building comes out the ground, there are numerous 'I can’t believe it' moments.
And that's where that urban legend enters. 'Make this bigger, that smaller, change that wall'...these changes increase the actual building/material costs, as well as increasing costs by lengthening the time taken to build (plans often need to be resubmitted to the municipality).
And the other element which raises costs are the 'pretty bits' - the tiles, cupboards, and so on. If you allow each one of those to overrun your stated budget, it adds up fast. Realistically, you will end up spending more on a few aspects, but if you've managed to save on a few others, that'll ease the pain. There will always be things you had decided to do in a few years time (add a pool, build in a braai), but discover that it's not worth the wait - the cost, the disruption, the de-construction needed to accommodate those items, you may as well do it now. But they weren't budgeted for.
So, how does building a home compare cost-wise to buying? With careful planning and an effective handbrake on spending, they can be pretty comparable. That's the financial side, but in building a home, you're getting a brand-new house designed specifically for your family and your lifestyle. There's something wonderful about being part of that creative process, and no matter the roller-coaster ride which it can be, few homeowners say Never Again. It's a family journey, and it's immensely rewarding.
Author: Anne Schauffer
