The Ultimate Guide to Being an Owner Builder

The Ultimate Guide to Being an Owner-Builder

Introduction

Taking on the role of an owner-builder in Queensland (QLD) offers a unique opportunity to directly influence the creation of your dream home, whilst significantly reducing the cost of the project. This guide is designed to walk you through every critical step, from choosing your land to securing your occupancy certificate. By the end of this guide, you’ll not only have a comprehensive understanding of what it takes to successfully manage your build, you will have access to forms, documents, and tools that will help turn your plans into actionable steps.

Step 1: Choosing Your Land

Selecting the perfect plot of land is the first step in your owner-builder journey. In fact, it is an absolute requirement, as you can not secure your owner builders licence without a physical address for the house/project. This section covers what factors to consider when choosing your land, including location, price, soil quality, and access to utilities/services.

4 key considerations when choosing land:

  1. Location: It goes without saying, that location is a naturally a key consideration, and this applies whether you are an owner builder or engaging a project builder. It does become more relevant though when you become the builder and by default, the project manager, as the location, amongst other things, dictates access to trades and materials. The more remote or inaccessible the location generally the higher these costs become, so your cost per square metre to build, increases.
  2. Price / Cost: The relevance of this is nuanced, in that it depends upon your specific skills and access to financial resources. For example, if you are new to construction entirely, it may be a little risky attempting a large build. A large build would likely take place on a more expensive block of land, or an expensive block of land. Why? Because if you purchased a $2 million block of land, you would be undercapitalising if you built a small $300,000 house on it. So, keep in mind your skill level as a tradesman and/or project manager, and ensure you do not undercapitalise your build.
  3. Soil Type: The soil type will predominately impact the footings design, which in turn can impact the cost. To use a real-life example, the team at Mod Hauz has built several homes on Russell Island, on the Bay Islands of South East Queensland. One block in particular, was quite sandy, resulting in footings needing to be over 2m deep. The cost of the concrete for a 45sqm house blew out to $7,000. For a 70sqm house at Reedy Creek, the footings were only 600mm deep, resulting on concrete costs of $2000 for a house double the size. Then you add the additional cost of the SHS steel footings, as you can imagine, soft sandy soil can significantly impact the cost of construction, and it 100% correlates to house size, so these cost differences become significant as the house size increases.
  4. Access to services (water, sewer, power): This consideration is a very interesting one, in that there are areas for opportunity to create equity if there are a lack of services. For example, land that does not have services, is generally significantly cheaper. “Off grid” land, or even partially off-grid land (example, land without sewer connection but with power and water) can be significantly less expensive. The cost reduction can in many cases be far greater than the cost of adding off grid power and water and septic. Let’s crunch some basic numbers:
    1. Septic installation may cost $15,000-$25,000
    2. Off-grid power will cost $20,000-$40,000
    3. Large Water tank approximately $4,000 delivered

So for a total investment of around $50,000, you can transform your house into a water/sewer and power-independent home. Add aquaponics, some chickens, goats and a veggie garden, and you are then completely independent, but that is for an entirely different article. Alternatively, if you have greater access to capital, you could purchase a $1 million block of land and build a $600,000 house. The key is getting that formula right for your goals and your budget.

Step 2: Securing Your Owner Builder License

Before you can start building in QLD, the QBCC states that you need obtain an owner-builder license. This section explains the licensing process, including eligibility criteria, necessary documentation, and the educational courses required to prepare you for your project.

To secure your license, you will need the following:

  1. An address: Meaning, a block of land that you own, that you intend to build on. This will then be linked to the license once you attain it
  2. You need to take an owner builders course. Simply look up owner builders courses online and a myriad will appear. They can all be completed in your own time and can be generally completed in 1 day if you set aside the time and remove all distractions.

Keep in mind that you may only apply for your owner builders licence once every 5 to 6 years, depending upon the state. QLD for example is 6 years, and NSW is 5 years. Having said that, if you are owner-building as a means of long term wealth creation, then completing this cycle every 6 years, could over an 18 to 24 year period, create significant wealth.

Step 3: Designing your dream home

Designing your house is one of the most exciting parts of the building process. This section offers advice on how to approach designing your home, including considering the orientation, layout, and energy efficiency. It also touches on how to work effectively with architects and designers to bring your vision to life. There are many factors to consider when designing your house. We will focus in on the factors that are the most critical to owner builders.

Key considerations:

  1. Size: Size is important for several reasons with the key reasons being project complexity (the larger, the more complex), cost in so far as it relates to affordability and to the concept of either under or overcapitalising.
  2. Complexity: Remember, you are building this house as an owner builder, which probably means it is your first housing project. With that in mind, aim to keep things as simple as reasonably possible.
  3. Orientation: Given the nature of the world we live on and in, and QLD being a warm state, a north-facing home is always recommended by architects. This orientation capitalises on the movement of the sun, ensuring that the home is warmer in the morning and cooler in the afternoon.

