Owner Builder vs Licensed Builder: Which Is Right for You?

If you’ve finally decided to take the plunge and build the house of your dreams, the next step is to decide how you’ll build your new property. Working with a licensed builder is the most common choice in Australia, but there are alternatives, like being an owner builder. 

However, taking charge of your home’s construction is a massive undertaking! It will require a significant amount of your time and money throughout the construction process if you plan to owner build. But are there any benefits to owner building at all?

Hiring a builder to manage the construction of your home is usually the best decision for first-time home builders. Working with a custom home builder gives you plenty of input without needing to carry the mental, legal and financial burden of the technical details. 

If you are making the decision on whether or not to owner build, you aren’t alone! People around Australia everyday have the thought that saving money by owner building is the right decision. However, there are many benefits of using a licensed builder – and alternatives like building to lock-up stage which may be the perfect compromise. 

In this article, we are going to look at all the pros and cons of being an owner builder.  This will give you some guidance on whether or not owner building is the right decision for you. 

Read on to learn all about it! 

What Does It Mean to Be an Owner Builder? 

Being an owner builder means that you are responsible for organising everything necessary to build your house. This includes applying for permits, and organising labourers. Being an owner builder may save you some money, but puts a lot of pressure on you. 

As an owner builder, you will need to take full responsibility for all construction work performed on your property. You’ll be in charge of overseeing the entire construction process and organising all the trades and workers. Additionally, you will be subject to the same statutory requirements as a registered builder. It is important to note that each state has its own set of regulations, so you must consult with the appropriate state authority before beginning the project as an owner builder.

In general, as an owner builder, you will require the skills of a licensed builder. During construction you will be dealing with building permit applications, analysing building reports, handling emergency situations, hiring and supervising staff, and making sure there is a safe working environment. In addition, your work should meet the specifications under the Building Code of Australia.

There are three types of owner builders. Check if you fit into any of the following descriptions:

  • Landowners who are overseeing the construction of their own homes or homeowners who manage the renovation of their existing property.

  • Tradies who are building or extending their own homes. 

  • Registered builders who are building, renovating, or extending their own homes

The most common reason people choose to build on their own is to save money on construction costs – though being an owner builder isn’t necessarily cheaper in the long run. However, for some people, the lack of available builders in their area has prompted them to become an owner builder.

People with a creative streak, on the other hand, may enjoy prefer being in charge of construction projects. In fact, with the popularity of home improvement shows like The Block, more and more Aussies are wanting to know how to become an owner builder. As a result, choosing to wear the owner builder hat may be ideal for some people.

However, there are some genuine disadvantages to owner building. It’s critical to consider both pros and cons, and talk to a few licensed builders before making your decision. When getting a cost estimate for construction, you may find that the cost savings aren’t worth the stress or liability – let’s look at some of the pros and cons.

Pros and Cons of Being an Owner Builder

Building your own home from the ground up can provide a real sense of accomplishment. However, there’s no guarantee you’ll save money and the stress can be considerable. Let’s take a look at the pros and cons of owner building. 

Pros of Being an Owner Builder

There are a few different unique positives to owner building, so it’s easy to see why it can sound so appealing. Here are some advantages of being an owner builder:

  • You Have Total Control – One of the greatest perks of being an owner builder is your sense of control over the project from conception to completion. The ball is totally in your hands – from choosing the materials, hiring tradespeople, to setting your own pace and working on your own schedule. What’s more, if you need to make changes in the middle of the construction process or pause the process altogether, you can do so more easily. 

  • You Might Save Money – 99% of those who decide to become an owner builder do it primarily for the savings. Media articles claim you can save between 10% and 35% of the total estimated cost when you manage construction yourself – but be warned that many of these statistics refer to standardised kit homes and not custom builds. As an owner builder, you can choose your own tradespeople and materials – which may or may not save you money compared to a licensed builder’s connections. Being an owner builder does give you the flexibility to shop around or tap into ‘mates rates’ from friends or family.  

  • That Feeling of Satisfaction – As an owner builder, you are fully invested in the your project. You make all of the decisions and ensure that everything runs smoothly. It may be a difficult task, but it can be a rewarding experience at the end of the process. 

  • A Learning Experience – Being an owner builder entails thorough planning, budgeting, project management, and decision-making. These are valuable skills that you can apply not only to future construction or renovation projects, but also to other career pursuits. However, managing these factors incorrectly can be the downfall of an owner build, so the stakes are high. 

