Economics of DIY and Self Building

[Gus Potter]

Do my simple sums make sense?

 

A good self employed trades person costs taken on the UK average, if you do a deal say £250 - £300 a day. They need to run a van, replace their tools, maybe set aside to invest in their business,  have some insurance and need holidays so they need to earn enough so they can take time off. 

 

As a basic rate tax payer you need to earn say 23% more so that equates to 1.23 * say average £275 a day * 1.2 = £330.00 to pay the trades person.

 

Now just say you take twice as long to do the same quality of job, you'll make some mistakes.. cut timber wrong say at your own expense, so every day you work is a net gain of £165.00. But the more work you do the beter you will get at it and make less mistakes. 

 

Now if you put in one weekends work as a novice that is probaly worth having. Then you get the enjoyment of having done it yourself and that is hard to put a value on. If you scale that up to a self build you'll find that as per my previous post it equates to about a 15% saving.

[nod]

Great post 

 

The satisfaction of doing it yourself and knowing that your build will be there long after your gone 

 

Our granddaughter passes our previous build with our daughter most days and always says “Grandads house “ 

[marshian]

I mostly DIY because - with the exception of plastering and brickwork - when I've paid a tradesman to do work it's not been to a standard I regard as acceptable - that doesn't mean it's shoddy or terrible it's more that they want to get the job done in the minimum time and it shows.

 

Your maths works and makes sense but I enjoy the satisfaction of knowing

 

1. I did it myself

 

and

 

2. If I need to maintain/alter/replace something I know how it was put together (I tend to think of the access requirements at the fabrication stage and build it in)

[JohnMo]

9 hours ago, Gus Potter said:

equates to about a 15% saving.

The maths makes sense in money terms, in part. Most people will go to a builder and they will be the main contractor for all trades. They will be be adding a sum on for the project management scope, the internal invoicing etc. Materials will be obtained from from a single merchant. I had quotes to build our house from single contractors the prices were daft, I came in 100s of thousands cheaper doing what I did. That being build the parts I wanted too and manage sub contracts for the other bits.

 

But you will also put some time into finding the best price for goods. Example the best price on offer for PIR insulation was double what I paid for it. When you are buying a 145 sheets of 100mm PIR, that is a big lump of money saved, Had a similar issue with many items.

 

Plus is it a real self build, when a company builds it for you?

[ProDave]

This post just reinforces my view that a self build only makes financial sense if you do a lot of the work yourself.  I am sure if I had paid trades to do everything I would have spent much more building the house than it's market value when completed.

[garrymartin]

I find the problem with economics and market value generally has much more to do with plot prices than with how much work you do yourself. Inflated land costs often *lead* to a requirement to do more work yourself to make the sums add up.

[Stu789]

1 hour ago, JohnMo said:

...[Main contractor] will be be adding a sum on for the project management scope, the internal invoicing etc.

...build the parts I wanted too and manage sub contracts for the other bits.

...put some time into finding the best price for goods. Example the best price on offer for PIR insulation was double what I paid for it. 

...is it a real self build, when a company builds it for you?

Exactly the attraction for me embarking on self-build - I have the skills for PM & some of the trades, time to be on-site & source materials at best prices and attention to detail for workmanship, site condition/safety & invoicing/record keeping.

 

59 minutes ago, garrymartin said:

I find the problem with economics and market value generally has much more to do with plot prices than with how much work you do yourself. Inflated land costs often *lead* to a requirement to do more work yourself to make the sums add up.

But also don't want to toil for 000s of hours to see no market/resale value for that effort because the economics didn't stack up!

[SteamyTea]

19 hours ago, Gus Potter said:

Do my simple sums make sense

Maybe, but simple arithmetic is simple for a reason.

 

I suspect that most self builders have 'earned' the money through property inflation, inheritance and occasionally good fortune at work.

So it is not really correct to compare a tradesman's price with cash saving.

We occasionally see people join here with great plans, not enough money, buckets of enthusiasm, then vanish.

They usually work in IT management.

Arthur C Clarke once said, the advantage of electronic engineering over mechanical engineering is that, with electronics, you have easily available, standard parts, while with mechanical engineering, you can wait weeks for a simple casting, that then has to be machined accurately so that it does not fit.

[ProDave]

Doing a self build, it is hard to predict the financial position, until it's all done ant the dust has settled.  And often, timing is everything.

 

Those that followed our build will recall the original plan had been sell our rental properties which would give us a start, then sell the old house to finance completing the new one.  But the timing was wrong.  When we put the old house on the market the housing market here was moribund, still not recovered from the financial crash.  It sat on the market for 3 years with little interest along with many similar properties around here.  It became clear the only way to sell it would have been sell for give away / distress prices, which would almost certainly mean the old house sold for less than the cost of building the new one.  There was no way I was going to "pay" to downsize, which is what we were doing.

 

The saviour was an offer to rent it from someone ultimately wanting to buy it.  We agreed.  The rent income funded a slow build as you earn, and we completed the new one before the old one ultimately sold, which was an unexpected result.

 

The honest advice is don't start a self build until the finance is 100% secure, and it is not so if it relies on a property sale.  And if you don't do that, then you must be flexible.

[FuerteStu]

For me it isn't just the immediate benefits and cost savings.. 

 

I know that if something goes wrong in 5 or 10 years time, I'll have photos of the work done and a memory of where things are and there's a very good chance I can save myself a bucket in fixing it myself, or at the worst be able to point someone else to exactly where the issue is. 

[bmj1]

19 minutes ago, FuerteStu said:

For me it isn't just the immediate benefits and cost savings.. 

 

I know that if something goes wrong in 5 or 10 years time, I'll have photos of the work done and a memory of where things are and there's a very good chance I can save myself a bucket in fixing it myself, or at the worst be able to point someone else to exactly where the issue is. 

