What details are typically included in a set of residential architectural plans. 

A typical file set of architectural plans for a residential building includes a variety of documents that provide comprehensive guidance for the design, construction, and regulatory compliance of the project. Here are the common documents you might find in such a set:

Site Plan:

Illustrates the layout of the property, including property lines, setbacks, easements, driveways, landscaping, and utilities.

Floor Plans:

Detailed drawings of each floor of the building, showing the layout of rooms, walls, doors, windows, stairs, and major fixtures. This includes plans for the ground floor, upper floors, and roof if applicable.

Elevations:

Drawings that depict the exterior appearance of the building from different viewpoints. This includes front, rear, side, and sometimes corner elevations, showing architectural features, materials, and proportions.

Sections:

Vertical cutaway views of the building that illustrate the relationships between interior and exterior spaces, as well as the construction details such as wall composition, insulation, and structural elements.

Details:

Detailed drawings that focus on specific building components or construction details, such as wall sections, window details, door assemblies, stair details, and foundation details.

Roof Plan:

Shows the layout of the roof, including slopes, ridges, valleys, dormers, vents, and drainage features.

Foundation Plan:

Illustrates the layout, dimensions, and reinforcement of the foundation system, including footings, walls, piers, and slab-on-grade details.

Electrical Plans:

Layouts showing the placement of electrical outlets, switches, fixtures, appliances, and other electrical systems.

Plumbing Plans:

Diagrams showing the layout of plumbing fixtures, pipes, drains, vents, kitchens, and utility areas.

HVAC (Heating, Ventilation, and Air Conditioning) Plans:

Layouts and diagrams illustrating the placement of HVAC equipment, ductwork, vents, and exhaust systems.

Landscaping Plans:

Designs for outdoor spaces, including gardens, patios, decks, pathways, and drainage features.

Specifications:

Written documents that outline the materials, finishes, construction methods, and quality standards for the project. Specifications provide detailed information about the products and techniques to be used in the construction process.

Schedule of Finishes:

Lists detailing the types and finishes of materials to be used throughout the building, including flooring, wall coverings, cabinetry, countertops, colours and fixtures.

Building Code Analysis:

Documentation demonstrating compliance with local building codes, zoning regulations, fire codes, and other legal requirements.

These documents collectively form a comprehensive set of architectural plans that guide the design, construction, and regulatory compliance of a residential building project and allow for accurate pricing and building time estimates.

Related Resources:

What makes a good Architect?

Open Plan Rooms – Mistakes to Avoid!

How to choose an Architect

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How to choose an Architect

Choosing an architect is a crucial step in the process of designing and building a home. Loving an architect’s work is not the only consideration when choosing a professional for your renovation or home-building project. Qualifications, experience, working style and whether you can picture yourself working well together during the design and construction period are all important factors to consider.

Here are some steps to help you find the right architect for your project:

  1. Define your needs: Before searching for an architect, be clear about what you want to achieve. Define your project requirements, including your budget, timeline, and any specific design preferences.
  2. Research: Look for architects who have experience in the type of project you are planning. You can start by checking online directories, asking for recommendations from friends or colleagues, or looking at local design publications. Even check out homes in your area that you like or ask your builder.
  3. Check credentials: Ensure that the architects you are considering are licensed and certified. You can verify their credentials through the licensing board in your country or region.
  4. Review portfolios: Look at the portfolios of the architects you are interested in. This will give you an idea of their style, expertise, and the types of projects they have worked on in the past.
  5. Conduct interviews: Set up meetings with the architects you are considering. During the interviews, discuss your project in detail and ask about their approach to design, their previous work experience, and their understanding of your vision.
  6. Consider communication and rapport: Pay attention to how well you communicate with the architect and whether they understand your ideas and concerns. A good rapport is crucial for a successful working relationship.
  7. Check references: Ask the architects for references from their previous clients. Contact these references to get a better understanding of the architect’s work ethic, reliability, and working relationship style – Were they responsive, did they work well with the builder, did their design fit the budget.
  8. Evaluate cost: Discuss the architect’s fee structure and ensure that it aligns with your budget. Be clear about what services are included in the fee and whether there are any additional costs you should be aware of.
  9. Understand the contract: Before finalizing your decision, carefully review the contract provided by the architect. Make sure you understand the terms and conditions, including the scope of work, payment schedule, and any provisions for changes or additional services.
  10. Trust your instincts: Ultimately, trust your instincts when making your decision. Choose an architect who not only has the necessary skills and experience but also understands your vision and is someone you feel comfortable working with throughout the duration of the project.