Cons of Being an Owner Builder 

Of course, owner building isn’t easy and it isn’t convenient. Here are a few things to consider that you should be aware of if you’re thinking about owner building.

  • Constant Supervision – Coordinating the tasks of tradespeople and supervising them is a crucial part of your construction or renovation project as an owner builder. Consequently, you need to be present on site almost constantly to ensure everything goes according to plan and within building regulations standards. This type of setup will only work if you do not have other full time work commitments. Some people who choose the owner builder path have to take a lengthy leave of absence, ranging from three to six months, just to complete the job – and the loss of income can easily outweigh the cost savings on the project itself.

    Be sure to consider how many hours you’ll be spending working as an owner builder on your project, and whether you’re financially better off spending that time in your regular employment, while hiring an experienced builder to take care of the day-to-day tasks.

  • Struggles with Financing – Securing bank financing is a consistent problem for owner builders. Many  banks and financial institutions are wary of owner builder loan applicants. Banks consider the risk for owner builders to be higher due to the common occurrence of projects not being completed on time, or worse, not being completed at all. Owner builders may also change their plans or go over budget at times. All of these are violations of the bank’s policies and principles, and they have harmed owner builders’ credibility.

    Hence, raising capital will always be a challenge. There may be a slightly better chance of getting a loan if you have a guarantor who can provide additional security. But it is difficult to find people willing to vouch for such a large financial investment. Even if you are able to find a guarantor, banks will not give you the full amount you are requesting.

  • Mistakes Can Be Costly – The biggest appeal of taking the owner builder route is the huge amount of money that you can save. However, this is not always the case, especially if things go wrong. If there are building errors, it may cost even more to hire professionals just to remedy the problem – and you have legal liability for any code violations or safety issues in the finished property.
    These are also hidden costs to consider. Usually, these fall under administration expenses which include planning applications, building permits, compliance with state standards, and drafting of plans. These will eat up time and money, especially for inexperienced builders. If you are not familiar with the regulations, there might be details on your plan that will not get approved and you will have to do the whole process over again.

  • Not Enough Experience – Even if you took the required courses needed to be an owner builder, sometimes the lack of building experience will catch up with you. There are certain details that only a seasoned builder can see. Even small, but integral, factors that are overlooked can cause structural damage in the future. 

What Are Your Responsibilities as an Owner Builder? 

As an owner builder, you will have similar responsibilities as a licensed builder such as the following:

  • Ensure the structural soundness of the building for a minimum of six years after the project completion.

  • Interpret detailed specifications and plans and apply them in accordance with building permits.

  • Supervise and manage the whole project from beginning to end. 

  • Receive materials delivered onsite and ensure that they comply with quantity and quality specifications. 

  • Rectify any defects in the construction work. 

  • Handle all contractual and financial disputes between suppliers and subcontractors. 

  • Ensure that the site is safe for workers, visitors, or present occupants, if any. 

  • Organise and acquire insurance policies that cover liabilities for personal injury and personal property against disasters such as storm damage, fire, accidents, and theft.

If you are planning to sell an owner built home, you also need to ensure that appropriate insurance policies are obtained. 

Owner builders may perform the actual construction work themselves except for work that is required by law to be performed by licensed tradespeople such as electricians and plumbers.

It is also important to note that owner builders cannot transfer their statutory responsibilities to other people. 

Worksite Signage 

During the construction period, you must put up a reasonably-sized sign that can easily be read by the public from outside. Keep in mind that if you fail to comply with this requirement, an infringement notice may be issued or prosecution proceedings may commence. 

The sign should include the following information:

  • Name of the owner builder

  • Owner builder approval number acquired from the Building Services Board

  • Owner builder’s telephone number

What Are the Risks of Being an Owner Builder?

There are a number of risks involved with being an owner builder, and these risks only increase with a lack of proper experience. 

  • Financial Risks – The most common risks posed to owner builders are financial. In many cases, a home build can become more costly and time-consuming than you expected. These financial risks have the potential to also might affect your other endeavours in life such as your career, personal, and family life. Many of us are all too aware of how much financial stress can impact every aspect of life.

  • Approval Acquisition is on You – You might also be missing out on some important regulations or requirements that may impede the progress of your construction, or worse, may cause problems with safety and quality. These liability risks can lead to serious consequences as an owner builder, especially if you sell the property in future. Any faults or safety hazards in the construction will be your legal responsibility. 

