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Kit Homes Help Owner Builders and Builders

Kit Homes Make Life Easier for Owner Builders and Builders. In fact, Kit Homes can make life easier for everyone! At UBuild Homes we even have builders who are buying kit home packages from us because of the saving in time and money over the life of the project.

Help with Kit HomesSo if you are considering Owner Building you have to ask yourself if a kit home package with a proven step by step system is going to add value to your role as the Project Manager.

To understand better what these benefits are you first have to understand the amount of work, time and energy that goes into the specifying, ordering and scheduling of materials for any building project.

Developers and Builders are finding the process very cumbersome and costly so are looking at every opportunity to cost effectively outsource this function. So why don’t Owner Builders do the same? Well, the reason is that Owner Builders think they will get better pricing by shopping around. Sometimes they might, but most often they don’t. In fact most times, unless you are an Owner Builder and you work in the construction industry with access to buying power and trade accounts, you will actually pay much much more.

You see, building supply companies see Owner Builders as a prime profit opportunity. As they don’t provide repeat business they will nearly always pay full retail price for all materials. So when they add it all up the price they pay for a package of materials to lock up stage can often be as much as 20% more than what it would have cost if they had sourced it through a kit home company with a builders licence who has access to trade buying power. 

One developer has identified the value in the UBuild System and Kit Home Package as a complete new way of doing business. He simply outsources all the systems and material construction delivery schedules. UBuild Homes have 45 years experience in residential construction with the past 20 years developing excellent systems from design management construction management in the form of construction work orders, purchase orders, final hand over processes, and account tracking systems.

Many builders are great at building and not so good on the administration side of things. UBuild Homes are currently working with builders all over Australia providing packages of systems, processes and materials to suit the construction needs.

Many builders simply do not have time to do the estimating and quoting accurately and effectively and many Owner Builders simply don’t have the skill or experience. So if UBuild Homes are doing something that builders, developers and finance companies are supporting then why not consider this approach as an Owner Builder. You might be surprised by the outcome.

The Granny Flat Makes a Come Back

Adding Granny FlatsIf you ask the government (local, state or federal) they will call it a “secondary dwelling”. If you ask the public what that means you will get a blank stare. But ask the public what a Granny Flat is and you will get instant recognition.

The context of this article is based on these facts:

  1. There is a severe shortage of affordable rental housing in Australia.
  2. Housing affordability continues to rise in Australia making it one of the least affordable countries in the world now to purchase a home. 
  3. Governments are recognising this.

A Granny Flat planning document was recently issued by the NSW Government. If you live in NSW and are considering building a Granny Flat on your property then it is well worth a read.

The document is titled: Supporting Affordable Rental Housing – Granny Flats (Secondary Dwellings) and can be downloaded through this link: NSW Govt Granny Flats

The NSW Government are doing everything they can to make building a Granny Flat easier. They are providing a dedicated State Environmental Planning Policy (SEPP) to cover all local council areas.

In the past Granny Flats were only permitted by local councils under very strict and complicated local planning and environmental plans. The new policy is state based and is basically the state government saying to local government, “This is the way it is”. The NSW Government sees this as a logical (and some would say radical) plan towards boosting the supply of rental accommodation.

Owner Building a Granny Flat is a great option. There are 3 basic options:

  1. Convert part of your existing home into a Granny Flat. 
  2. Build an extension onto your existing home and turn this into a Granny Flat.
  3. Build a new fully detached Granny Flat on your property.

Now there are still a few rules you need to consider and the government document is a good a summary. Bear in mind that not all states have undertaken the same initiative as the NSW Government in promoting the building of Granny Flats, so do some research.

If you need help in assessing how to build a Granny Flat on your existing property then give us a call. We’d be delighted to help.

Kit Home Companies Going Broke

Troubles with Kit Home CompaniesHow does a Kit Home Company go broke?

There has been cause for concern over the number of Kit Home companies that are in financial trouble and the number of customers and Owner Builders that have been adversely affected by this.

