To buy or self build?

The Irish Property Bubble Sell, Buy or Rent?
#1

Hi folks,

Sorry in advance that this is pretty long winded

I have being saving with a view to buying a house for a number of years now. Unlike many in the same situation I am quite happy renting for the moment but would buy if the right house in the right location presented itself.

I have viewed a number of houses within the past 18 months. While none of them were absolutely ideal in terms of location to me many of them did represent quite good value. Two of the more ideally located properties I viewed I put offers in on them and they were both rejected outright. Its amazing how people on discussion forums would almost lead you to believe you could make an offer close to half the asking price and the seller will talk. I put an offer within 15% of asking price on both and the buyer wouldn’t even talk in both cases.

Anyway I am in a pretty good position financially to buy. I have about €190k in savings with no financial commitments whatsoever, no loans, overdraft, credit card bills etc. Don’t even have a bill phone. About €33k of them savings are invested in a BOI Life Fund. This fund lost about one third of what I had contributed into it in 2008/ 09. Presently its almost back up to the monetary value of what I invested. Of course that’s only an academic figure but ideally I’d like to avoid encashing it if possible as the Fund is making particularly good progress over the past year or so. If it did make more sense to encash this Fund and avoid taking out any kind of mortgage whatsoever or a smaller mortgage when the time came I would do so. I probably need to place this query in another new thread to get more specific advice and pointers.

I am in what I’d consider a reasonably stable job for the last 6 years. Gross salary is €32k per annum with VHI and sometimes overtime.

Anyway back to my major dilemma. I was discussing viewing a few houses with an uncle of late who is a retired farmer and landowner. He mentioned that he would provide me with a free site if I wished to complete a self build. It got me thinking and reading a few discussion forums. It seems to be an absolute minefield. Be it the dilemmas they face in choosing a site, the heartache people face at the planning process, complications they face during the build, costs spiralling out of control, poor co-operation from tradesmen etc.

The one thing that struck me is the often high price of finishing a house to builders finish for self builds. I have seen many would be at odds on what they constitute as being a builders finish so a lot of the time the price per square foot to finish is not always of much relevance. I appreciate too that the standards of materials used in completion is critical. A figure that is quoted quite regularly is €100 per sq foot. Some quote a figure of having completed a self build for €75 per sq foot. Others say don’t even bother if you are getting quoted such a figure. As I say it seems to be a minefield.

On the plus side I would get to build in pretty much my ideal location with a self build. Perhaps I might get near enough my ideal house/ perhaps not if restrictions are placed on what I can/ cannot do as has being the case with a few local neighbours. Not with-standing that there is an opportunity cost attached to the site that would be gifted to me I would pay a premium for the afore mentioned privileges but I don’t want to pay over the odds for them either. What I would consider to be a reasonably average sized modern family home of 2,000 sq ft floor area would cost approx €200k to complete to a builders finish before any furniture/ kitchen/ landscaping/ boundary walls etc. I think its fair to say your money would go so much further if you were to buy. Just as an example I have attached what appears to be a reasonably modern 2,000 sq foot house below asking €165k.

daft.ie/searchsale.daft?id=724668

Its the exact type of house I would be all over if it were that bit nearer to me or within more reasonable commuting distance of where I work

So thats my main dilemma folks, to buy or self build? If I were to go down the self build route I would hardly know where to begin. Would I need to sit down with an architect to draw up plans/ sit down with a builder and discuss my basic requirements and get quotes. Where is the most logical point to start off at?

Any insight or constructive thoughts would be most appreciated. I would be particularly interested in hearing from those who have being through the process and could give me pointers, perhaps even on the basis of what they done incorrectly or overlooked.

#2

that might just answer your own question.

#3

Fair enough George but we all need to start somewhere. I’m sure that many who completed their own self builds were just as lacking in knowledge as myself, hence why I’m asking the questions to those in the know.

#4

OK:
Buying a house is likely to be cheaper than self building if including the site.
With a free site, I’m not sure of the calculation.
There will be a change in building control from March 2014 so all houses will require an architect/engineer/surveyor to supervise construction [Hogan’s answer to Priory Hall, avoiding work/liability for the state]. This may make direct labour projects impossible also - as the architect[etc.] bears far greater responsibility and may not be willing to take on all that risk for a direct build - unless they are paid to really supervise a lot. Under the current economic environment, who knows though.

Conservatively, I think it is a good idea to start off with a higher figure/sq.ft. - it is sometimes possible to reduce this - but sometimes this is done by taking on risks which may/may not materialise. If they don’t materialise, great - but start at €100/ft.