By following these steps, you can find an architect who is the right fit for your project and can help you bring your vision to life.

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How much impact can a home renovation have on your home value?

The increase in your home value due to renovations can vary widely depending on several factors, including the type of renovation, the quality of the work, the local real estate market, and the overall condition of the property before the renovations. 

While some renovations can significantly boost a home’s value, others might not provide as much of a return on investment. Here are some key points to consider:

Type of Renovation:

Certain renovations tend to provide a higher return on investment (ROI) than others. Generally, kitchen and bathroom renovations, adding a deck or patio, increasing sqm’s, and improving curb appeal through landscaping are considered to be among the renovations that can yield a good ROI.

Quality of Work:

High-quality workmanship, design and materials are important for maximizing the increase in home value. Cutting corners during renovations can lead to lower valuations and potential buyer dissatisfaction.

Local Real Estate Market:

The state of the local real estate market plays a significant role in determining how much value renovations can add. In a hot seller’s market with high demand and low inventory, renovations might have a stronger impact on value compared to a buyer’s market.

Initial Property Condition:

Renovations tend to have a bigger impact on homes that are in need of updates and repairs. If your home is already in excellent condition, the potential value increase might be more modest.

Over-Improvement:

It’s possible to invest too much into renovations than you’ll be able to recoup through a higher sale price. Be cautious about over-improving your home for your location, especially if it significantly raises your home’s value compared to other homes in your neighbourhood.

Location:

Location is a crucial factor in real estate. Renovations that are in line with the preferences of buyers in your area are more likely to have a positive impact on value.

Trends and Styles:

Renovations that align with current design trends and styles might be more appealing to potential buyers and can contribute to a higher value. If you are renovating to sell, stick to on trend but classic design choices, ensuring you appeal to a broad market.

Appraisal and Valuation:

Ultimately, the value increase due to renovations is assessed by real estate professionals and appraisers. Their assessment will be influenced by factors such as comparable sales, the scope of renovations, and the overall impact on the property’s desirability.

Return on Investment (ROI):

Different renovations have varying ROI percentages. Some might provide a ROI of over 100%, meaning you could potentially recoup more than the cost of the renovation when selling. Others might have a lower ROI.

It’s important to research and consider these factors before embarking on major renovations solely for the purpose of increasing your home’s value. While renovations can add value, they should also align with your own preferences and needs as a homeowner.

If you’re considering renovations specifically to increase your home’s value, consulting with a local real estate professional or appraiser can provide you with insights tailored to your area’s market conditions and the specifics of your property.

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How to choose a custom home builder

Choosing a custom home builder is a critical decision that will impact the outcome of your dream home. Here are some essential steps to guide you through the process:

  1. Define Your Needs and Budget: Before you start looking for a custom home builder, determine your specific requirements, preferences, and budget. Understand the size of the home you want, the features you desire, and any unique elements you’d like to incorporate. Having a clear vision will help you find a builder who aligns with your goals.
  2. Research Potential Builders: Begin your search by seeking recommendations from your architect, friends, family, or colleagues who have recently built custom homes in Sydney. Additionally, check online resources, home builder associations, and review platforms to gather a list of potential builders.
  3. Check Experience and Credentials: Look for experienced builders who have a track record of constructing quality custom homes. Check if they have the necessary licenses, certifications, and insurances required in Sydney. A reputable builder should be registered with the appropriate authorities.
  4. Review Portfolios and Previous Projects: Examine the builder’s portfolio of completed projects. This will give you an idea of their style, craftsmanship, and the types of homes they have built. It’s also a good idea to visit some of their completed homes if possible, to see the quality firsthand.
  5. Read Reviews and Testimonials: Online reviews and testimonials from previous clients can provide valuable insights into the builder’s reputation, customer satisfaction, and overall professionalism. Look for trends in the feedback to gauge the builder’s strengths and weaknesses.
  6. Meet with Potential Builders: Schedule face-to-face meetings with a few shortlisted builders. During these meetings, discuss your requirements, budget, and timeline. Pay attention to how well they listen to your needs and how effectively they communicate their ideas. A renovation or new build is a huge undertaking, you need both the builder and client need to ensure their values and expectations for the build process align.
  7. Ask for References: Request a list of references from the builder. Contact past clients and even trades and inquire about their experience with the builder, the construction process, and any issues encountered. A reputable builder should be willing to provide references.
  8. Check Licensing and Insurance: Ensure that the builder holds the necessary licenses and permits to work in Sydney. Additionally, verify that they have comprehensive insurance coverage, including public liability insurance and worker’s compensation insurance.
  9. Understand the Building Process: Ask each builder about their construction process, the timeline for completion, and any potential delays. A transparent and well-defined building process will help you understand what to expect throughout the project.
  10. Contracts and Warranties: Review the contract thoroughly and ensure that all terms, pricing, and project details are clearly outlined. Pay attention to warranty information for materials and workmanship.
  11. Communication and Customer Service: Assess the builder’s communication skills and how responsive they are to your inquiries. A builder who prioritizes clear communication and exceptional customer service is more likely to ensure a smooth building experience.
  12. Visit Ongoing Construction Sites: If possible, visit some of the builder’s ongoing construction sites to observe their work in progress. This can give you an idea of their construction practices and the quality of materials they use.