If you are struggling to come up with a design, or know what you want and need your vision brought to life, click here to engage our Design Hauz.

Chapter 4: Securing Your Permit to Build

With your design in hand, it’s time to secure a permit to build. This chapter outlines the process for obtaining building approval in QLD, including the documents you’ll need to submit and how to ensure your plans comply with local regulations and codes.

To secure your permit, there are a number of steps, and a number of professionals involved. Below is a list of items, including the relevant professions. The list may not be exhaustive, but does cover the key items:

  1. Engage a Certifier – In QLD, building approvals are issued by a private certifier. These are private companies whose role is to collate all necessary documents and to ensure these documents combine to comply with the local building rules and regulations. The certifier, after being engaged, will issue an RFI (Request For Information) document. This document will contain a detailed list of every document they need to obtain in order to secure the certification. For this reason, engaging the certifier is ideally the first step in the process, as it ensures there are no surprises down the road, whilst also minimising the timeline to secure the permit to build. Click here to deep dive into our post about the role of the certifier. 
  2. Soil tests – Used primarily by the engineer for the foundations, soil tests will you with a soil report, which indicates primarily, the soil type.
  3. Architectural plans (floor plans). These are completed by an Australian licensed architect, or at the very least, completed by an architect from anywhere, and then reviewed, amended where required, and then signed off as approved plans by an Australian licensed architect. Plans can also be produced by the builder (ie a residential licensed builder, not an owner builder) on the condition that the builder is the builder that then completes the project.
  4. Site architectural plans – These are comprised of floor plans with elevations, placed on your actual block, showing the precise location of your house on the block.
  5. Engineering plans – The engineer will take the architectural plans and the soil tests, and produce engineering plans, including items such as: Footing plan, floor framing plan, roof framing plan, bracing plan, and load bearing stud details. This document serves as a critical guideline for the construction team
  6. Site survey – A site survey may need to be carried out to precisely show the location of the house in relation to the boundaries, services such as stormwater, power lines and sewer lines.
  7. Energy efficiency report – Completed by energy efficiency specialists, the energy efficiency report, or the EER for short, will detail items such as glazing (for example, the amount (SQM) of glass dictates that double glazing be required), insulation levels (R values), any shading required, window tinting, etc. The ERR provider will usually review the architectural plans and make recommendations accordingly. For example, your windows and doors schedule will be on your architectural plans. The orientation of your house (north-facing vs east-facing for example) will determine their recommendations.
  8. Bushfire report – Completed by a bushfire specialist provider, the bushfire report will provide you with a BAL (Bushfire Attack Level) rating for your block. According to Bushfire Environment Management Consultancy (BEMC), Several elements play an important role in determining your property’s BAL rating:
    1. Proximity to Bushfire-Prone Vegetation: The closer your property is to flammable vegetation, the higher the risk. This proximity factor is important as it directly affects the likelihood of ember attack and radiant heat impact during a bushfire.
    2. Topography and Landscape: Slopes and hills can influence the speed and direction of bushfires. Properties located on or near slopes may face increased risk due to the uphill movement of fire, which can intensify the fire’s behaviour and impact.
    3. Climate Conditions: Areas with hotter, drier climates face a higher bushfire risk. These environmental conditions can create a more conducive environment for bushfires to start and spread rapidly, increasing the overall threat level.

Click here to deep dive into our BAL Rating post. 

Chapter 5: The Take-Off List

A take-off list is essential for planning and budgeting. This section explains how to create an accurate take-off list that includes all materials and quantities needed for your build, helping you manage costs and avoid over-ordering or under-ordering.

Construction always costs more than we think it will. This is a combination of not allowing for every single detail (every screw, nail, all the hidden materials you can not see in a completed house, such as insulation etc), not allowing for wastage, waste disposal, contractor delays, and more. With this in mind, let’s introduce some key concepts, that had we known when we started, would have resulted in far less financial pain:

  1. Wastage: Let’s take tiling for example. If your bathroom has 20sqm of floor and wall space requiring tiles, you will likely require 24-25sqm of tiles, to allow for of-cuts. The same will apply to many materials.
  2. Grouped materials: Take internal walls for example: If you are installing gyprock walls, not only will you need to factor in concept 1 above (wastage), you also need to factor in the ancillary items connected to installing gyprock, such as gyprock compound, stud adhesive, nails or screws, metal corner beads. You also require the walls to be insulated, so an insulation material such as batts, will need to be factored in the same volume (ie same square metres)

Need help creating your take-off list? Click here to get access to the Mod Hauz estimating and quantities software.

