Volume Builders: How do you select them

What are your best tips?

Do you contact everyone and then narrow down the selection after comparing apple for apple?
Do you go only with the best 5?
Do you check what has been built in the area?
What`s about the massive sales? Better to wait for something coming up or just go whatever the month is?

I would say a critical part is not only the price, but the tradies they are going to use, and I guess there is not much control on this.

Also I have noticed few estates sell house&land, well, in reality if you want that specific lot you have to go with the specific builder which obviously kills you ability to get better deals on the price. Did you ever use this formula?

 

For investment?

 

Have you tried a building broker?

 

Yep, IP. @mrdobalina never heard...I`ll do a search but It is something i like to do anyway...

 

Can only speak from choosing a builder for PPOR... I contacted all developer with desirable houseplan and base price within budget. Compare all inclusions, add all building cost on top. In a way trying to match apple with apple. Most builders have ongoing bonuses, as I am told "it's all have been counted into the price of the property" so I reckon it's better to compare all inclusions rather than solely going by promotion.

 

When I did a recent project build interstate, a fixed price contract was essential. That wiped out the majority of builders as many have provisional fees and/or make you attend a fit out/electrical meeting to discuss options and pricing post-contract.

 

It's hard to compare apples with apples as there is so much smoke and mirrors being played in this game.

Try and set a spec you want and then compare a few builders plans you like around the same size with your spec. Promos can be useful but if your trying to go very basic ten they can get in the way. I'm a fan of 2550mm ceilings and LED d/l as you can't change these items latter on and if you ever decide to sell its easy to paint and add stone and make it appeal to a greater portion of the market.

 

Hey guys, thanks for all the tips.

Generally speaking it looks like prices raises every two/three months. Let`s say you buy a lot which titles within 1 year time (sort of standard at the moment here in Melbourne for new Estates at the moment), do you find a builder ASAP or wait to be closer to the titling date?

Also what`s about getting a design done by an architect and get local builders to price? Are usually locally builders cheaper than volume builders?

I read somewhere volume builders have good promotions sometimes. Let`s say I find a layout I like, is there any chance the price will go down in a specific moment due to a promotion or will always go up?

 

Promotions are just sales tactics to try and hook you in. Ignore the promotions. Focus on the overall value for size of the house and level of inclusions offered.

Remember than an excessive build time can add thousands to your holding costs. Many bigger volume builders tend to have 9-12month build times. Try and find a fixed-price builder that will commit to a build time of no more than 16-24 weeks.

Consider smaller custom builders, ideally from word-of-mouth recommendations of other investors. Do your own due-diligence. Look at projects they have on the go. Look for warning signs - unhappy tradies, sites that have long delays with no activity. Also search for online reviews.

If it is an investment, don't get too enamoured by a particular layout. Just make sure it has the size and attributes that most tenants are looking for. Avoid single-garages for example, unless it is a particularly small block.

Also, don't over-capitalise on inclusions or size of house. Particularly if in a declining or flat market. You need to make sure the end valuation will be sufficient to avoid chipping extra cash if the finance provider is not happy with the valuation at the end.

 

Depends if it is a place you want to stay in as PPOR or an IP. As one of the posters mentioned, you search the designs you like and can fit on the block. you can start planning the selection of volume builders once you lot has been secure there is no need to wait till the last few months.

9-12 months is excessive for a volume builder haven't heard of situations like (this is more for custom builders). In the building contract you can define the start and finish date with X amount of days for delays due to rain etc. i think the bonus promotions from henley, burbank, dennis family homes etc shaves some dollars here and there. you can also specify say $400 per week if it goes over the finish stated time frame. So if they do not finish, you can claim penalties for this and take it out of the final payment stage. This is important to be put as an inclusion in the contract as many people who have yet some experience to build a house do not put it in and then put themselves at the builder's mercy of running late although the HIA standard contract still enables you to claim for this but then you will be arguing etc. Also get a private building inspector (at every stage) they will be able to itemize any issues (that requires to be fixed ) before any stage monies are to be released.

i would pick the 4-5 cheapest volume builder if it was an IP which has guaranteed finish dates and then itemized from there.

 

Thanks you all, I`ll do a bit of research. Do you reckon getting an architect to do the drafting and a local builder to price will be more expensive? I can get the drafting done for a minimal cost.

Also I see a lot of volume builders try to charge if titling happens after 6/10 months, something like $300/month. Is it something you usually can get discounted (e.g. fixed price for the next 24 months) or they are pretty fixed on it?

 

Most volume builders commit to 177 days build time in my experience and a site start within 60days.

Promos do save you money. But like a sale they only save you money if you really need the item on sale.

Don't let the promo make the choice for you but it may help you when weighing up 2-3 volume builders you are happy with.

There are cheaper builders out there than the volume builders, but they may be hard for you to find as they are off market wholesale builders.

Of the volume builders I think Simonds is one of the better value builders. I am building two with them at the moment and used their $45 upgrades for $15k promo. I used this to upgrade to LED down lights, higher ceilings, floor coverings, stone bencthop amongst other items.

I don't disagree with the post about reading reviews however take them with a grain o salt and remember few people have a fabulous building experience and few people take the time to write positive reviews.

Good luck there is a Lo of smoke and mirrors in the building game it's really hard to compare apples with apples.

 

Thanks @Caltan , I`ll do a bit of research and see how I go...I think best way will be find a design and get introduced to some local builder who can potentially be cheaper than volume ones. I guess risk a smaller builders will be higher though.

I think layout is important too, especially for smaller properties.

 

@Caltan i agree mate. That's what I find the hardest part too. Even when they quote you X amount for a certain quantity of something. .sometimes they know it's going to be a little more but underestimate to make the tender look more competitive and then get you to pay later the difference as those things are rarely fixed pricing.

 

On sites starts, remember that periods are counted in working days. A 60 day site start is a delay of effectively 3 months after the construction certificate is issued by council.

When I had my PPOR built, I had a 20 day contracted site start.

Try and source a builder that can do fixed-price, 20 day site-start and a construction period of under 24 weeks.

 

Try 8 homes. 88 days guaranteed build time.

I have done custom builder, owner builder and volume builder. But for no architectural high end ip - volume still I reckon the best. They may charge more for extra inclusions but if u can organise it urself there's were the savings is.

 

Thanks guys, I think where cost can blow out is the site cost, all the rest is pretty standard. You have to do a detailed list and tick all the boxes (included / not included). Once done the first, all the others should be quicker in terms of assessment.

 

By comparing the following:

• price per sqm
• fitout spec for price
• turnaround times

You want to make sure your spec for price is reasonable, otherwise you can undercapitalise and create a dog box that will forever value and rent poorly. Likewise turnaround times are essential as some builders can be +100% longer than others, which is dead money whilst holding the builds.

From a lending perspective, valuers commonly compare based on the price per sqm to try level the playing field - this is a great barometer for seeing whether you're paying too much or warn if the spec level might be too low.

 

what other volume builders out there besides the above mentioned

 

Hundreds, Melbourne there will be around 300. Just google it and you`ll find heaps