Before embarking on a DIY project, read this
By Ballast Point director Mat Wilk
If you’re considering building your own home or embarking on a major DIY project because you think it’s a good way to make a profit or get ahead in the property market, there are some important things you need to consider first. Of course, anyone can build a house, just like anyone can start a pet grooming business, open a café, or begin practicing law. The resources are there online, in bookshops, and there are lots of online gurus ready to help, but you should think long and hard about it first. Like many endeavours, the risks in construction are substantial, and success is far from certain.
I remember someone telling me long ago that any idiot can build something, but to create something of quality, in a reasonable timeframe and within a budget, that’s the skill. This is very true, and experience is vital. In his book Outliers, New York Times-bestselling author Malcolm Gladwell claims that there is a ‘10,000 hours rule’ – a theory that the key to achieving world-class expertise in any skill, is, to a large extent, a matter of practicing the correct way, for around 10,000 hours. Although different things take different timeframes to master and 10,000 hours is very much notional and indicative, I believe the core principle that Gladwell puts forward is true. Mastery of anything takes time, and construction is no exception.
Fundamentally, humans are predisposed to overestimate their abilities, overstate their knowledge and (to our credit as a species) take on impossible tasks that sometimes succeed. You live in houses, so you know a bit about them, and you’ve seen how they work (unlike, say, communication satellites) and perhaps you fancy your abilities as a handyperson, so it’s logical to build your own, isn’t it? Unfortunately, I’ve seen things fall flat so many times that I must caution against over-optimism. You should take into consideration that the less experienced you are, the longer it will take, and the higher the risk of making mistakes. And potentially the less likely that anyone will be happy with the result – most notably a prospective buyer if you are building to make a profit. This point is important because people get a sense of quality and craftsmanship. They can see if a house is well-built, regardless of their own knowledge or experience. I don’t know anything about cars, but I can see that a Mercedes differs from a Mitsubishi in the way it has been crafted.
Where things can really go pear-shaped is when people don’t consider that one building is not like another, so the skill levels needed will vary dramatically depending on what you are building. Ironically, the place where most people miscalculate is when it comes to construction of buildings that look really simple – the minimalist designs that seem effortless and devoid of accoutrements, these are also the hardest to execute well – multi-factor skill and experience is required to deliver these in a coherent way. I guess it’s like building a car versus building a plane.
The key question you should ask yourself is: ‘what is the real underlying motivation?’ If you have a well-paid job and you think it’s because building your own house is a way to get into the property market, please think again. There may be other forces at work. You may want to build your own house because building is tangible, has a long tradition and your own house is something you can take pride in when you’re finished. I would even speculate that it’s a primal instinct to build shelter. But building your own home today may not make any more sense than quitting your job to hunt wild pigs to sell.
In my opinion, there’s limited financial return in pursuing this – it’s like a carpenter getting into currency trading online. When you factor in the time, risk and stress, it just doesn’t add up. But hang on, you’ve seen your friends generate substantial profits renovating their own house (although you haven’t seen them for years and they have less hair than you remember). You may look at your house as being a tax-free investment, so in effect you are not paying tax on the time you put into it. Beware of the narrative fallacy. How much of their new wealth would they have accumulated through rising property prices if they joined you for that cycle tour rather than working all weekend, every weekend, and simply hired a painter and a landscape gardener? An objective analysis of the hours put in may be surprising. Were your friends better off focusing on their careers, expanding their skillset, focusing on further education and mastery of their chose field rather than paying themselves $12 an hour to stick gyprock to walls?
I’m a licensed builder, admittedly university educated, but I understand very well how buildings come together and how they sometimes fail. I’ve done my time managing sites, and spent substantial hours on the tools to get my qualifications. But even though I have the experience and tools (yep, you should see my tools!), I don’t do any physical work myself now, nor do I manage a site. Why? Because I’m not a master of the craft the way my staff are, and because I’ve lost a lot of the skills that I used to have since focusing on running a construction business and managing clients and staff. And you know what else? I never really came close to achieving their level of mastery. Having spent that 10,000 hours building, my guys have mastered hanging doors, cutting rooves and flashing windows. I simply can’t do what they do, and it just doesn’t make sense for me to attempt it. It’s not what I do best, it’s not what I do well. I’m so much better off leaving them to carry out the master craft of building.
I’m not saying don’t build your own house, but if you do, do it for the right reasons and understand the costs and the risks. Even professionals lose money in property development every day of the week, and even legitimate professional builders make mistakes. Build your house because you want the challenge, you have spare time on your hands and enjoy playing with tools, but if you’re doing it because you think it’s a way to get ahead, well, that may or may not work out for you.