Self build:
Step 1: determine your budget/mortgage. [Let’s say €300k].
Step 2: I recommend architects for design at the very least and possibly all stages. Shop around. Getting a good project control service is most important [it can save thousands], paying cheaply for it comes second to that - so get options for good project control in place first, then see how price/design quality/how much you get on works.
It is also a good idea to get a QS to do an early pricing and a bill of quantities. This accompanies your drawings when you go out to tender. I seriously don’t understand why people think it is a good idea to avoid paying a couple of hundred euro on a BoQ, which makes it far easier for a contractor to price your job [so you could easily give your project to 5 or 6 contractors rather than say 3]. If they can price it more easily, they can be more certain - and so reduce the risk premium that they have to charge you. Plus you have a decent document for following payment progress to the contractor. So as a document it will save thousands.
Also if your architect/engineer isn’t good with BER, making sure you have a decent BER person is important. I also recommend going with either a reasonably young architect or a firm of architects [the rate of change of regulations in the past few years is so high that frankly there are a number of older guys that I wouldn’t trust]

There are good lots of information on askaboutmoney, boards etc.
askaboutmoney.com/showthread.php?t=131450

Possibly worth looking at something like this [haven’t used it myself, no relation etc.] selfbuildrates.ie to get a ball park initial costing yourself if you want greater certainty before going to an architect [or even after going to architect before going to QS!] - assuming you are going for a relatively normal house.

Don’t forget all the other costs of self build:
ESB connection fees,
development levy,
water supply,
sewage connection,
solicitor costs,
architect
QS
BER
air tightness testing
insurance
fit out
furniture

#5

Also, worth mentioning the amount of people I know in the building trade I could count on my fingers and wouldn’t be close friends with any of them so wouldn’t be calling on favours from any of them. It would seem quite often people are able to call in favours from friends and family members when completing self builds. I won’t be afforded such opportunities unfortunately…

#6

Thanks superman, you have being very good and your post has being most helpful to me and posts such as your own are exactly what I need to read to gain a greater knowledge and understanding of the logical step by step process involved in the self build.

The link to the thread you provided in AAM looks to be quite insightful and worth a read after I get myself a large mug of coffee! Would it be considered reasonable to sit down with an architect and outline my basic requirements and what they would be willing to do for me and seek estimates at this stage without committing myself or being liable to pay them a fee at this point. I know of a few architect firms but cant say I know of any QS.

I assume when you mention project control service you mean project manager? Are we talking about the same? It would most likely be my intention to employ one of these guys as I would be a duck out of water managing the build myself. Don’t have the knowledge or capabilities myself and most likely wouldn’t be afforded the time with my work.

I am pretty aware of the additional costs of a self build that you outline. Cant say Ive heard of a development levy but perhaps I have under a different name. Solicitor fees and furniture are most likely costs associated with buying an existing house also. Solicitor fees certainly but I appreciate you would be contracting them to do work of a different nature. There are a few other costs I can think of such as ground tests, such as percolation tests, marking out ground and excavation of topsoil.

Thanks again for your help superman it is most appreciated.

#7

FWIW, a self-build would be my preferred option as well, and I don’t know anything about building either :slight_smile: Ideally, I’d build a timber-frame house. Unfortunately in the parts of Dublin I’m looking sites are like hens’ teeth so I’m not optimistic…

Anyway, FWIW I have gathered a few points from reading posts on here from people who know how to build stuff, like superman.

  1. You need a lot of time to supervise the process (visit the site every day, stay on top of every delivery, contractor, etc)
    and/or
  2. You need to pay an architect to do everything for you.

Personally I would be going for (2) since I know so little about the actual mechanics of building a house (WTF is a damp course anyway, and why would I want one in my house?). My understanding is that in theory an architect can do it all (for a fee, of course), and hand you the keys at the end. In practice, I would want to be involved especially in selecting the finish but I would happily pay someone else to make sure it’s done properly.

FWIW, apart from superman there is another architect on here called janmc who occasionally answers build questions; would be worth PMing her also if she hasn’t seen the thread.

#8

I did a self-build (although the term is an oxymoron when you just pay someone to do it for you).

I was beyond clueless about everything to do with house building. I selected an architect from a website – guy just happened to live close to where I was building, was starting to strike out on his own and so was hungry for business, and was a German living in Ireland for 25 years which I considered a major plus (on account of my perception that Irish people in any property-related sector during the boom had a high propensity to be either inept or conmen).

The architect “semi-managed” the process, but I was still pretty much at the mercy of both the main contractor and his subbies. There were some inexplicable cost overruns, some horrendously bad work, and some gangsterism. It took about five years after the builder left to get the heating system working properly. That said, all in all the house basically “worked”, came in no more than 20% over a quite cheap original budget (final finished cost < 100 eur/sq./ft.), and I considered it a lucky escape to get away with that.

I visited the site no more than a couple of times a month during construction – what the hell did I know about it anyway. (I should point out I was not worried about all but the loosest completion timeframe as I was not depending on moving in on any particular date; in fact, the longer it took the more money I was able to save, and I was trying to do the build for less than my cash savings). The architect called me down a couple of times when he thought the builder was screwing up. A couple of biggish mistakes I made – not getting “prime costs” nailed down more closely … I had no idea what the term even meant when agreeing to them, and it seemed they were an excuse for the builder to hike up prices to any degree he wanted. Also, the architect (and me) caved immediately when the builder said he wouldn’t accept withholding of a modest amount of the final bill until some months after completion. Had I not done this he mightn’t have run off leaving me with a non-working heating system, and a subbie who refused point blank to ever come and look at it again.