Chapter 6: Selecting & Managing Trades

Choosing the right tradespeople and managing them effectively is crucial to your project’s success. This chapter provides insights into finding, vetting, and hiring skilled tradespeople. It also offers strategies for managing timelines, ensuring quality workmanship, and keeping communication open and effective.

  1. Get 2 to 3 quotes. There are some great platforms these days for generating real-time quotes from several skilled trades very quickly.
  2. If the contract value exceeds $3300, ask them for a contract
  3. Inspect their work for defects. If you do not know how to look for defects, consider engaging a retired builder with some spare time to come and take a look at each stage as it is completed. It may cost an additional $1,000-$2000 but may save you tends of thousands down the road.

Chapter 7: Tracking the Project in Real-Time

Staying on top of your build’s progress is vital. This section introduces tools and techniques for tracking your project in real-time, including software solutions and practical tips for keeping your project on schedule.

Now while you are only completing one project, building a house is a highly complex process, with many contingencies, many dependants steps, and may steps within steps.

Click here to access the Mod Hauz pre-built owner builder process template, all in the cloud and ready to go. You can make subtle changes to customise the template based on your specific circumstances.

Chapter 8: Managing the Budget

Financial management can make or break your project. This section covers everything from setting a realistic budget to handling unforeseen costs, learning how to keep your finances in check, including tips for sourcing materials economically and negotiating with suppliers and contractors.

It is critical that you factor in every expense. This is where knowing the entire building process, and coupling that with tools such as estimating software, can ensure you do not grossly under-estimate your project.

There are 3 broad cost categories:

  1. House Construction Costs: This refers to just the physical house. This is the trap that so many people fall into when estimating the cost of constructing their home. Meaning, they assume this to be the only cost. Depending upon the size of the house, the house construction costs can sometimes be only just over half of the overall costs.
  2. Permit: These costs include all costs relating to securing the permit, such as architectural plans, engineering, certifier, land clearing etc etc. These costs can range from $20,000 to $40,000 depending upon house size and complexity.
  3. Site Costs: Site preparation, such as excavations, footings, septic, water connection, power connection, trenching, driveway, fences, grass, landscaping. These costs can range from $20,000 to $100,000+ depending upon block size, house size etc. Note that for the sake of these examples, and to illustrate the differences on costs between the physical house (as some smaller homes are transportable) we will include the cost of the slab/footings in this section rather than the House Construction Costs section.

So you have the cost of the house alone, plus the pre-construction and site costs, so 1 + 2 & 3. The cost of categories 2 & 3 can be significant and are often the cause of “surprise” to new builders. Let’s call the sum of 2 & 3.

A key equation that very people mention or even think about, is the ratio of category 1 costs (ie the house) to the sum of categories 2 and 3. This becomes more relevant the smaller the house is and if often where tiny home builders/buyers, where the ratio of 1 to 2+3 is in some cases, almost 1:1. For example, the cost of a 12m x 3m modular home may be $100,000, but when all of the costs are 2 and 3 are added, the total cost could be as high as $200,000. So with this in mind, if you are planning to build a primary place of residence as an owner builder, it would be financially wise to build larger rather than smaller, to drive down your overall cost per square meter. When we say larger, we would typically expect to see the cost per square meter start to decrease significantly as the house size exceeds 100sqm. Note that these numbers become different when considering the construction of a granny flat, as items such as grass, fence, driveway, power connection, water connection etc, already exist.

Chapter 9: Securing the Occupancy Certificate

The final step in your owner-builder project is obtaining an occupancy certificate. This chapter discusses the inspection process, the criteria your build must meet, and how to address any issues that might arise during the final inspection.

In QLD, the final inspection certificate (form 16) leads to form 21, which is the occupancy certificate. If during the inspection, there are no noteworthy defects, the certifier will issue a form 21, which then gives you as the owner builder, the right to occupy (aka to live in) the house. Now it is time to celebrate!

Conclusion

Becoming an owner-builder in QLD is a significant undertaking, but with the right knowledge and preparation, it can also be an incredibly rewarding experience. Furthermore, with the right advice & guidance, you can avoid making 1 or more of the top 10 mistakes made by owner builders. This guide provides the foundation you need to approach your build with confidence, ensuring a smooth process from start to finish.

Whether you’re dreaming of a cozy cottage or a sprawling estate, your path to creating your ideal home starts here. With careful planning, a clear vision, and a bit of perseverance, you can successfully manage your build and enjoy the satisfaction of living in a home that truly reflects your desires and efforts.

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