Building a home takes time, money and effort, but the end result is worth it. There’s a lot to work out before those first bricks are laid, and having a firm plan of attack will set you up for success. From budgeting your costs to picking the right builder, here’s what to consider before building your home.
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Whether you want to make your own changes to existing plans or design from scratch, it's your call. Take the opportunity to choose what suits – from the style of bricks, tiles, carpets, taps and door handles to the position of the power points and lights.
When you buy an established house, you pay stamp duty on the purchase price, whereas when you build, you typically only need to pay stamp duty on the land price. This could save you a significant amount in upfront costs.
Building and then renting out a new home can be an effective way to invest. You can take advantage of better capital depreciation with a new home, as you can claim deductions over the maximum life of the property.
If you buy the right sized block and it's eligible for subdivision, you could build more than one home and start to develop your property portfolio. You could save time and potentially money by building more than one home at once, or by building in a certain position on your block to allow for future development. Each council will have their own rules and regulations about subdivision, so make sure you do the research.
When everything is new, it means less repairs and maintenance around your home.
Like with any home purchase, there are risks involved in building, such as:
Careful planning is crucial to help minimise the risks. It’s important to consider all your options, do your research and even seek out professional advice (like speaking to your lender and potential builder) before making a decision.
Where you build is your call – you could choose a block in an established suburb or a newly developed area, or even opt for a combined house and land package offered by developers.
Think future focussed when it comes to the number and types of rooms you want to build. Consider their features and what you’ll use them for down the track.
Remember, it’s not just the home itself that you’ll need to factor into your budget. You might have to pay demolition and council fees or rent for somewhere to live while you build.
Your builder will give you an idea of what it will cost to finish your home, but make sure you allow some money in your budget for unexpected costs as well as things like landscaping, appliances, window fittings and furniture. There's also home insurance to consider.
To save money, you might like to do some of the work yourself, like painting or putting down floor coverings.
Some local councils and government authorities have certain regulations that may impact your home design and landscaping choices. Abiding by council rules could save you money and hassle later.
Your choice of builder has a huge impact on your overall building experience, so it’s important to do your research. Visit a range of display homes and chat to a few different builders to ensure you’re getting value for money. Consider each builder’s quality of work, service and reputation, and make sure they’re licensed and accredited. To help you decide, it’s a good idea to talk to the Master Builders’ Association.
Before you sign your building contract, always read the fine print. If you’re not sure about something, ask your builder to clarify, or seek independent professional advice on what it means before you sign. You may be charged if you need to make changes during your build, so it’s best to be certain before you sign.
Building your home is a major investment, so once the construction process has begun, keep a close eye on it. At Bankwest, we’ll do the same, making sure that the building work is completed to match what you’re paying for. We do this through a construction loan. With this type of loan, funds are released in stages as the building work progresses, following periodic valuations.
When you take out a construction loan to help you fund the build, the money is released in stages as the building work progresses. This helps to make sure you're only paying for work that's been completed. What's more, you only need to pay the interest on your loan until your home's built. Making lower repayments during the construction period could mean you have some extra cash up your sleeve for things like expenses you didn't see coming or rent to stay somewhere while you're building. Find out more about construction loans.
We take care of all the BS (bank stuff) so you can access the knowledge you need to make informed decisions. When we write a guide or article, we take steps to make sure the information is relevant, accurate and most of all, helpful.
Construction loans are designed to help monitor the build – and you only need to pay the interest on your loan until construction is done. A construction loan can also be used to finance renovations.
Our Home Lending Specialists can help you choose one of our variable rate construction loans. You can talk on the phone, meet at a branch, or have a Mobile Lending Manager come to you.
