Expensive to Build in The USA? Not Even Close!

Hi Folks,
   Welcome back.

   We often hem and haw about prices, and how expensive things are, but if you lived in Switzerland, you might think differently about things! True, it's a beautiful country and has a reputation for delectable chocolate, but it also topped the list of the "Ten most expensive countries in the world to build", in a recent article.

   According to a story on InternationalEat.com, "Switzerland remains the most expensive place in the world to build new properties", with data pulled from the latest EC Harris report. Using UK prices as a baseline, construction costs in Switzerland are more than 25% higher than anywhere else in the world (the story adds that the "price of construction in Switzerland is 71% higher than in the UK"). Mathew Riley of EC Harris said that he was not surprised to see Switzerland and the Scandinavian countries as the most expensive places to build, since "high labour costs and the need to import materials are all combining to drive prices up."

   Taking a step back, Europe came in as the most expensive continent in which to build, with 8 European countries populating the Top 10 list. The other two countries were both Australia and Canada. The cheapest countries to build in? It was a tie between India and Sri Lanka (construction costs estimated to be 72% cheaper than the UK baseline).

   If you are a builder or a contractor, you have seen your profit margins get slimmer and the competition on the rise, and the results of this report point to the need for Western economies to, "start planning ahead now to guarantee access to the raw materials needed for future construction projects."

   As for North America, the report finds that the average construction costs in the US are around 10% lower than in the UK, however, as the economic recovery progresses, these costs are likely to rise.

   In terms of construction spending during August 2011, we were at $799.1 billion (Up 1.4% from July and almost 1% from August 2010). Public Construction was on the upside, at 3.1% above July, and more specifically, Educational construction and Highway construction both posted gains of 3.5% and 4.3%, respectively. Private Construction Changes were negligible to minor.

   Penny for your thoughts...

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #constructioncosts #Switzerland #Europe #UK #builder #contractor #constructionprojects #rawmaterials #public #private #educational #highway

Tips and Resources For Hiring Contractors

Hi Folks,

   Hope you're having an awesome week !

   If you have ever hired a contractor, you know that it can be quite time-consuming and sometimes quite difficult to find the right person. Today, we will be discussing some tips for hiring a contractor, as well as some resources to find contractors to hire.

   Debra M. Cohen of Home Remedies of NY, Inc. says that you should ask for the names and phone numbers of three to five customers for whom the contractor has completed a similar project in the past two years, as "This will make it more difficult for a contractor to “hand pick” only his best references. Call each reference and ask the homeowner what they liked and didn’t like about the contractor. Ask him if the final cost of the job exceeded his estimate and if he completed the work in a neat and timely fashion. Most importantly, ask them if they would hire the contractor again for another home improvement project."

   Cohen suggests that you contact your county offices to, "research what credentials are required for home improvement contractors in your state and in your county.", as well as ensuring that the contractor has a minimum of $1 million in general liability insurance. Cohen reminds us to, "get a copy of his license and insurance for your records." Allen K. Bahn, President of American Consulting Services, Inc., similarly states that you should, "First check the requirements of the state and local authorities and these include training, Bonding, Workmens Insurance, (and) General liability". Bahn says that many people have been, "duped by unreliable contractors giving them bogus papers. Yes these contractors can and are prosecuted but that does not solve your problems.", and says that, "in fact you have a full and total liability for all the actions undertaken by your contractor and subs."

   Jody Costello, creator of ContractorsFromHell.com, say that it is important for you to, "Conduct background checks that include uncovering relevant lawsuits, any small claims court filings, mechanics lien history, credit standing with suppliers and licensing history if required by your state." Costello also says that you need to conduct a thorough interview, "asking key questions around customer care, problem solving, safety issues, working with city inspectors, knowledge of code compliance, who will supervise your project and how much time they’ll spend, and how they handle unexpected surprises."

   Cohen also points to that fact that it is important to see how your personalities mix, since, as she questions, "Are you the type of person who likes to be involved in every decision or do you prefer to “leave your job to the experts”?". Cohen says that your contractor’s personality can make or break the success of your project.", as there are some contractors that, "prefer not to be micromanaged and others who want the homeowner’s input on every aspect of the job."

   When it comes time for an agreement, make sure that you get it in writing, says Cohen. "If your contractor is hesitant to put the details of your job in writing, I would be concerned.", says Cohen. She also suggests that you ask the contractor to, "document details about the type of materials he plans to use, his anticipated start date, project schedule and completion date." Bahn also suggests an, "exit clause for you.", so you can be in charge and protect yourself. Costello says that you need it in writing that, "you require Lien Releases at the time of each payment (in writing as part of the contract) from all subs/suppliers for work performed and material supplied to date." She also suggests having the following in writing: thoroughly written specifications sheet, start and stop dates, hours of working time on your project, days- Monday through Friday, hours such as 7am – 3:30pm.