By following these steps and conducting thorough research, you can select a custom home builder who is best suited to bring your vision to life. Remember that building a custom home is a significant investment, so take the time to make an informed decision.

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Is it better to renovate or buy a new home?

Whether it’s better to renovate or buy a new home depends on several factors and personal circumstances. There is no one-size-fits-all answer to this question, as it largely depends on your specific needs, financial situation, and preferences. Here are a few considerations to help you make an informed decision:

Cost-effectiveness: Renovating your current home can be more cost-effective than buying or building a new one, especially if you only need to update certain areas of your current home. Instead of incurring the expenses associated with buying a new property such as real estate fees, moving expenses, potential higher borrowings and government buying/selling taxes, you can invest in renovating your existing home to meet your family’s changing needs. If you love the location and the overall structure of the house is sound, renovating could be the right way to go.

Location: Consider the location of your current home and whether it meets your needs. If you’re happy with the neighbourhood, proximity to schools or workplaces, and other community amenities, renovating might be a better choice. However, if you desire a different location, buying a new home could offer the opportunity to find a better-suited area.

Preserving sentimental value: Family homes often hold sentimental value and memories. Renovating your existing home allows you to preserve the emotional connection you have with the property. You can maintain the familiar surroundings, neighbourhood, and community that your family has grown accustomed to, providing a sense of stability and continuity.

Timeframe: Think about how quickly you need a solution. Renovations can be time-consuming, especially for major projects. If you have a specific deadline or need to move quickly, purchasing a new home might be more practical.

Personalisation and Customization: Consider how important customization is to you. Renovating allows you to personalize your current home according to your family’s preferences and lifestyle. You have the freedom to make design choices, choose materials, and create spaces that align with your unique tastes and requirements. Whether it’s expanding the kitchen, adding an extra bedroom, or creating a playroom for your children, renovating enables you to tailor your home to your family’s specific needs. On the other hand, purchasing a new home can provide you with a fresh start and the ability to find a property that already matches your desired specifications.

Future plans: Consider your long-term goals. If you plan to stay in the same area for many years and the current home has good potential, renovating could be a worthwhile investment. However, if you anticipate a significant lifestyle change or foresee the need for more space or a change in location in the near future, buying a new home that meets those requirements might be a better choice.

Enhancing property value: Well-planned and executed renovations can increase the value of your home. By upgrading key areas such as kitchens, bathrooms, or adding functional spaces like a home office or an additional living area, you can improve the resale value of your property. Renovations can also make your home more attractive to potential buyers in the future. So, if your happy with the location you are in right now, a renovation could be the best way to create a home you love while living in a location that works for you now. Given the value added, if or when it comes time to move, if you undertook a smart renovation chances are it will make you money later.

Ultimately, the decision between renovating and buying a new home depends on your unique circumstances, financial situation, and personal preferences. It can be helpful to consult with professionals, such as real estate agents, contractors, or financial advisors, who can provide insights based on your specific situation.

 

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CDC vs. DA: Which One Do You Need?

 

Overview of Complying Development certificate vs a Development Application 

What is a complying development certificate?

In New South Wales (NSW), a CDC refers to a Complying Development Certificate. 

A Complying Development Certificate is a streamlined approval process for certain types of residential construction projects that meet specific development standards set by the State Environmental Planning Policy (SEPP).

You will need to obtain a Complying Development Certificate for a residential construction project in NSW if your project meets the eligibility criteria outlined in the SEPP.

Complying Development is typically applicable to projects such as new homes, renovations, extensions, and certain types of demolitions.

