Common advices before taking an Owner Builder loan
Being an owner builder demands a real sense of responsibility and strength to fulfil and manage what comes with it.
Like any major decision, it’s wise to consider the risks when making your decision.
Some common advice and suggestions for you before you take up an owner builder loan are as follows:
1. Keep a record of all expenses:
This is super important. If you don’t do this, you’ll end up in budget strife and that will only bring unnecessary stress. Make sure you set up a system to record expenses before the build even commences. Whether it’s paper based or an Excel spreadsheet. Record EVERYTHING. And should a financial issue arise, well, you’re going to be one step ahead.
In addition, to really cover yourself, get a waiver of lien from contractors. This is proof that the contractor has received payment for work carried out which equals no issues down the track.
Also, at the end of construction you’ll have a complete record of all costs being fully paid.
2. Theft of building materials:
Make arrangements to prevent the stealing of building materials. This will avoid any issues/delays to arrange replacements plus, you’ll avoid additional costs.
The bank might be of little or no help at all if theft takes place. To continue your work, you will have to use your own money to replace the materials. This invites a loss and not profit. Not to mention stress!
3. Pay suppliers as you go:
We’ll say it again, as an Owner Builder you must keep records of work being carried out (before it starts) and when it’s completed including payment.
You have to utilise the monies you’ve received in an efficient and convenient manner. Make sure you pay the supplier or the service provider after the work is done and you are satisfied.