  • Unforeseen Circumstances Are Your Responsibility – Unforeseen circumstances are another unfortunate risk you could face as an owner builder. Worldwide and nationwide setbacks – like those we’ve all faced in the past few years –  have the ability to affect every aspect of your project. From shutdowns, lack of materials, loss of staff and property market changes, you will have to handle all of these circumstances on your own as an owner builder. 

Many things in life don’t come without a little risk. For so many people these risks will pay off – for others, the perks of being an owner builder just aren’t worth the stress and struggle in the end. That’s why it’s important to fully consider these risk factors before beginning an owner builder project. 

How does this compare to working with a licensed builder? Let’s compare the two construction methods. 

Pros and Cons of Hiring a Licensed Builder 

Before making any big decisions on how to build your new home, you should always weigh the pros and cons. Consider these points when you are making the decision between owner building and hiring a builder. 

Pros of Hiring a Licensed Builder

As you might be aware, working with a builder to get your home finished is one of the best decisions you can make. When you choose a custom home builder, you don’t have to settle for a stock-standard design, and the process is easier too.

Some of the reasons hiring a builder is the smartest option include: 

  • They Will Handle All Building Legal Issues – When you’re building a home, you need to jump through a lot of hoops when it comes to compliance with rules and regulations. A professional builder knows these regulations by heart and uses the right processes to obtain permits. Your builder will also easily guide you through the maze of paperwork and documentation.

  • Keeps You Within Budget – The building budget is usually the first order of business when you discuss your plans with your builder. A reliable builder will keep track of the building finances and will find a way to stay within budget, and has plenty of experience accurately costing projects. They also have reliable suppliers that can provide them bulk discounts and good deals, meaning that sourcing your building materials and tradespeople through a builder often nets you the best value (and the best quality work).

  • Has the Necessary Connections – A home builder with years of experience already has established a solid reputation with building authorities. Therefore, you have a better chance of getting quick permit approvals if the builder has a good track record with regulatory agencies, knowing exactly who to talk to and how to complete the paperwork correctly. 

    In addition, a builder has vast knowledge about building codes and other rules and regulations which allows them to build you a home that complies with quality and safety requirements.

  • Work Within the Time Frame – Timing is a crucial factor when building a home. If construction takes longer than planned, you will have to shell out more money to pay for workers and other expenses. A builder is experienced at creating and following a building schedule. They can also quickly adjust their workflow and work around unexpected events such as weather disturbances.

  • Quality Construction – Building a house is a significant investment, so you need all the assurance you can get that it will be built correctly. A professional home builder will guarantee quality construction and will provide you with a custom designed home that fits your needs and lifestyle. They have the knowledge, experience, expertise, and skills to give you the home that you have worked so hard for. 

  • Specialised Building Skills –  If you’re building on an irregular block, like a sloping or narrow lot, they can simply be too difficult for an owner builder to work with. A custom builder can make sure you get the most value out of your new home, and ensure the resale potential is high as well. Compromising on design and quality during an owner build can undermine the value of your property if you do need to sell it in future. 

Cons of Hiring a Licensed Builder

Although hiring a builder is often the best way to build a home, there are some things to keep in mind, including: 

  • Can Be More Expensive (But Not Always) – Expert work comes at a price so if you’re on a tight budget, a professional home builder may not seem appealing. However, costs are more predictable when working with a builder. You may prefer to avoid the margin a builder charges, but remember, you’re paying for their management expertise, experience and their role in shouldering liability for the project’s outcomes.

  • You are Dependent on their Timeline – There may be times in your life when you need to either speed up or slow down the construction process. When you hire a builder, you cannot simply change the schedule without first having a thorough discussion with your builder. If you’re planning a very long-term building project, you may need the flexibility of being an owner builder. However, the courses and qualifications to be an owner builder in Australia take months to complete, so it may not be a quicker option. 

Overall, working with a licensed builder for a custom designed home has few downsides. As cost overruns are common on owner builder projects, it’s not guaranteed to be cheaper. You’ll also want to consider the opportunity cost of lost wages for the time you’ll need to spend managing your construction project. 

Building to Lock Up Stage: Owner Builder Alternative 

Building to lock up stage (also known as ‘finish it yourself’) is an excellent option for  prospective owner builders. This type of contract gives owners a chance to handle the finishings that make their home unique, without having to manage the more challenging aspects of construction. 

Completely owner building or working with a licensed builder both have their downsides. Owner building can lead to cost savings, but you have to handle every aspect of the build, while a licensed builder will handle everything for you, but will charge a margin for their services. That’s why building to lock up stage acts as a great middle ground. 

