Design and Build Contractor.
This is a brief reflection on whether we can combine Maasai Architecture with its love for dome shaped structures, the versatile Container Architecture and Rammed Earth.
The house has provision for sleeping quarters, home office, a Kitchen, Dining Space and Lounge.
Affordable Housing / Architecture / Bills of Quantity / BUILDING SOLUTIONS / Business of Construction / Cost Information / Decision Making / Doing Business / Ujenzibora
Introduction
Money is made or lost in real estate before a house is built. The decisions that determine the outcome are made at the beginning. These include the Vision to Build(Why?), the Design (What?), the Costs summarized in a Bills of Quantity(How?), the Location (Where?) and the target Market (Who?). Here is how to build while thinking as an investor:
Build to Rent
By Self: Rent to Own
If your annual rent is higher than the cost of owning land plus building a small office, then build and use the savings to offset the cost of development. It is possible to find good land in Peri-Urban Areas near main Cities.
This will allow you to start your journey of owning a small office and eventually a bigger office complex as you complete your Rent-to-Own Milestones. In this scenario, you build a house and move in so that you can stop paying rent but pay down the loan used to build the house or office. Caution: Do not be too quick to move out of major Cities since some Opportunities are more concentrated in Cities than Rural Areas.
By Others: Rent for Profit
Becoming a landlord is a worthy goal when thinking about building. There is always pressure created by increasing household sizes and there will always be persons willing to rent if the location and price is right.
The main factor to consider while thinking about rental properties is affordability, Location, Services and The Payback Period. In Other Words, will your tenants be happy? and will you be able to recoup your initial investment by collecting rental income? One should also consider the prevailing rental income of the location and whether there are Opportunities for growth. For example, Universities and Hospitals can be great source of constant clientele.
Build to Sale
When Building to Sell, the most important factors are Location, Affordability and Profitability. One needs to consider all the costs of the project including Value of land, Financing Costs, Consultancy Fees, Cost of Statutory Services (Electricity, Water and Sewerage) and then determine the Selling Price. The metric to study will be the return on Investment (ROI)
Worked Example with a Financial Template
Financial Template:
In the above example, we are looking at a Potential Development of an Apartment Block Comprising of 8 Residential Units with shared services (Parking, Play Area, Common Staircase et Cetera).
As the numbers show, we have only two factors to consider, the input costs and the revenues. A difference of which will either generate a Profit, Loss or Rental Income with the indicated Payback Period.
All the Variables in the template are adjustable such that one can do further analysis on different neighborhood, House Types, Project Type e.g. An Industrial building or Park et cetera.
The most important thing to remember is that money is made or lost before a house is built.
NOTES ON FINANCIAL TEMPLATE:
COST SAVINGS
Maximizing Rental Income by Design
Example 1
Because the primary driver of an investment decision is to obtain a Return on Investment(ROI) or Make Profit at the shortest time possible, below is an example of a Proposed Residential Housing Unit that Maximizes Rental Income.
In the example, we are working with an 8No. Bedroom Maisonette where the following scenarios can play out to maximize Returns.
This is a House designed with the idea that it is an income generating machine. It is meant to get the owner to their financial goals within the shortest time possible.
Whereas this is one scenario, there is no limit as to what Solutions can be Designed to meet various Financial Goals.
8 Bedroom maisonette Designed to Maximize Rental Income
(Nobody has the luxury of time, and those who wish to solve the pressing problems of others are prudent to want to obtain their initial sum invested as soon as possible)
More Examples to Follow**
Greetings!
There are many people who own micro-parcels and feel intimidated because they lack the know-how of what is possible.
First, I will define a micro parcel as the “legally smallest piece of land one can own under the current laws.” This post is therefore for people who own an eighth of an acre or a sixteenth of an acre.
Why Think Small is The New Think Big. 3 Design Solutions for Micro-Parcels
Basic Rationale
The next frontier in residential housing is in the construction of tiny houses on micro-parcels. Countries which are ahead of the curve have pioneered new construction methods like 3D Printing a house in 8 hours to Modular Construction. But where should the revolution start?
TRIGGER 1: COST CONSTRAINTS
Most would-be homeowners are restrained by lacking the financial resources necessary to build. In part, this is because there are no solutions on the table.
Most of the available capital and intellectual resources in the industry are committed to those who are well able.Unfortunately, the budget of the “Small Guy” does not meet that threshold.
To arrive at viable solution, we not only need to think outside the box, but without it.
It is also obvious that people who can only afford an eighth of an acre or half of it are the majority in terms of Land Buyers. “The ants weigh more than the elephants,” says Fiona
TRIGGER 2: SPACE CONSTRAINTS
Most micro-parcels are either an eighth or smaller than an eighth. This presents a major constraint on space upon which one can build.
TRIGGER 3: IT MAKES BUSINESS SENSE
If one builds a house that can generate income as long as it is functional, it makes sense to build it affordably and within budget. This reduces the payback period. The technology wave is such that a generation is rising that is at Home Everywhere. That generation is constantly checking out affordable spaces on www.airbnb.com and similar sites offering affordable short-term accommodation. #ThinkSmall can help one build a Start-Up House that can be rent out for profit. If you work with a budget of KES. 3,000,000.00 to build, you can comfortably break even after 375 Bookings of the Asset. Immediately thereafter, the investment will start generating profits.
At a conservative estimate of 100 bookings per year, one can cover the cost of the Start Up House. This is looking at a house as an investment vehicle.
A DESIGN APPROACH TO PROBLEM SOLVING
Taking a design approach to solve the problem, we have designed a series of 2 Bedroom Maisonettes that can fit on an eighth or a 16nth of an acre under a series called #ThinkSmall. We believe that this presents a New Frontier of Opportunity for those home owners who have small pieces of land but still want to fulfill their dreams of home ownership.
