One of the largest risk items in any project is the construction phase. Not only is it the longest period you’ll spend working on a project, but it’s certainly the period where, financially, things can go either very well or very poorly.
Particularly when the market is busy, it’s hard to find the right builder that you want. It is important to do your homework to find the right builder who’s going to be the best for your project. I would always recommend off-laying your risk to the builder – go down the path of doing a design and construction contract with your builder. The design and construction contract is where the builder signs a contract with a developer and they are responsible for doing the detail construction design.
What you’ll find is that every developer has their own skill set. Some are amazing at finding land, some are great at getting council approval, some are amazing at selling. Most developers aren’t builders, so why would you want to try and take the risk and design your own project when you could bring in a reputable builder that you’ve got references on and that you’re comfortable with.
The most prudent way is to hustle the risk onto the builder. Get them to design the project because they know what they’re doing, and make sure that you stay very close to the process to ensure the integrity of the project is upheld. However, you should certainly give control to the builder for the design, get them to construct it so that you can lean on their expertise, their insurer and their staff to get the right outcome.
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