HPH115 : How to budget for a house build – with Mark Brinkley
Feb 10, 2016
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Guest Mark Brinkley, author of Housebuilder's Bible, shares his experience on budgeting for a house build. Topics include challenges and fears of budgeting, finding affordable land, managing cash flow, being financially prepared, and budgeting considerations for a house build.
Having a detailed budget and sticking to it is crucial in a self-build project, considering factors like location, neighborhood expectations, and ancillary costs.
Balancing financial considerations with desired outcomes, conducting thorough research, and timely decision-making are essential for managing cash flow and sticking to a budget during a self-build project.
Deep dives
Understanding the Challenges of Self-Build
The podcast episode discusses the challenges and roadblocks faced in the self-build process, including the struggle to create an energy efficient home. The guest, Mark Brinkley, a housing expert and author, shares his personal experience of buying a building plot and navigating the planning process. He emphasizes the importance of having a detailed budget and sticking to it, while also considering external factors such as location and neighborhood expectations. He advises making realistic contingencies and being aware of ancillary costs like landscaping, fencing, and outbuildings. The episode highlights the need for thorough planning and analyzes the complexities involved in estimating costs accurately.
Factors Affecting Budget and Decision Making
Mark Brinkley explores how factors like location, site constraints, and plot size can impact budget decisions. He suggests considering the overall value of the neighborhood and whether building a house that differs significantly in size from the neighboring houses is a wise financial choice. He advocates for a holistic view of the project and emphasizes the importance of including all aspects, like gardens, garages, and outbuildings, in the budget. He discusses the challenge of balancing personal preferences and energy efficiency goals with the financial reality of building a house. Brinkley encourages self-builders to conduct thorough research, consult quantity surveyors, and diligently update their budgets as the project progresses.
Managing Cash Flow and Contingency Planning
The episode delves into the topic of managing cash flow during a self-build project. Mark Brinkley shares his experience of using his existing assets, including selling a property and investing the funds, to avoid cash flow issues. He advises having a contingency budget of at least 10% or more to account for unforeseen expenses and cost overruns. Brinkley also highlights the importance of timely decision-making and acting quickly in competitive markets, particularly in areas with high property demand. He emphasizes the need for self-builders to balance financial considerations with their desired outcomes and recommends regular budget tracking and adjustments as the project progresses.
Challenges and Pitfalls of Sticking to a Budget
Mark Brinkley highlights the challenges and pitfalls of sticking to a budget during a self-build project. He emphasizes the need for a detailed budget that accounts for all aspects, including pre-liminary costs, development costs, and external factors like planning permissions and regulations. Brinkley advises using a spreadsheet to meticulously itemize and track expenses, ensuring that costs are accounted for right from the planning stage. He also emphasizes the need for realistic expectations and the willingness to make compromises when costs exceed the initial budget. Brinkley concludes by encouraging self-builders to be aware of the complexity of the process and to seek professional guidance and advice throughout.
Freelance writer and author of Housebuilder’s Bible, Mark Brinkley, has been writing about how to build houses for over 20 years. Now embarking on a new self build project of his own he is aware of how terrifying the process can be! He shares with us some of his experience of how to create a budget, and what you can do to make sure you stick to it.