Keys to a successful construction project
If this is your first time doing a major rehab project or building a home, there will be some challenges and frustration along the way. ...
I’m sure you’ve heard people say “construction always takes longer than expected” and that’s because in most cases it does. It could be because the general contractor over promised, it could be because the consumer delayed the project with changes or indecision, it could because the sub contractor never showed, or it could for a number of unexpected reasons.
Be patient. Additionally, it’s best to have a written timeline of the project and when different aspects will occur. This way you can regularly communicate with the builder on the timeline and the next steps.
Hire the Right Team
Most people cannot build their own home and almost all of us should not attempt to do it. So hiring the right team to assist you is very important with the builder and architect being the two most important people. What are your goals? What’s your budget? How much do you want to be involved in the process? You need to figure out what your priorities and goals are and find the best partners to help you achieve those.
Putting together the plan will take some time. And it should. This will probably be a home you will be living in for a long time. Most people will start out with the “wish list” plan and then make adjustments after that depending on the cost or changes that may be required.
Most people will start out with a general budget based on the size of the project - $X per square foot as an example. And those numbers are good to get a general idea of where the budget might be, but the reality will vary widely based on the local market, the supply and demand of labor, and the actual details of the project. As with plans, most people will start off with a big wish list and trim it down once the initial proposals start rolling in.
The key to good budgeting is to be realistic. Just because you want to get the cost down, doesn’t mean you will actually get it down by the time the project is complete. Quite often people will trim the budget down so they can reduce their cash to close on their construction loan only to have to pay more during the project as the higher, realistic, costs are realized.
A contingency is also recommended as well. If possible, adding a 5-10% contingency to the budget will help absorb some of the higher costs that come in during the construction phase and not require you to pay for those out of pocket.
Make a Written Agreement
A written agreement or contract between the homeowner and builder is a must. There are so many things that need to be in writing like the scope of the work, the cost, when payments will be required, when is the project is considered complete, and a myriad of other details so everyone is on the same page. A solid contract will greatly increase the likelihood of a successful project.
Some builders (mostly smaller rehabbers) will not have a contract or not want to have a contract. Proceeding without one is risky. There are even some pretty good standard contracts available online like the ones from The American Institute of Architects (AIA).
Plan for the Unexpected
There will be delays and frustration. But when it’s all done you will have created your own space for you and your lifestyle. Having regular communication with the builder to discuss the project and timeline will reduce some of the frustration and unexpected issues.