3 MAISONETTES YOU CAN BUILD ON A MICRO-PARCEL
Compact I : Contemporary 2 Bedroom Maisonette with Kitchen, Lounge and Balcony
Maximal : Contemporary 2 Bedroom Maisonette with Kitchen, Lounge and Balcony
Gyan House : Contemporary 2 Bedroom Maisonette with Kitchen, Paarking Lounge and Balcony
Gyan House: Ujenzibora 2 Bedroom Maisonette
FENCING SOLUTION
While researching on this area, we realized that the typical perimeter wall methods increase the complexity of the challenge that small parcel owners face. While a perimeter wall serves as a physical barrier to intruders, if build with solid masonry blocks, it can end up blocking all the light and impeding air-circulation. This can dramatically compromise the quality of living on a micro-parcel.
ClearVu Wall Solution
To solve this challenge, we have proposed two approaches:
a) Using Columns and Steel Barriers such that you have the physical barrier of a wall and a lattice of steel that allows see-through and free air circulation.
b) Using an advanced fencing technology called ClearVu developed by Cochrane. Since an opaque barrier is the least desirable design solution for micro-parcels, CleaVu solves that problem.
Affordable Housing / Construction Management / Contracts / Cost Information / Decision Making / Finances / Ujenzibora
To attain knowledge add things every day. To attain wisdom subtract things every day. – Lao Tzu
Why a Cost Editor?
“Editing- which involves the strict elimination of the trivial, unimportant, or irrelevant – is an Essentialist craft.”
Everyone who reads a newspaper that has a lousy editor knows the feeling of being wasted.
But seldom do we reflect on the role of a good editor. A good editor leaves everyone focussed on the main issues of the story without being bogged down in unnecessary details.
When it comes to construction works, a Quantity Surveyor plays the vital role of a Cost Editor because he has carefully trained his/her eye and mind to see details. Here are 7 ways this can happen, leading to savings both in time, cost and bringing out the Lead Story in your Project.
According to Miliken, The Bills of Quantity is a fundamental instrument which has existed and developed over 300 years. It is to the discerning investor, what a pen is to a Copy editor.In my experience as a Quantity Surveyor, Bills of Quantities are entirely justified where the anticipated savings outweigh the fee charged to produce them. The role of the Quantity Surveyor as a Cost Editor in both big and small construction projects is emerging as an exceptional and an indispensable skill. Here are 7 Ways Why!
1.0 Elimination
A book editor or a film editor makes it easier for the reader to keep an eye on what is important. They do this by eliminating everything but the elements that need to be there.
A Quantity Surveyor as a Cost Editor can help your project by reviewing both the design and rationale for inclusion of certain elements. For example, in a recent building project, we proposed removal of 7 Square metres of corridors and saved the client 245,000 Shillings. The house worked just fine without the overdesign of circulation space. This was not apparent to the Architect of the Project.
2.0 Providing a Measurement Tool
A bill of quantity is a measurement tool. It captures the Lead Story of the project. It has brief description of every part of the proposed project. A recent Study revealed that where contractors are given a chance to estimate the cost of a project without a Bill of quantities, they increase costs by a factor of 10% to take care of Quantities Risk. In that sense, the very act of having a Bills of Quantity in your project can save you up to 10% of the cost of construction.
3.0 Substitution
A Quantity Surveyor prepares a Bill of Quantity for infrastructure projects (Building or Civil). A bill of quantities is a document used in tendering process which includes the materials, parts, and labor with respect to their costs. During this process of preparing the Bill of Quantities, a QS can propose substitution of the materials, methodology for construction and more affordable alternatives thereby leading to significant cost savings.
4.0 Prioritizing or Phasing.
When an author has a very long story and the publication does not have enough space, the editor decides which parts of the story to cut and publish later. In building construction, we call it Phasing a project. To achieve this, a Quantity Surveyor asks questions, listens to all the consultants (Architect, Engineer, Client Contractor et cetera), and connects the dots in order to distinguish the essential few from the trivial many. As a Cost editor, he can propose budgetary allocations that match the current financial constraints of the project. He can also help the Client to prepare cash-flow projections and phasing of the project!
5.0 Making Trade-Offs
A book writer may have many characters they want to fit in a story. They could also have many plots, twists and turns. Without a Copy editor, the whole storyline can get lost in the confusion of trying to include everything. A great editor asks, “Will this character or plot twist or detail make it better?”
The true value of a Quantity Surveyor is in helping the Client and the project Team re-discover what really matters in the project within the time, cost and quality expectations. In this case, they can suggest meaningful trade-offs, substitutability of building materials and best practice from past projects.
6.0 Time Estimation using The Labour Constant.
The Contractor’s prices for the various work items in the Bill of Quantities reflects the amount of time the estimator has allowed to complete each unit of work. This is refereed to as a Labour Constant for the particular item. It is easy for the Estimator Quantity Surveyor to help the project team calculate how long it will take to complete both individual work items and the entire project. This can help the project team to design a planning framework and formulate programmes for constructing the building.
7.0 Identifying Gaps.
A book editor or a film editor fixes gaps which break the main story line.
One of the major benefits of employing a Quantity Surveyor to measure is that, during the process of preparing Bills of Quantity, a QS will often spot gaps in the design information and will query the design team as to what is missing , will press then to finalise the outstanding information or suggest fixes.
Lastly, In the words of French writer and Poet, Antione de Saint-Exupery, “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.”
References:
1. McKeown, Greg. Essentialism: The Disciplined Pursuit of Less Ebury Publishing.
2. Cunningham, T. (2016) The function and Format of Bills of Quantities: an Irish Context. Report prepared for Dublin Institute of Technology, 2016.
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