Of course, when you set out to construct anything, anywhere…sooner or later you have to think about money. The finances. How it’s all going to be paid for. You may be lucky, and rich. Perhaps you were left some money by a distant relative, or you had a winning streak at the bookies.
Or perhaps you didn’t.
For most of us, the cost of the project is very important, because we need to know that we can afford to complete that project and not leave it ‘hanging’ with 80% completed, because the money ran out and we can complete it only after working and earning some more.
Actually, that’s not unheard of in Thailand. Unforeseen costs, or optimistic financial planning can bring a project to a stop, and it will restart once the funds are again in place and the builders are available. It happens but it’s not really ideal.
No, you need accurate costings, a final contract price agreed with the builder, with no hidden ‘extras’ (see my section on the contract in pre-start paperwork), and a payments schedule all worked out, and most importantly, that you have enough money to fulfil the contract you are agreeing and signing. This is the same, if you are building in Europe or in Thailand – people need to be paid! And more importantly, the builder needs to trust you. This is why I said that you need to spend enough time on the plans, costings, contract and financial backing arrangements – you cannot skim over it.
For us, the build costs were in Thailand so the labour cost is a LOT lower that in UK. Added to that, some raw materials were also cheaper – here you need to go out and research those lower costs. Understand the cost of a metre of concrete. How much rebar is? Plumbing supplies. Wood. It may seem crazy but how does that saying go? ‘If you fail to plan, then you plan to fail’, and the other one, ‘knowledge is power’ is also very true in this context.
So, we had an idea, we turned it into plans, we spoke to several builders, and we got prices. We were able to break down the selected contract value into agreed, sequential stage payments which meant we did not have to find, say 25% of the contract value up front.
From my work in the Middle East, and with a foresight of the build to come, I started saving for it about 4 years earlier. No… I did not have a 4 year pre-build plan but I knew I was going to build at some point and a chunk of savings was going to help. We had used some of those savings to purchase the land, and the rest was used to start the stage payments. I also had an independent savings plan with my last employer which I knew was going to pay for the final stage payment (if you read the contract section, you would know that the last payment was intentionally larger as it included much of the builders profit, payable after the snagging list – go have a look if you have not done so already!)
Meanwhile I was still working and saving. Each stage was around 30 days and there were 10 stages, so I just had to find the stage payment on time. Using some savings and some earnings, I was able to make all 10 payments though a couple of them were delayed slightly due to money being moved around!
However you plan to do it, look at what you want to build, and get the all-important build contract costings. Then, and you must do this – honestly look and make sure that you can afford to do it. Don’t get swept up in the excitement of building a house, especially if accompanied by ‘encouragement’ from your better half (!). Don’t let your desire to build that dream cloud your judgement. Make sure you have the money, it’s as simple as that.
Now, what to do if it turns out that you don’t (quite) have the money?
Again, it’s quite simple.
Build something a little smaller, a little less grand. Do you really need 4 beds when 3 will do? You can add that swimming pool later, so leave it out of the contract. No need to go crazy with a big, western-style kitchen if your Thai partner does all the cooking outside. Maybe you don’t need hardwood flooring in absolutely every room? We went through this process. We chopped out the pool and put hardwood flooring in 3 rooms. Will it affect our enjoyment? Not one bit. We will add that pool at a later date. We will have wooden flooring in the main living room, and for most of the time anyway, we will be outside or under zone 2!
The other area you can cut costs is where you can do some of the work yourself. So, in our contract, we cut out the kitchen fabrication and fitting, because I knew I could do that myself later on. That can be a massive saving, and that’s just one area. Same goes for dressing rooms / fitted wardrobes, if you are a handyman. We will also landscape and plant the garden, making another big saving.
Finally, it really helps to have a great builder that you can work with to make it all happen. He needs to be flexible if you want to take on some of the work, and cut parts of the contract value accordingly.