When working with a builder building to lock up, all of the aspects that are best handled by a licensed professional are done for you. They will handle everything from the design through to earthworks and construction, until the structure of your home is built and lockable for handover. 

Once the home reaches the lock up stage you’ll be in control for the finishing stage. You get to pick what painters you work with, who installs your faucets and utilities, and what the finishings look like. Because the look of the home is the biggest appeal of owner building, building to lock up is a great middle ground that is efficient, convenient and cost effective. 

One great example of professional builders who build to lock up stage in Perth is Central Avenue Homes. Unlike many other building companies, Central Avenue Homes is both experienced and comfortable with build to lock-up arrangements, and works with you to ensure your custom designed home fulfils your vision. 

If you’re wondering if building to lock-up is the solution you’re looking for, reach out to Central Avenue Homes to find out more. 

Owner Builder in Australia FAQs

Is It Worth Being an Owner Builder? 

If you’re not up to the task of addressing a multitude of legal, financial, and practical issues as a home builder, then it is often not worth it. If you’re working or taking care of a family, you might not have the time and energy to sustain an owner builder project. 

The long list of responsibilities of an owner builder might put a toll on your physical and mental health. Personal constraints and lack of experience might slow down the progress of the construction. Most owner builders also need to sacrifice between 3 and 6 months of employment to oversee their project, which can negate the cost savings of being an owner builder. 

On the other hand, if you’re really up to being an owner builder, you might want to start by building a more manageable structure like a secondary dwelling or renovation before tackling a complete home build. From that small project, you can see overseeing a complete home build is for you. 

Do You Save Money Being an Owner Builder?

It has been estimated that being an owner builder can save you up to 35% of construction costs. However, these statistics often refer to simple kit homes or standardised designs, rather than full custom-designed properties. Budget overruns are also incredibly common on owner builder projects, as owners lack the experience a professional builder has in cost estimating. 

Is It Hard to Be an Owner Builder?

Being an owner builder can be incredibly challenging, especially if you have no experience in the construction industry. Finding suppliers and contractors, as well as ensuring the project is moving along properly, are some of the most challenging parts of building a home, especially for an owner builder. You’ll need to take full responsibility for managing the construction site and the entire building approvals process. 

Will Banks Lend to Owner Builders?

Some banks and lenders won’t loan money to owner builders because it’s considered higher risk. If lenders aren’t completely confident the project will be completed, or that the quality will be reliable, this can impact how secure they perceive the collateral (the finished home) to be. 

But this doesn’t mean that there is absolutely no chance of getting a home loan. It’s just that the criteria for owner builders are more stringent. You need to have enough savings or equity to assure the bank of your financial capacity. Having a guarantor that is willing to provide security for the loan may increase your chance of getting your home loan application approved. 

If you struggle to get a home loan as an owner builder, lenders can perceive building to lock-up stage as a less risky option, as a licensed builder will be handling the major structural elements. 

Can I Build a House Without a Builder?

Yes, you can build a house without a builder in Australia. If you meet the requirements, you can oversee construction of your home as an owner builder. 

In Western Australia, the process of becoming an owner builder has several steps. To receive owner builder approval, you must have sufficient knowledge of the responsibilities and duties as an owner builder and must be able to show this to the Building Service Board. You can accomplish this by completing an owner builder course and White Card Course. 

Looking to Build a New Home in Perth?  

Being an owner builder can sound rewarding, but there are also plenty of risks involved. For most people – and especially for first-time home builders – having a licensed builder on board is critical to a successful outcome. 

Here at Central Avenue Homes, we have decades of experience building beautiful custom homes in Western Australia. As a family owned and operated business, we’re personally invested in getting the best outcome on your new home. 

Our specialties include:

Every year, countless families rely on us to get their dream home built quickly and safely. Let us build your house so you can turn it into a home.

Ready to learn how Central Avenue Homes can bring your vision to life? Contact us to find out more


This article is published in good faith and for general informational purposes only. It does not take into consideration your individual circumstances and does not constitute an estimate for any specific project. Central Avenue Homes does not make any warranties about the ongoing completeness, reliability and accuracy of this information. Construction costs and other financial details vary and you should always seek a specific quote. 

Greg Grainger

Greg has over 40 years of experience in the WA building industry starting as a carpenter joiner.

He is entrenched in the local industry and has served on the board for MBAWA (Master Builders Australia WA) for over 10 years and was a founding director of Wesbuilders Cooperative for over 11 years.

With this experience he is able to quote accurately on new projects without the huge increase to provisional sum allowances.

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