Step by step guide to home building or renovation: Part 1 - Buying residential land to build.
There are numerous positives to building your own home. You can decide on your own architectural style, size and layout, as well as being able to choose all your own finishes. Nothing is more important than the location of your land. Considering this will be one of your biggest investments. Decide on your own specific requirements beforehand. Things to consider would be; access to schools, community and travel time to your job. Here are some tips to help future homeowners with their investment.
Home building: Budget and finances
Your budget must be the determining factor when purchasing the land and considering the costs of building. After all, you can only spend what you can afford. Always bear in mind that you can always add on at a later stage and this can be taken in consideration at design stage. Expect to pay 3-4 times the stand price for your finished building for a balanced investment ratio (1:4 Ratio). Understand your Bank’s Loan to Value Guidelines i.e. on average, the major banks will finance 60% of vacant land or speak to OOBA the experts in home finance www.ooba.co.za. Know and understand all the costs involved in purchasing the land, surveying the land as well as all other associated planning and building costs.
Surveying – Get a new land survey to clearly define your property lines. Take into account the slope of the ground as this will directly influence the design, hopefully in a positive cost effective aspect. The type of soil is also important as the NHBRC have incorporated several items that are specifically related to soil. Whether the house is North or South facing is also important aspect that will be taken into consideration in design stage to make maximum use of the sun. Utilities – all land will need access to water & electricity connections as well as other services. Check the position of power lines and storm water drains. Understand the zoning restrictions. Visit your site often to get an idea of various factors i.e. run-off after heavy rains which will impact drainage and ultimate design of your house. Road Access – make sure your land is accessible especially to heavy machinery necessary to clear the plot and for trucks delivering building materials.
Regulations and variables
Be aware of variables which may delay transfer of the property. Consider your timeline and variables which may affect the building process. Home Owners Associations set the rules for use of the property, make sure you understand all necessary rules and requirements and decide beforehand if you can accept and abide by them. Before buying the land, be aware of preconditions attached to the sale i.e. a building contract, a time-frame within which an owner must build either imposed by your bank or a Home Owners Association.
Part 2 of this series of articles will cover financing, banks, the National Credit Act, bond calculators and the Consumer Protection Act.
The next course dates • Friday 16 May 2014 and Friday 20 June 2014
Written by: Michele Hawrylkiwicz from Buildzest.