*I will start with a quick definition of what I mean by ‘owner builder’: I use this term here to mean someone that performs the majority of the manual tasks required to build a house or a cabin, and only hires professional help for skills that they do not possess.
Physically building your own place can be a wonderfully fulfilling project to take on, and done right it is possible to save quite a bit of money, too.
But, as with everything in life, the devil is in the details.
The main reasons for considering being an owner builder are usually:
- to save on labour costs
- wanting full control over the project
- you have the time, skills and resources to do it yourself
- the pride and satisfaction of being able to say “I built this!”
Deciding to become an owner builder for your project isn’t a decision you should take lightly; it’s worth considering both the pros and cons first.
Some pros of being an owner builder:
- Potentially saving a substantial amount of money
- Providing you hire good subcontractors, the quality can be great
- Keeping full control over the project and end result
- you can build at your own pace
- You can take pride in the final result, knowing you did it.
Some cons of being an owner builder:
- Disappointment with the amount of actual savings
- Substantial time and energy investment is required
- You must consider it your full-time job for 4-6 months, or longer
- There’s the potential for more issues in an owner-built project
- You’ll be responsible for any cost overruns and quality issues
- You may not be able to get construction financing
How much can you save?
One of the main reasons people consider building their own place is to save money. There are no shortage of books, blogs, building plan vendors and reality TV shows and websites that suggest thousands upon thousands in cost savings, without fully acknowledging the time commitment, practical skills and risks that this path will involve.
If you’re someone who is very organized, can learn new skills quickly and feels passionate about managing your own project, it is possible to save a meaningful amount of money by doing it yourself. By acting as your own general contractor and doing most of the work yourself, it is reasonable to project savings between *10-15%, providing everything is done just as a professional builder would do it. This is a substantial figure that can help to lighten the financial burden of the project as a whole.
*(this calculation assumes that your time is not ‘free’; as long as you are building, you will not be able to physically work elsewhere. The paid labour time that you save by doing it yourself is offset by that assumption. If you have the luxury of a stream of income that does not require your time and attention while you build, it will be possible to realize much greater cost savings, up to a maximum of about 30%. But, keep in mind, you will undoubtedly build much more slowly than a professional crew could, altering your ‘cost savings’ calculation.)
Home builders rarely make a hefty profit, on average around 15% of the total cost to build, but their ongoing overhead costs to run the business - employer financial obligations, tools, trucks and equipment, etc. - trims that back to around 10%. Being a good builder takes a lot of acquired skill and considered effort and time, but the profit margins are thin. This is why there are not more of them: If it was easy to do and lucrative, there would be many more builders.
What Skills Does It Take To Be An Owner Builder?
The key skills include:
- Planning and project management
- Spotting potential issues in plans
- Understand the fundamentals of your local Building Code
- Jobsite and Labour Safety
- Problem solving and communication
- Mitigating material and sub-contracted labour costs
- Getting the right permits and inspections
- Managing subcontractors for tasks that you don’t have the skills for
- Ordering the right materials for each stage of construction
- Monitoring your budget
- And, last but not least, the tools, practical skills and knowledge required to do the parts of the construction that you intend to do yourself
This list is not exhaustive, of course - being an owner builder can be personally and financially rewarding, but there’s a lot that goes into it.
A hybrid strategy that might be an option for you is to hire a professional framing crew to build the raw shell of the building, from floor to roof, and then you take over. This method gets the house up out of the ground and protected from the weather much more quickly than you would be able to do it on your own.
If these all sound like feasible tasks and requirements to you, it’s worth considering building one or two smaller projects before starting on your dream home, such as building a sleeping bunkie, or a wood shed, or the detached garage. These projects may not be as fun or meaningful to work on, but will take you through the same general process and let you hit the ground running when it comes to your actual home.