   Cohen says that most contractors, "will request a down payment ranging from 10-30%. The remaining balance will be paid in increments in stages throughout the remodel and a 10% balance should be held until the final details of the project are completed to your satisfaction."

   Additionally, Bahn advises that, "the inspectors come when only when you are there. Many an city inspectors take bribes overlook violations. Even if they are punished ,you as the owner are liable for the problem."

   Now that you have been armed with how to weed out and find the right contractor for your project, where can you find them?

   Costello refers to hiring the right home renovation contractor as an “inside job”, and one that requires, "thoughtful research on the part of the homeowner. Doing the “behind the scenes” work before you even think about finding a contractor is key to a successful remodeling project and a positive working relationship with your contractor."

   Cohen suggests using a referral from a local "Homeowner Referral Network (HRN) business", since they refer a. "full stable of contractors from painters, plumbers and electricians to General Contractors, moving companies and architects. HRN's verify each contractor's license and insurance based on state and county requirements, check contractor references, work only with well-established contractors, and follow through every referral until project completion. Referrals are provided free of charge to local homeowners and contractors can't pay a fee to be listed or referred. There are currently more than 300 HRN's operating nationwide." She also says that, "When looking for a contractor, many homeowners ask their friends and family for recommendations but in my experience, getting a contractor referral from another trades person is far more reliable."

   Costello says that, "The fact is that home improvement has consistently ranked at the top for consumer dissatisfaction and fraud according to various consumer agencies. With little accountability on the part of the home improvement industry, it becomes the homeowners’ responsibility to get educated and informed so they don’t become a victim of an unscrupulous contractor."

   Hopefully, these have been some helpful tips for you. A great place to find a contractor is in our Home Services section, and you can offer your Home Services there as well.

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #contractor #HRM

Valuable Real Estate and Construction Industry Associations

Hi Folks,
   Friday has come upon us quite fast this week. The sun is shining and it's cool out. Fall is here. Hooray !

   Today, I'd like to discuss the mortar that holds the Real Estate and Construction industries together, and that would be the industry associations. These groups and organizations allow the professionals from all sectors and niches of the Real Estate and Construction industry to mingle amongst each other in order to create better opportunities that drive the housing market.

   The first one that I would like to mention is the Building Trades Association (BTA), which is, as they describe on their website, "made up of thousands of companies involved in all phases of the building and construction industries". Additionally, they have an invaluable Contractor Directory, which can prove as vital to anyone in our industry. They charge a nominal fee for full access to their services and registration.

   Jessie Sidhu, a multi family investor and Real Estate Broker, names the Apartment Association as a very valuable resource, stating that, "They keep you informed of all latest rules, regulations, laws (local, state & federal) pertaining to landlords and renters", as well as, "provide insights into the industry/current trends along with local vendor resources and more".

   Raj Persaud, a Sales Agent and Business Development Manager for Manhattist Inc, cites the National Real Estate Investors Association (NREIA), Multiple Listing Service (MLS), and the Real Estate Board of New York (REBNY), as his most valuable industry associations.

   Persaud says that the NREIA is a, "very sophisticated association but you can tell that they do very real work which has very practical implications for the industry", and that he thinks that, "they are the most future-forward in fore-seeing approaching challenges and mobilizing investors and professionals to address them".

   For the MLS, Persaud says that, "to just be a part of this service is incredibly convenient and instantly enhances your company to marketing 2.0. They make a search for any property in NYC with open listings very easy and at your fingertips". In discussing the REBNY, Persaud says that is serves as the, "real backbone to the property market here in NYC. Their unity of professionals brings real hope to the industry and they are always promoting better standards, including energy efficiency in buildings across the state. This is the kind of force we all need".

   Have we missed any associations that are valuable to you? Please comment and let us know.

Have a Great Weekend, and Happy Rent-to-Owning !

The Home Building Process, Part 2 of 3

Good Morning,


   Today, we will be covering part 2 of our 3-part series on the Home-building process. In part 1, this past Wednesday, we took a look at the process from the first meeting between a future property-owner, the building company and general contractor. For a different perspective, now we will look at some additional tips from both a property manager and from an interior designer.

   From the angle of a property manager, we spoke with Blake Appleby, President of Cornerstone Property Management, Inc. in Colorado, who has almost two decades of experience managing large mountain homes, and he provided some additional pointers to be aware of during and after the process.

   Primarily, Appleby states that it is important to give consideration to where snow or rain will shed from the roof, to avoid snow, ice, or rain shedding on entry ways, decks, in front of garage doors or other areas that might interfere with basic usage of the home, as it can result in, "snow removal nightmares and added expense." He also reminds us that, "Complex roof designs can lead to ice build up and subsequent roof leaks in winter months."

