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Further Reading:

Building It On Your Own

I will come to live in Phuket on a semi permanent basis in about 18 months time and plan to buy or build a house. Is there a cost advantage in buying land and building rather than buying into an existing house? What are the potential problems I will face if I decide to build myself?

The answer to your question will depend very much on the type of house you are considering to purchase.

If your interest is in one of the lower or mid priced homes, say in the one to three million Baht price range, such as those found on the myriad new housing development on the east side of the island, then there will be no, cost advantage in building yourself. Those developers are in keen competition and have the advantage of economies of scale. Your only reason to consider going it alone at this price level would be if you wanted a very specific and unusual house layout or wanted a larger more rural site than is typical of these lower cost developments.

If on the other hand your interest is in a larger more unique home on a bigger land plot with ocean views, there will often be quite a potential for savings if you construct yourself. Indeed the saving on a house in the five to ten million Baht price range might be as much as 40%. These savings however will not come without some indirect costs attached.

The first to consider is that as you buy land and construct a house some of your money will be tied up in a construction site, when it could be earning interest in a bank - or put another way, you will not be able to use your new home during the construction period (typically about one year - although it can be done faster) and you may have to pay rent on another property in the interim.

You will need an architect to design your new home and file the planning approval request (these are not onerous for residential building), this is a given and already included in my estimated savings, but the next real consideration is the time that you (this is not in the architects standard brief) will have to spend managing and overseeing the project. This time can of course be reduced my employing professional construction managers, but for proper on site supervision and reporting, this can work out relatively expensive for just a single home and may well add 15% or more to your construction costs. The bigger the property the more viable this approach becomes.

While seemingly expensive (and potentially avoidable if you do this work yourself) the cost of a professional construction manager is often money well spent - the CM has the local knowledge to recommend and assist in hiring the contractors and suppliers you will need to complete the job, he will monitor quality control and be responsible to liaise with the architect and contractor if the design drawings need clarification or modifications. He will generally remove you from the headaches associated with building construction.

Even if you do have a CM, you will probably need (or at least want) to make periodic personal visits to the house in the making, so don’t overlook the additional cost of travel if you are still living abroad.

In conclusion even after you have borne all these factors into consideration, if you have a clear idea of what you want in a house (and are able to clearly convey these ideas to an architect) and you have located a site which you regard as special, it is definitely worth while to consider to buy land and build. If you take the full professional management approach, the savings may not be as great as they may at first appear, but at the end of the day you will get a brand new house of better than average local quality to a design that suits your personal needs.