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Conserve cash and get ready to build your house

To conserve cash, and to maintain a healthy cash flow, is critical to bringing a construction project in on budget.

Developing a budget for a new home

Our own situation is likely somewhat unique, but other owner builders should be able to get some ideas applicable to their own situation.

conserve cash by living on site

This will be our home for awhile

We were not able to sell our current house, so we have rented it in order to cover the expenses of ownership. This frees a little more cash for building. Not selling our house has reduced the money available for building, but in our case, not critically. Sometimes it is good to be retired, and have a regular fixed income.

Renting your house can conserve cash

This is the house we rented out

The weather is getting better everyday. It will soon be time to get down to the nitty gritty of construction. There is still a lot of snow on our property, but it should be clear in a week or so. Possession date on our house is the end of next week, so we are packing up.

To conserve cash, we have decided to live in our motor home while we are building. We have electricity and, perhaps we can get water from our neighbors until our own is dug in. We will have to rely on our cell phones for now. We already have mobile internet, so we are well equipped. Living on site will save considerable on travel expenses. We are hoping the weather will warm enough that moving into the RV will not be too uncomfortable. If necessary we can move to a motel for a bit, but that uses up cash.

We are lucky to have a ready built garage on our site. That should give us enough storage, barely. It is already half full with construction supplies. On site storage is very convenient, and I would advise anyone to build your garage or storage shed first. If none is planned, an alternative is to rent a container for a few months. If you do not have your own truck, or utility trailer, you may need to rent a waste container for construction debris. Remember to budget for these incidentals.

An inside view of the motor home

An inside view of the motor home

Our RV is an older motor home. It had broken down on us a couple of years ago, and because we were just leaving for the winter, we bought another. Our plan was to fix the older one and sell it. Our plan didn’t work, so we sold the newer one instead. The older one is very nice and comfortable. It is just not quite so roomy. We will be setting it up, more or less permanently, for the summer.

The foregoing illustrates that it is always necessary to have back up plans for when things don’t happen exactly as you like. Luckily for us, the backup plans worked. Things could have got a little tight if none of them had.

sold this motor home to conserve cash

This is our building lots as of three weeks ago, We sold this RV.

We have still not received our development permit. It is needed before we can apply for building permits. With a little luck, it will arrive soon, as time is starting to get a little short. Delay, however, often seems to be a normal part of the process, so it is wise not to be too impatient.

Since we are not using any financing, and there are no other critical reasons for hurry, this will not have a negative effect on cash flow. It will give us time to think of other ways to conserve cash.

When we have our development permit, the next step is to dig in the water and sewer services, and to do the excavation. The contractor we chose for this had promised to come and have a look about a week ago. As I said, delay is normal. I guess I will have to call him again.

I have heard it said that patience is a virtue. In this process it is absolutely essential.

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Planning for savings

 If you are trying to build, at the lowest possible cost, there are many considerations and little tricks, that can be incorporated at the planning stage.

Surveyors cost money. If there is a little leeway available on set backs, and you are confident of the location of your properties perimeter, you may not need to hire one. Of course, your lender may demand that you have a survey, or at least title insurance, at some point. You must be certain that you are not encroaching on neighboring properties, or that you are not violating municipal setback rules(consult the municipal land use bylaw)

Arm yourself with a subdivision plan, a long tape measure, and a transit, if one is available and you know how to use it. Use a good metal detector, and find at least two metal survey stakes nearby. There should be one on each corner of each block, but are not necessarily still there. Do not remove or tamper with these. You will be breaking the law. The rest is all accurate measuring, and determining angles, that correspond to your subdivision plan.

If you are on a large acreage, then none of this may be necessary, as the leeway can be large..

If you are in a subdivision with irregular shaped lots, it is better to hire a surveyor as things get pretty complicated. Newer subdivisions may already have stakes on the corners of your lots. Just be certain they have not been moved.

Take great care to avoid expensive changes in the future.

Try to keep your plan shape as close to a regular rectangle as possible. Every little jog, or irregular angle, adds to your cost per square. Cantilevers and odd window sizes also add to cost, and may make a home more difficult to insulate or seal.