Here are some general eligibility criteria to get a CDC in NSW;

1. Property zoning: Your property must be located in an area that is zoned for complying development. Different zones may have specific requirements and limitations, so it’s essential to check with your local council or a private certifier to ensure your property is eligible.

2. Development type: The proposed development must fall within the categories specified by the SEPP for Complying Development.

These categories typically include new homes, renovations, extensions, garages, sheds, swimming pools, and some demolitions. Each development type has its own set of requirements and limitations.

3. Development standards: Your project must comply with the development standards outlined in the SEPP and any relevant local environmental plans. These standards cover aspects such as setbacks, height limits, floor area ratios, building design, and environmental considerations.

4. Site-specific requirements: Certain site-specific conditions may apply, depending on the location and characteristics of your property. These conditions can include bushfire risk, flood-prone areas, heritage considerations, and environmental sensitivities. Compliance with these requirements is necessary for obtaining a CDC.

5. Consultation and notification: In some cases, you may need to notify and consult with neighbouring properties and obtain their consent or address any concerns they may have regarding the proposed development.

To obtain a Complying Development Certificate, you will generally need to submit a development application to your local council or a private certifier.

The application will need to include plans, specifications, and other necessary documentation to demonstrate that your project complies with the relevant development standards.

It’s important to note that the specific requirements and processes for obtaining a Complying Development Certificate may vary depending on the local council or private certifier you are dealing with.

It is recommended to consult with your local council or engage a professional such as a building designer, architect, or town planner to guide you through the process and ensure compliance with all applicable regulations.

What is a development application?

A Development Application (DA) is a formal request for approval to undertake a development project. In the context of residential construction, a DA is a formal application that must be submitted to the local council or an accredited certifier for approval before starting any building works.

A DA is required for any residential construction project that does not qualify for a Complying Development Certificate (CDC). A CDC is a streamlined development approval process for certain types of low-impact development, while a DA is a more comprehensive and detailed application that is required for more complex development projects

Examples of residential construction projects in New South Wales that typically require a DA include:

1. Multi-story homes

2. Home extensions that involve significant changes to the existing structure

3. Home renovations or additions that result in a change of use or increase the floor area of the dwelling

4. Development of multiple homes on a single block of land

5. Development in heritage or environmental conservation areas

6. Development that involves demolition of a heritage item

7. Development that requires tree removal

It is important to check with your local council or an accredited certifier to determine if your proposed residential construction project in New South Wales requires a DA.

The local council or certifier will be able to provide guidance on the requirements for your specific project.

In New South Wales, the DA process involves preparing and submitting a detailed application that includes plans, specifications, and other relevant documentation to the local council or an accredited certifier for review.

The application will be reviewed to ensure that the proposed development complies with relevant planning and building standards, codes, and regulations. If the application is approved, a construction certificate may be issued, which allows construction to proceed.

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What makes great residential architecture & Design? 5 fundamental elements to consider.

Residential architecture design is a combination of art and science, where creativity meets practicality. A great residential design not only looks beautiful but also enhances the lives of its inhabitants by providing comfort, functionality, and a sense of belonging.

In this blog, we will explore the key elements that make up great residential architecture design.

1. Functionality:

A great residential design should be functional and meet the needs of its inhabitants. This includes considerations such as accessibility, storage, and flow of space.

The design should also allow for flexibility in the use of spaces to accommodate changing needs over time.

2. Aesthetics:

Aesthetics play a crucial role in creating a beautiful and inviting living space. A great residential design should incorporate elements of style and design that resonate with the inhabitants and reflect their personal tastes and preferences.

This can include the use of colour, texture, and materials that create a warm and welcoming atmosphere.

3. Sustainability:

For the eco-conscious sustainability is a critical aspect of modern residential design. A great design should incorporate environmentally-friendly features such as natural light, energy-efficient materials, and renewable energy sources.

By doing so, it can reduce the environmental impact of the building and provide a more comfortable living environment for its inhabitants.

4. Context:

A great residential design should reflect its surrounding context and be in harmony with the local environment. This includes considering the local climate, landscape, and cultural influences. By doing so, the design can complement and enhance the existing environment rather than clash with it.

5. Innovation:

A great residential design should push the boundaries of what is possible and incorporate innovative ideas and technologies. This can include the use of new materials, construction methods, and energy-saving technologies. By doing so, the design can create a living space that is both beautiful and cutting-edge.

In conclusion, great residential architecture design is a combination of functionality, aesthetics, sustainability, context, and innovation.

By incorporating these elements, architects can create homes that are both beautiful and practical, and that enhance the lives of their inhabitants.

