Being an inexperienced and naive owner builder, I was not very successful with budgeting for our build. I did draw up an extensive spreadsheet and populated it with prices I found online but in practice, I had missed many small details that added up significantly. Items such as plasticiser for mortar or damp proofing membranes had just not crossed my mind in the beginning and while those are relatively inexpensive items, everything starts to add up. The other major cost that I did not consider was the price of fuel to collect labourers and trips to buy materials – this ate up our budget in an alarming way. Lastly, because the process of building took so much longer than what we had expected, what I had budgeted for renting while we build was massively under valued and much of our precious spending money went toward paying rent while we waited to move in.
If you are anything like us, you will have watched many episodes of Grand Designs. While those projects are inspiring and informative, a common theme running through the majority of episodes is that people run out of money – they end up taking loans or borrowing money. And while we thought that we would be so clever with sourcing materials and doing many things ourselves, the very same thing happened to us. The bottom line is, that if you don’t have enough experience, you simply don’t know how to run a construction budget. But there is hope for other owner builders reading this blog because I have figured out a formula for how to budget for your home.
Formula for budgeting for house construction
When one Googles current building rates in South Africa, you will come across a variety of prices. This has to do with the level of quality of finishes. As an owner builder, you can safely work within the parameters of a large scale housing estate construction rate which is attained by a contractor being able to buy materials in bulk, but your build will be similar because you will be saving in other ways. If you are smart about sourcing, begging and borrowing, you may be able to come in cheaper than that but to be safe, work within these known parameters. At the time of writing this post, the current rate per square meter for this type of construction in South Africa is between R10 000 and R12 000. For the sake of the formula below, I will use the lower end – R10 000 per square meter.
To work out how big your house can be use the following formula:
Take your total budget (eg R1 000 000), divide that by 3 (R333 333), divide that by the building rate (R10 000) giving you an area of 33 square meters.
That is how big your home should be to stay within you budget. Trust me.
To work it out in the other way, we will use the average size of a small home – 100 square meters:
100 square meters multiplied by R10 000 per square meter (R 1 000 000), multiplied by 3 results in a total budget of R 3 000 000.
It’s a terrifying but accurate reality. Building is super expensive.
This formula may come across as being inflated or exaggerated but it’s better to be within your budget than to forge ahead with an under-spec’ed project and to be in a situation where you can’t finish your house or you have to find a source of money that compromises your life in general. There are so many unforeseen costs when it comes to building your own home and this formula is a way to ensure that you cover all those bases. You can tweak the formula by having a lower square meter rate (such as ours, see below) or to divide the pot by 2 or 2,5 instead of 3. It’s just better to be safe than sorry.
Details of our build and how we saved money
At the moment, for our entire project (including all machinery and extras such as the land surveying and drawing submissions fee etc) we are sitting at about R 8500 a square meter. And our house is BIG! We saved money by sourcing many second hand materials, being smart about solving problems such as insulation for floors and ceilings and finding the right sub-contractors to work with who were willing to work with us and not do the whole job for us.
Facebook Market Place is truly your friend when you are building yourself – there are always people selling a load of bricks or a stack of tiles or a bunch of roof trusses at lower than retail rates and these small savings make a big difference in the end.
Other ways to spend your money wisely
- If it is possible for you to live in a temporary dwelling on your property while you build, I would highly recommend doing so – it saves so much money. In our case, we run a business from home and needed an office space, uninterrupted internet connection and reliable electricity source so staying in a caravan on the property wasn’t an option for us. If you are going solar, then you can do your set up in such a way that it gets migrated to your house when the time comes for that installation. Your sewer connection or conservancy tank is one of the first items that needs to be addressed on the property, so there is a way that you can put together a temporary toilet situation.
- If you have some design skills, then it might be better for you to work with a drafts person as opposed to employing an architect. Fees for someone to draw up your building according to the SACAP legislation, are far cheaper than architects fees. The only point for consideration is the architect is the person who typically does the XA calculations for your building as part of the required Energy Performance Certification but there are consulting companies who will do this for you. Every project must have a structural engineer involved and most often, the engineer is willing to help you solve design problems you may be facing. The engineer can also be the primary designated expert on your submission drawings.
- Consider having a quantity surveyor draw up a bill of quantities for your building before you start so that you have a clearer idea of what the potential cost will be and to figure out which elements you can save on by sourcing materials in a smarter way. A QS is an extra expense, but you might end up saving money in the longer term.
- Without compromising on the size or aesthetic of your home, there are construction methods that are very budget friendly that also look good. Research many techniques and materials and work out what these would cost in use on your building – you may be surprised to learn that a method that you previously assumed would be expensive, turns out to be far cheaper, or the other way around.
Final tip
This may not be the best course for everyone to take but I had a clear idea of the finishes I wanted in my home and so I purchased most of these things right at the start of the project. It may seem foolish to be buying taps and switch plates for a home that doesn’t exist yet, but it will eventually one day and if you know what these things are supposed to be, buy them at the start. I say this for two reasons: 1. things only become more expensive with time, so you could end up saving a lot by buying these things at today’s prices as opposed to the inflated rate 3 or 4 years down the line. 2. By the time it comes to putting the finishes into your home, you will be so stressed about money and so over budget, that you won’t want to buy the things that will add the most in terms of lifestyle to your home. I am not suggesting that you spend the biggest portion on finishes (in fact the opposite, it’s amazing what you can find online) but know that while your dream is fresh in your mind, it could be the ideal moment to make these decisions about how your home looks and feels and then committing to that and buying those elements. You will be so confused after months and months of building that if you leave it to later, you could get the wrong things entirely.
If you do decide to do it like we did, be sure to label every box and package with the location where it will eventually be installed and to store these things safely together. When it finally came time to put our kitchen tap in place, we couldn’t find it and ended up having to buy another one!
If you have any questions or need advice, please don’t hesitate contact me on info@ownerbuilderinsouthafrica.co.za.