In particular, if you had a chance to read the recent article in the Bundaberg Newspaper about an Owner Builder losing money with a kit home company that went broke, and basically the Owner Builder having no protection under any warranty legislation. When you have a moment check out the article:

Kit Home Customers Fall Through Cracks

Here are some insights into the issue:

  • First of all the UBuild mantra for Owner Builders should be: Trust No One. The Building and Construction Industry is an extremely volatile and difficult industry and whether you are owner building or not, you should be extremely careful with every transaction. Ensure that you have good written contracts in place and that you manage your risks very carefully.
  • Kit Home Companies should not go broke! It’s that simple. Kit Home Companies go broke because their parent company or their manufacturing company goes broke. Any Kit Home Company that manages their own manufacturing or that is owned by a building company is a risk because they need to feed the beast, and so all revenue goes back into ensuring cash flow for the parent and partner company.

As a potential customer/Owner Builder you should be asking the following questions of a prospective Kit Home Supplier:

  1. Do you operate solely as a Kit Home Company or are you a building company with a division that is a Kit Home Supplier? 
  2. Do you own the suppliers you put the kits together from? ie The Frame and Truss Manufacturing (Steel or Timber), the Window Manufacturing Company, etc?

If the answer to these questions is “Yes” then you are at risk because these businesses require large amounts of cash flow to keep them going. Your kit home deposits go into that pool of cash flow.

A Kit Home Company should be cash flow positive. In other words they should be using their buying power to source the Kit Home Package for the client at the best possible price by ensuring that good suppliers are competing against each other for the business of that Kit Home Supplier. Kit Home Suppliers should then be flexible and customer driven in their ability to manage the needs of the customer in terms of product and finance.

UBuild cannot comment in detail about the Warranty Insurance issues raised in the Bundaberg Newspaper article, except to say that in every state the Home Warranty Insurance process is different – and that it is a mess. The fact that there is on ongoing Federal Government enquiry into Home Warranty Insurance is a testament to that fact. 

The bottom line is that customers should not lose money dealing with Kit Home Companies. These companies, if properly managed, should be service focused, flexible, wholesale building material supply companies. If they are involved in other businesses then you, as a potential customer, are at risk.

Please check out a recent article on the Owner Builder Advice site about a real customer who was rescued from a difficult situation because of the inherent flexibility in the UBuild Kit Homes process:

Close Shave for a Kit Home Customer

Good luck out there and keep us posted with any challenges or questions.

Close Shave for a Kit Home Customer

Recently a Perth Owner Builder almost lost her deposit to a kit home company. This Owner Builder was just about to pay her deposit when by sheer luck she discovered that the kit home company was heading into liquidation… unfortunately, a common problem at present with the challenging economic climate.

Lucky Kit Home BuyerThis customer contacted UBuild Homes through the Internet and asked for some advice on how she might be able to move forward. She was a bit distraught about her dealings with the other company, but we were able to reassure her that all was not lost. UBuild showed her a process with a flexible approach, and now things are well and truly on track.

Some of the benefits that this customer received by working through UBuild Homes:

  1. As she already had her design we were able to take that design and put a kit package together to her desired specifications. Even better news – we were able to do this at a price better than the original kit home company had provided!
  2. The customer was provided with a fixed quote to supply her kit home to lock up stage. Fully detailed and specified.
  3. UBuild Homes were able to source all of the materials locally. As the customer was in Perth this made for very low freight costs. As UBuild Homes are not beholden to specific manufacturers we can shop around locally and use our national buying power to keep your costs down.
  4. We were able to organize the delivery of the kit home package of materials in stages to suit the customer’s building schedule.

Things are now going according to plan and the customer has gone from distraught to extremely happy. It’s all about figuring out what solution is the right one, and then with help from experts, putting that solution into place.

Something else you might find of interest is the subject of ‘sustainable kit homes’. It has been pointed out that many of the components to a UBuild Kit Home are “low embodied energy products” due to local sourcing of materials, minimizing freight distance and the types of product used, eg. plantation timber.

UBuild Homes is dedicated to managed sustainable construction and you’ll read a number of articles on this topic in the future.

So if you need help finding the right solution to your Kit Home challenge or want to investigate sustainable kit homes further, then give us a call or simply contact us.