So, all in all, I “got away with it”, but if you don’t know what you’re doing (as I didn’t) it seems to be a complete lottery. Definitely couldn’t have done it without the architect, who did a pretty good job overall. Perhaps could have paid more for someone to manage the project more closely.

#9

Self-build if you can, particularly if you have a good site in the right location.

I would suggest you could build your house for 200k, to very high standard. You will find it difficult to find a second hand house of equal quality for similar money.

Find yourself an architect. Sit down for an hour and talk to him/her.

Well done on the saving.

#10

@ johndaman66

-Just out of interest are there any empty / unfinished one off houses with a couple miles radius of where you are building?

#11

You can’t rely on the, e.g. foundations, being done right. I wouldn’t touch a tiger ghost house with a bargepole.

Did the self-build, managed myself, no clue at the start. Like ps2006 many mistakes, gansterism etc. but love the finished result. One of the main things keeping me living in Ireland is I love the house I live and work in!

edit: PS, it is way more expensive, I reckon 30% more? More later…

#12

If there were cost over runs, I’d be asking very difficult questions of the architect. The main reason for cost over runs should be if the client changes his/her mind about something and ups the related budget. There are a few other risks (unexpected ground conditions/extreme weather) that the employer bears, but otherwise I’d be asking questions.

#13

Absolutely - most firms would be very happy.

In the broad sense. Sometimes people just get the architect to do planning drawings and get an engineer etc. to do supervision - it can be cheaper. Before it was possible to do this and start building away. Now it is difficult - as you need to fully calculate insulation and energy requirements for all the house before determining what the insulation requirements for a given window or wall will be. There is then the managing the contracts, payment certs, mortgage payment certs etc.
The construction drawings, tendering, contract management, on site changes and periodic inspections are what I meant by “project control” - basically staying on top of cost time and making sure everyone is on the same page about what is to be built and how it is meant to be done.
It is usually best to have continuity in the project - but I think it is slightly less critical to have an architect doing this part than in the initial design *.

When you get a planning permission, the local authority require payment of c. €8-10k.*

#14

there’s a thread on boards.ie construction forum mentioning a water and power connection charge of just under €4K.
seems like a good reason to go off-grid to me.

#15

+1 superman. Agree completely about engaging an architect for the entire project, especially the contract management. It makes life easier for all. And a QS to establish a Bill of Quantities before tendering.

In terms of cost, you get what you pay for, and I’d say you could build a bog standard one-off house that barely meets the regulations for €100/sqft, but if you wanted to build a passive standard house it would cost €120-130/sqft.

#16

Thanks for yer continued responses all. The more I read about self build projects the more daunting it becomes to me and the more I tend to lean towards buying. Comments such as these are putting me of a self build

Out of curiosity ps200306 in retrospect would you go down the self build route again? No doubt you made mistakes and learned from them but if you were back in the same position as at the start and you knew little or nothing about self build projects and what they entailed would you embark on one again?

I just tend to get the feeling that there is far too much that is liable to go wrong, costs spiraling out of control, poor co-operation from tradesmen. I think I wouldn’t have the time and perhaps the patience to oversee a project as really and truly it seems demanding. Even with an architect semi-managing the project like as in your case ps200306.

I just tend to get the impression that a self build is perhaps more an ideal scenario for those working in the trade and would have quite a few contacts or family members/ friends who work in the building trade.

#17

Nothing that overly appeals to me khards. I am looking to buy in West Limerick. I work in Limerick city For the sake of being closer to my parents who are getting older and family and friends I would like to build/ buy close by to my home place. I live 5 miles on the Kerry side of Newcastle West and would consider suitable properties that are located close by to the N21 from my home parish in as far as Adare. Adare seems to be a very expensive address and wouldn’t like to live closer into the city than Adare in account of being too far away from home.

Not sold on the idea of a semi detached or even a detached house in the likes of Newcastle West. Would rather my own bit of space around my house and would like a modern energy efficient house with at least 4 but no more than 5 bedrooms. Maybe thats too much to ask but they just dont seem to be there.

#18

As far as I’m concerned, costs spiralling are because of bad project control - I would be asking questions of the architect. A QS would have ensured that PC sums were correct from the get go. All PC sums should come from the design team- not the builder. If the designer is stupid enough to allow some guy to qualify his tender by 500 PC sums getting the project ahead of someone else, I’d question his competence unless the service that was being provided was deliberately restricted - or the client was particularly prone to making expensive changes on site.

#19

There are two types of self build, broadly speaking.

The direct labour effort, where people contract the various trades themselves to build a house. This will end in disaster if you don’t know what you are doing.

The second approach is hiring a builder to build the house for you. This is what people do when they want a house and do not know what they are doing. They engage an architect to design the house and tender a number of recommended builders. Pick one of them, sign a contract and then there are no cost over-runs. That’s it. To do this successfully, you must have a very detailed bill of quantities and a professional acting for you who ensures the builder is building it properly.

As I said earlier, sit with an architect for an hour or two. There is no reason for concern on cost over-runs once you tender the building and do not make changes.

#20

Hear, Hear!
The ‘self builders’ who run into trouble are generally the author of their own misfortunes.