The use of roof trusses, is a common and excellent building technique today, but their cost can get pretty high on long spans. It is cheaper to add length, and an extra truss or two, for more square footage.

Avoid long heating or cooling runs, they can be expensive, and are difficult to balance.

The advent of PEX (cross-linked polyethylene) and ABS (Acrylonitrile Butadiene Styrene) pipe has lowered the cost of long plumbing runs considerably, but it is still a factor. Pretty easy to see why it is always referred to as ABS.

Try to utilize heating equipment that does not require a chimney. Chimneys are expensive, steal space, and limit where heating equipment may be placed. They also require holes through floors, ceilings, and roof that may be difficult to seal well. They are always a source of heat loss. I do not advocate unvented gas fireplaces, as I think they could possibly be dangerous. Choose a direct vent model instead.

Sheet goods for construction are supplied in standard sizes. Sheathing is almost always 4′ x 8′ (1.219 x 2.438 m) . You will have less waste by planning to keep the length of walls to multiples of 4′.

Drywall is supplied in various lengths, but the norm is 4′ wide, and from 8′ to 12′ long. Other sizes may be more expensive. Use sizes that avoid butt joints, where possible, to lower finishing costs. Do not try to reduce waste by piecing in small pieces. Finishing is more time consuming, and therefore more costly than board. Careful planning, to achieve the minimum number of joints, will pay dividends in time and money.

Carpeting or vinyl flooring is 12′ and, sometimes 15′, in width. Seams may not be invisible and are a source of early failure. There will be less waste if a room is close to 12′ on one dimension. If rooms are large or irregular, consider hardwood, laminate, ceramic tile, vinyl tile, or carpet tile, to reduce waste.

 Complicated roof designs can be attractive, but are rarely necessary, and are always expensive, difficult to insulate and vent and more subject to leaks. There are other ways to add architectural interest, that are less problematic or can be added later, to avoid initial extra cost. The simplest and least costly roof is a straight gable. Every dormer, jog or angle added will add cost. Two or three in line gable roofs is not too bad, and may be useful on sloping ground, or with attached garages. The degree of increased difficulty is minimal. Gables at right angles add a little more difficulty in framing, and shingling, but is not to bad, if they add some other tangible advantage. I prefer to keep a house simpler, and add more dramatic landscaping, that can improve in appearance over the years.

One place you could spend a little more, is on roofing materials. Choose for durability and strength. Often the cost is not that high, to add considerable resistance to wind and hail damage, and to increase the lifespan by several years. The standard in our area seems to be 7/16” OSB (oriented strand board) over roof trusses on 2′ centers, topped by 25 yr. asphalt or fiberglass builders shingles. H clips are used between the trusses to reduce deflection. This is about the minimum required by codes.

I would suggest planning for 5/8” T&G (tongue and groove) OSB, topped with a shingle rated for at least 30 years. This sheathing will have much less deflection, will hold nails better, and does not add a great deal of cost. Granted, it is heavier when you are lifting it to the roof, and does add dead load, which may be offset by the extra strength. Some may advocate using plywood, but I see no real advantage over OSB, other than it is lighter in weight. The longer life shingles add considerable wind resistance ,and can have more interesting architectural profiles, again at very little extra cost. There are asphalt shingles available that are rated for up to 50 years. This may seem like overkill, but it is definitely an environmental advantage. Thats only half as many shingles going to the landfill every 50 years..

Reduce time and cost on your floor base by gluing it to the trusses, or floor joists, and nailing it with an air nailer using nails designed for the purpose. I suggest using more nails than normally required, and try to space them evenly. Screws are expensive and slow. Use a weatherproof construction adhesive applied with a caulking gun. Use the large size gun and tubes for least cost.

When painting, it may save you one coat, if you tint the primer. Use about ½ of the tint used in your final coat. Much more and you may miss spots when top coating.

“Time is money.” This old adage is certainly true today when labor costs can be very high. Use tools, and methods, that will speed construction as much as possible, within the limits of safety and quality. Long construction times also increase financing cost, although this is less of a problem while interest rates are as low as they currently are.

If you are hiring a contractor to do the building, then be extra careful with your planning. Contractors  love it when you want changes made after constuction has begun. They can charge you practically anything they want to make your changes.

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