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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.

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.

National Sustainable House Day 2009

Sustainable Housing DisplaysVisit a Sustainable House in your area. What a great idea if you are thinking of Owner Building!

Remember that Owner Building a Kit Home can and should be sustainable… you simply need some ideas and good advice.

On National Sustainable House Day, Sunday 13th September over 170 private sustainable homes around Australia will open their doors to the public. This is a fantastic opportunity to learn about sustainable living from homeowners who have been there, done that, and whose experiences are real. You can the bet there will be a few genuine Owner Builders amongst them. 

For the first time, homes will open for free this year thanks to the support of the Australian Government. It’s paving a way for people seeking to make their own homes or rental properties greener.

Home Sustainability Assessors funded through the Australian Government’s Green Loans program will also be available to discuss the range of energy efficiency actions that people can take around the home.

At UBuild Homes we are very focused on helping our Kit Home customers implement sustainable solutions when owner building their home. We can do this because Matthew Last, one of our Building Customer Managers is a Building Thermal Performance Assessor and a Home Sustainability Assessor. Matthew is also a Member of ABSA (Australian Association of Building Sustainability Assessors).

For home locations around Australia and for more detail on the features of individual homes visit Sustainable House Day.

Debunking the Myths around Owner Building and Kit Homes

Finding the Truth about Kit HomesOkay, it’s time to debunk some myths that are perpetuated by the Kit Home industry marketing hype that gets spun out by sales people. These myths are created solely for the purpose of making sales. No other reason. 

Myth No. 1: Owner Building is easy, anyone can do it.

This is a myth.

Think about it; a builder needs approximately 6+ years of combined on the job training and intensive study in order to obtain a licence to build a house under contract. If building a house was easy – why would this be the case?

Banks and finance companies shun Owner Builders like the plague. Why?

Consulting companies (private certifiers and drafting services, etc) and suppliers generally stiff Owner Builders with prices that reflect the degree of difficulty in providing the product or service. Wonder why they do this?

Because…

Owner Building is not easy. It can be very satisfying, successful and cost effective, but it is not easy. If you chat with an Owner Builder they will agree. They might be very proud of their achievement, but in the same breath they may also tell you they will never do it again!

Myth No. 2: Putting together a budget to build a house is pretty simple, anyone can do it.

This is a myth.

You will be told all manner of vague information, twisted tales and outright lies by salespeople who are determined to convince you that the cost of building a house is a straight forward excercise. It isn’t and you must understand that 80%+ of Owner Builder projects fail to get their financial budget accurately assessed before commencing. This is why lenders do not like Owner Builders.

Another twisted tale from the Kit Home industry is:

“It’s easy to work out a price; just take the cost of the kit and add 1.5 times to that price and that is your budget to build.”

What a crazy thing to say about something that has so many variables attached. But sadly it’s a tale that’s being told on a regular basis. 

Myth No. 3: Owner Building is the cheapest option of building a new home.

This is a myth.

Don’t get us wrong. Owner Building can be a very cost effective outcome and it can be the cheapest building option… but it depends on a number of variables.

Many people are desperate to save money, but the cost of materials and labour is extremely high and to many people these costs are well in excess of their perception. You cannot cost out a home based on perception. You must base it on realistic budget research.

Actually, the cheapest way to build a house is to find a basic brick veneer home built on a concrete slab through one of the large volume, project home builders.  It may not be the best quality home, but you will get a roof over your head, and you will almost never beat them on price.

If your sole purpose is to come up with the cheapest option then you have to expect the cheapest outcome. It can still be cheerful looking home and still be of reasonable quality – but you can’t redefine cheap; it is what it is.

What can you do about these myths? 

Be aware that anyone who is trying to sell you a kit home using one of these myths is a sales person – nothing more and nothing less. Once the sale is made their commitment to you is over. You still have to build the house and they certainly aren’t going to help you to do that.

If you are going to Owner Build, and we recommend that you seriously consider it – depending on your circumstances and your goals – then you must be seriously committed as the Project Manager/Principle Contractor (you don’t have to get your hands dirty if you don’t want to) and follow a professionally planned and systemised approach to building your home. If you cannot make this commitment then it is probably likely that you are not suited to Owner Building. 

Okay, myths aside, let’s talk about being a successful Owner Builder and why a first positive step towards successful Owner Building is buying a Kit Home Package.

A Kit Home Package is a cost effective way of getting a set of plans and specified material package to a fixed price, helping you in the overall management of your building project.

If you are going to buy a kit home it is assumed you are going to Owner Build. Why would you pay a kit home company to buy a bunch of materials and then pay a builder to build it? You might as well get the builder to purchase the same products at the same price under his contract.

Being a successful Owner Builder means three things:

  1. Your home is built on time. As measured against a realistic time frame to begin with. 
  2. Your home is built to budget. As measured against a realistic budget to begin with.
  3. Your home is built to a high level of quality. An experienced builder should be able to come to your home and applaud the quality of workmanship.

This is how success is measured. There are no other measurements.

UBuild Homes was created to ensure one thing: Successful Owner Builders. That is what we care about. Yes, we sell kit homes, but we also give people good advice rather than sales pitches. We are builders first and foremost and we are dedicated to providing people like you with honest, integrity based solutions, even if that means introducing you to a contract builder with no benefit to us.

But we can’t help unless we talk to you.

When considering Owner Building, please consider buying a kit home in order to give your project a greater chance of success. But more than that, please don’t get hooked into doing this based on a myth. Do some research, or even better why not talk to us on the phone and schedule a complimentary 2 hour consultation where we will spend that time educating you on how to be a successful owner builder.