A well-designed home is not only a place to live but also a reflection of the inhabitants’ personalities and lifestyles.

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What is a finishes schedule?

When building or renovating a home you will require a document package.  

The document package may include information such as floorplan layouts, a detailed drawing package, elevations, structural engineering, electrical and plumbing plans, and a finishes schedule.

So, what is a finishes schedule and do you need one?

A finishes schedule is important when renovating or building a home because it outlines the specific materials and finishes that will be used in the project and includes details such as which room or location they will go. 

The finishes schedule is a critical part of a document package and is usually created by an architect or designer to communicate important information to the builder and other contractors involved in the project. 

What does a finishes schedule include?

Item location within the home, Product name, Colour, Finish, Size, Additional Comments & Supplier

The finishes schedule includes design and finishes choices such as: 

Flooring, wall finishes including coverings & trims, paint colours, fixtures & fittings, hardware, appliances, door and window styles, joinery, benchtop finishes and other decorative elements that will be used in the project. 

A schedule will also include information on the quality and standards of the materials, and technical specifications for items such as appliances, and plumbing and lighting fixtures. 

The more details included in the finishes schedule the better. 

Without a finishes schedule, there may be confusion or misunderstandings about the materials and finishes that are to be used in the project. This could lead to time delays, inaccurate quotes, additional costs, inefficiency and potentially missed details. 

Having a clear and detailed finishes schedule helps to prevent these issues and ensures that everyone involved in the project is on the same page.

A finishes schedule is a vital tool to ensure your design brief has been achieved. Once the build is complete it is an invaluable source for maintaining and doing repairs on your home as it includes information such as paint choices, tile selections details of suppliers, product codes etc. 

 

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Interior Design Trends 2023

Interior design is an ever-evolving field, and each year brings new trends and styles to the forefront. As we move into 2023, we are starting to see some exciting new directions in interior design that are poised to make a big impact. Whether you’re planning a home renovation, building a new home, or simply looking for inspiration, here are some top interior design trends to watch for 2023.

1. Bold Colours:

If you’re looking to add energy and drama to your interior spaces, consider incorporating bold, bright colours. Deep jewel tones like emerald green, sapphire blue, and ruby red are especially popular right now, and they can be used in a variety of ways to add visual interest to your home.

You may be brave and choose to use bold colours in places that are considered big fixture items such as the tiles in your bathroom or the joinery in your kitchen. But for those of us who like to be and flow with the trends a good place to add bold colour is with your accents, which may include cushions, throws a painted wall or a piece of furniture.

Whether you choose to paint an accent wall, incorporate these colours into your furniture or accessories, or use them in your artwork, you’re sure to create a bold and eye-catching look.

2. Sustainability:

With environmental awareness at an all-time high, sustainability is a major trend in interior design. More and more homeowners are seeking out eco-friendly and sustainable materials, such as organic cotton, bamboo, and recycled plastics, to use in their homes.

Purchasing furniture items and building materials at places such as marketplace or Gumtree is also incredibly popular. You are not only getting great items for a fraction of the cost, but you are keeping so many wonderful pieces from going into landfill.  By choosing materials that are environmentally responsible, you can create a space that is both beautiful and sustainable.

3. Textured Surfaces:

Texture is an important element in interior design, and 2023 is poised to see a major focus on textured surfaces. From natural materials like stone, wood, and woven fabrics to more modern finishes like concrete and metal, designers are incorporating texture in a variety of ways to create a sense of warmth and comfort in interior spaces.

4. Futuristic Lighting:

Lighting can have a big impact on the look and feel of your home, and 2023 is poised to see some exciting new lighting solutions. From LED lights that offer bright, energy-efficient illumination to high tech smart lighting systems that allow you to control your home’s lighting with your phone.

While smart lighting is high on everyone lists, the aesthetic of the light itself is also top of mind. As with textured surfaces, popular on the lighting front this season is concrete and clay finishes, both of which add warmth to a space and can be used in modern and more rustic traditional homes. Designers are incorporating innovative lighting solutions into their designs to create futuristic, beautiful, and functional spaces.

5. Wellness-focused Design:

With the ongoing emphasis on health and wellness, it’s no surprise that wellness-focused design is a major trend in interior design. From air purifiers and ergonomic furnishings to plants and natural materials, designers are incorporating elements that promote healthy living into their designs.

By creating spaces that support physical and emotional well-being, you can create a home that feels calm, comfortable, and rejuvenating.