 

Exactly this. Case in point is I insisted on building my own networking rack. Last thing I want is to have to call someone else out every time I need to make a change or expand the system 

[Kelvin]

5 minutes ago, bmj1 said:

 

Exactly this. Case in point is I insisted on building my own networking rack. Last thing I want is to have to call someone else out every time I need to make a change or expand the system 

I have two network cabinets, one in the garage and one in the plant room. My other half looks at all this stuff in there occasionally and I can see the despair on her face. 😂 I’ve started writing a how to guide, just in case! 

[FuerteStu]

I have one 24 port switch in my plant room (cabinet with the consumer unit in the hall).. 

 

One day I might get around to labelling it all before I forget what codes I used for all the runs 😂

[Alan Ambrose]

>>> If you scale that up to a self build you'll find that as per my previous post it equates to about a 15% saving.

 

I think it depends on the circumstances a lot: if you have a well-paying day job, then it makes more economic sense to employ someone else at a lower rate. There's a NI saving as well, that's maybe another 20%.

 

I agree with the economics that says the builders get the crumbs (unless you're clever, say, at getting better PP than the plot was sold with). The landowners get the profits.

 

I have a mate who just does up houses by himself and only occasionally employees someone to help out. He's been doing that for maybe 20 years. I guess they live day-to-day on the wife's salary. A refurb takes 2-3 years. They live in the refurbed houses when they're done and then added to their rental / pension portfolio when the next one is ready. That's it. No employment taxes for him to pay, no capital gains taxes until they sell a rental property - so that's efficient tax wise . And I guess it suits him lifestyle-wise.

 

[Oz07]

I think it's all cyclical. We've been so long in the time when land prices are so high. I remember early 2010 you could haggle for prices with plots on open market and there was a lot of meat left on the bone for whoever built it out. Nowadays builders seem to be almost buying the work with the plots for sale on the open market. All that risk and capital tied up for 20 maybe 25% with all the time it takes and regulations to comply with. God forbid there was ever an accident with all this principle contractor and designer nonsense.

 

I'm sure it will go back the other way at some point. 

[Kelvin]

1 hour ago, FuerteStu said:

I have one 24 port switch in my plant room (cabinet with the consumer unit in the hall).. 

 

One day I might get around to labelling it all before I forget what codes I used for all the runs 😂

I have a 24 port patch panel (punching that down was fun!)  and two 16 port switches (one is POE) in one cabinet and an 8 port hub in the other. I’m a habitual labeller so everything is at least labelled and I’ve stuck a network diagram to the inside of each cabinet. 

[Nickfromwales]

When will folk realise that the patch panel is way ott.

Making off the cat6’s to RJ45 plugs and pushing those directly into the switch………works perfectly.

 

Less gin, more tonic, folks   

[Kelvin]

Some would argue that using cable in the first place instead of Wi-Fi is OTT. 
 

CAT6a cable is unwieldy plus I like to keep some length in the cable  just in case. It’s much neater with a patch panel as all the cable is in some trunking and into the IDCs at the back of the patch panel then some short patch cables connecting to the switches. Cheaper too as I use toolless RJ45 plugs for the cable ends I do make up (that still technically need tools to make up 😂) 

Edited July 23 by Kelvin

[SteamyTea]

How the (expletive deleted) did it go from an economics topic to tooling up CATs.

[JohnMo]

2 hours ago, Kelvin said:

have two network cabinets, one in the garage and one in the plant room

 

52 minutes ago, Kelvin said:

24 port patch panel

 

2 hours ago, Kelvin said:

other half looks at all this stuff in there occasionally and I can see the despair on her face.

I'm with your other half on this issue. We have cat5 points in all rooms, socket next to aerial, they go to simple 8 way switch unit, cost £18. Not sure what the complications add.

[FuerteStu]

55 minutes ago, Kelvin said:

Some would argue that using cable in the first place instead of Wi-Fi is OTT. 
 

😂

 

7 TVs in the house so far, 5 people.. if only 4 of them are streaming 4k that's one hell of a bottleneck on the WiFi. 

 

Hardwired TVs mean less issues with all the other 50 devices. 

[FuerteStu]

47 minutes ago, SteamyTea said:

How the (expletive deleted) did it go from an economics topic to tooling up CATs.

If you can't swing a few CATs, then we didn't selfbuild big enough! 

[Kelvin]

Reliability mostly. Everything that has an Ethernet port is connected via a wire rather than Wi-Fi. We have two printers for example (A3 and A4) that the other half uses for work. They are both more reliable with a wired connection. The Zappi charger is more reliable with a wired connection than WiFi which despite having a strong connection to the access point regularly lost connectivity with the MyEnergi server. Our network is slightly complicated by having Starlink in the garage in bypass mode and the router is in the house in the plant room. We also have several CCTV cameras around the place (hence POE)  which. I’ve separated that out into their own VLAN. Plus there’s all manner of hubs for this and that. I wanted to keep an eye on the water tank level as we’ve had the odd problem with the borehole control panel so have a probe in the tank connected to a hub etc. 

[Kelvin]

10 minutes ago, FuerteStu said:

 

7 TVs in the house so far, 5 people.. if only 4 of them are streaming 4k that's one hell of a bottleneck on the WiFi. 

 

Hardwired TVs mean less issues with all the other 50 devices. 

We have one TV in the house and one in the workshop although I use that as a monitor as my laptop screen is gubbed. 

[Kelvin]

58 minutes ago, SteamyTea said:

How the (expletive deleted) did it go from an economics topic to tooling up CATs.

Because the conversation was also about self-building being about more than just the economics of it which is marginal at best for a lot of folk that do it.