   In addition, Appleby suggests using climate appropriate building materials on the exterior home, which will also save time and money (taking into consideration the, "temperature fluctuations, amounts of moisture, harmful direct sunlight and any other factors that might cause the exterior to deteriorate more quickly than normal."), and additionally, to install a leak detection system.

   As far as the interior of the home, he suggests keeping the use of technology as simple as possible, and while the latest gadgets are "impressive in the showroom", home integration can be very complex. Appleby suggests to, "stick with simple dial thermostats for climate control.", and to avoid computer controlled lighting.

   In keeping with the interior of the home, we spoke with Jo-Ann Capelaci, an interior designer with Colours & Concepts Interior Design, in California. Capelaci recommends that you, "Ensure that the interior design reflects the style of the outside of the home.", and to select all interior finishes, i.e. flooring, tile, cabinets, paint, etc, and to "produce a book to include all specifications". She suggests doing this before construction begins, if possible.

   Additionally, Capelaci suggests preparing the flooring plan, tile floor plans and elevations, electrical and lighting plan and furniture plan, select the furniture, window treatments, lighting and accessories, and to prepare the budget for these items and purchase them so that when construction is complete, these items are all ready. She suggests to, "enlist the help of a design professional, even if it is to confirm your choices and make recommendations.", since, "Designers truly do see things in a different way and assist clients to do things they might not have even known were possible"

   In closing, Appleby added another fantastic tip - To make sure that you "have records of the make and model of boilers, HVAC units and any other critical components in the home.", because if you need a service call, this can limit the amount of time with no heat, hot water etc. Additionally, Appleby adds that it is important to keep up with "basic preventative maintenance", such as cleaning gutters, dryer vents, changing HVAC filters and having your heating and cooling systems serviced once a year.

   We hope these tips have been helpful. Tune in on Monday for the final part of this 3-part series, where we will speak with some people who have gone through the actual process of building their own home, which will provide a very unique perspective for those of you interested in doing so.

Have a Great Weekend, and Happy Rent-to-Owning !

Examining the Home Building Process, Part 1

Good Morning,


   At the request of our readers, we are beginning a 3-part series on the Home-Building process. We always receive a lot of questions about how the process actually works, and we have made contact with some solid resources to bring you some pretty good information that should be incredibly useful to you.

   David Spetrino of Plantation Building Corp (in Wilmington, North Carolina), uses a 10-step process that brings buyers from start to finish. The first step involves meeting their potential customer to identify their wants and needs (this is where you describe your custom dream home and the ideal “move in date,”). They need to know, for example, if you enjoy entertaining in your home, if this is a primary home or a vacation home, and if you would you describe your ideal home as formal, casual, or a hybrid of both styles. They will also ask you if you have any “green” requirements (environmentally-friendly)

   Next, they will discuss where the home will be located. If you have a lot ("home site") already, that's fine, and if you provide them with the address or community of choice, they will do the research regarding setbacks, zoning, architectural standards, etc. After this, they move on to the professional service agreement, estimate preparation (where they collect bids from their trade contractors and vendors), and ultimately, the construction contract (which involves the construction schedule and your financing). Spetrino makes it a point to note that, "the bank that provides the construction financing may not always be the bank that retains your long term mortgage. You have likely provided your lender with tax returns and related financials. Your bank will want us to supply them with a copy of the construction contract, set of construction drawings, specifications and the budget."

   During this process, the General Contractor comes into play, and there are some pointers provided by Arlene Battishill, a licensed general contractor in Los Angeles. Battishill notes that any proposed home site must be zoned for residential use, and you will need an accurate legal description of the parcel, soil testing, and a structural engineer’s review of the architectural plans to determine if any special reinforcement will be required. Once a licensed general contractor (“GC”) is hired, cost estimates can be made, and once acceptable, the architect or general contractor will submit the architectural plans to the local government building department for evaluation. Once all changes are made and the building permit fees are paid, construction can begin.

   From this point on, Spetrino's company works out the full details, and then begins construction. They provide, "regular updates, photos, and twice monthly, a ‘cost report’ that tracks budget and schedule." Over the course of construction, sometimes changes need to be done, and these requests go into a written format, officially known as the ‘change order.’ Once the "Big Day" arrives, a thorough "inspection and orientation of your new home" is completed. After one month, they schedule a follow up walk through to make sure that you are completely happy, and they also schedule a one year walk through.

   Battishill notes some of the costs of the process, for example, purchasing the land, the fees paid to all of the required consultants, fees to the local government and then the cost of construction. She notes that financing should be obtained well in advance of construction, and to assume that you will need 25-50% more money than the budget calls for to ensure successful completion, as cost tends to overrun in the construction of new homes.

   Please join us on Friday for part two in this series, where we have some additional pointers and points of view from a Property Manager and an Interior Designer.

   Have a Great Day, and Happy Rent-to-Owning !