6. Minimalism:

Minimalism continues to be a popular trend in interior design, and 2023 is poised to see a renewed focus on simplicity and functionality. Clean lines and a focus on the essentials are hallmarks of the minimalist look and this style is perfect for those who prefer a more streamlined, uncluttered look in their homes.

7. Artistic Accents:

Whether you’re an art lover or simply appreciate the beauty of handmade, artisanal pieces, artistic accents are a must-have in interior design. From statement artwork and one-of-a-kind sculptures to handmade ceramics and textiles, these pieces can add a personal touch and create a sense of individuality in your home.

Keeping with the minimalist approach the best way to show off your artistic accents is not to have too many, let your pieces shine and do not overfill your space. 

These are some of the top interior design trends to watch in 2023. Whether you’re drawn to bold colours, sustainability, textured surfaces, futuristic smart lighting, wellness-focused design, minimalism, or artistic accents, there are plenty of options to choose from. So, get inspired, start scrolling and start planning your home renovation, new build, or redecorating project.

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Cost Plus Residential Building Contract

As with any contract, they can all vary slightly depending on the terms set out and the contract used. This is a basic rundown of how a cost-plus contract works in residential construction.

Does the builder need to provide an estimate of the contract price? In short no, the builder does not need to provide an estimate. 

But understandably before you start a build most people would like to have a reasonably good understanding of what it’s likely going to cost.  

If an estimate is provided it must be understood that it is an estimate only, it is a rough guide as to what the end cost might be. 

There are many variables that can change the estimated cost.

Changes in material choices like going from a basic 300×600 white porcelain tile to natural stone, or un-foreseen build issues such as hitting rock in a dig or even changes in the overall design such as making a room larger will all affect the estimated costs provided. 

Some changes may come at a higher cost to you, but a big positive with cost plus is that you may have some cost-saving surprises or find cheaper alternatives along the way.

For example, your tiles may go on sale, or you find something just as nice but cheaper, you may have expected to hit a rock during your dig but don’t, therefore all these areas will come in less than the original estimated price saving you money.

When providing an estimate your builder should base the costs on the latest known material & labour costs and accurately define the current scope of works that are being estimated at that time, keeping in mind that if you make changes to the design throughout the build, it will likely cost you more in the end.

During construction, costs should be regularly reviewed and shared by all parties to avoid any surprises. 

How does a cost-plus contract work?

A cost-plus contract is when a builder or contractor obtains materials and services throughout the construction process and those costs are passed onto the owners with an agreed margin to cover overheads, administration, and profits. The hourly rate for contractors is usually disclosed and agreed upon prior to work beginning.

The current average cost-plus percentage is between 10-20%.

Example of Cost Plus Contract

Bob the builder calculates the building works for a particular stage as follows.

Subcontract Carpenter $5500 incl GST

Surveyor’s fees $1100 incl GST

Scaffold hire $1100 incl GST

Total $9900 Incl GST

Note: Bob can claim GST paid so excludes the GST from the costs of the building works.

Total amount owing excluding GST $9000.

  • Bob has also worked and managed the project himself for a total of 10hrs at $100 per hour excluding GST.

Total $1000 excluding GST

  • Bob has nominated a 20% percentage fee for his builder’s margin. 

$9000 + $1000 = $10000

$10000 + 20% = $2000

Total Builders Fee $2000

Bob must now calculate the GST for A,B and C

($9000 + $1000 + $2000) *10% = $1200

  • Total GST $1200

When Bob adds A, B, C &D together ($9000,$1000,$2000+$1200)

The total cost of the building work is $13,200

Why are cost-plus contracts a good idea in this current build climate?

How is a fixed-price contract different?

In a fixed-price contract, you will still pay for costs including labour, materials, equipment, and margin. With a fixed-price contract, the builder needs to place a contingency figure on the overall cost to cover sharp and unexpected price increases in materials and labour. Particularly in this post-COVID climate, it is essential that a contingency is in place. 

The contingency benefits both the builder and the client because no one wants to be halfway through a build and have their builder walk away, deliver a poor-quality home trying to save costs or have the company collapse because they are trying to finish a build in the red. Ultimately, with a fixed price contract you can still have variations in costs, but the risk lies with the builder hence the contingency.

With a cost-plus contract, no contingency is required because you are simply paying for what you use, both with materials and labour. With cost-plus the risk for the client is not tracking the budget accurately during the build and potentially getting ahead of yourself and spending more than you can afford. It is also vital to vet your builder, ensure they have good reviews, are professional and have great communication. 

 

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