Building

Now comes the hard part. You have your design. Time to get things moving. The first step of building is permitting, a topic addressed in depth in Chapter 9, so here we’ll concentrate on the actual process of constructing. The next step is the biggest: Who do you hire to build your house? There are several levels of options. You can 1) hand the project over to a developer to handle the entire process and basically agree on a price for the finished house; 2) hire a contractor to do the construction and assume the materials cost yourself throughout the process; or 3) do the contracting yourself by hiring a project manager and subcontractors.

1) Handing it over to a developer. This is a good option if you don’t want to spend too much time supervising the minutia of a construction project. Most of these developers also have architects on staff, making them something of a one-stop shop. They can design your project, do the permitting, hire the subcontractors, supervise the work site, and generally manage the project from beginning to end. Often the people who sell lots are also developers, and they will sell you a lot as part of a package deal that includes home construction. Sound good? Well, there are a few downsides. One is that you pay for peace of mind. Developers that manage the entire construction and then hand you the keys do the same price mark-up you would expect any developer to make, something between 15% and 25%. This is not so bad if you’re building on a lot because there’s nothing else in the area worth buying, but it won’t help you much if you’re building for cost reasons. The other thing to consider is that it might be difficult to find a developer willing to do this kind of project. Materials costs in Costa Rica have gone up quite a bit in recent years, making developers skittish of taking on those volatile costs for other people’s projects. Finally, if you have a particularly avant-garde design in mind, you might have to find a very specialized developer. They exist in Costa Rica, but with the amount of high-end construction going on at the moment, many of them have full schedules.

2) Hiring a contractor. This is one of the most common routes home builders take. A contractor just handles construction of the design that you and your architect settle on. The big difference between a contractor and a developer is that you, the owner, take more risk. The contractor quotes you an initial price, but you are in charge of buying building materials, so if their cost goes up, the contractor passes it on to you. Likewise, depending on the agreement you come to, a contractor isn’t necessarily a project manager. To make sure everything comes out right, you might want to hire your architect as project manager (maestro de obras) to be at the site on a regular basis overseeing the operation. Alternatively, if you’re comfortable with the role and have time, you can do this part yourself. The benefit of contractors is that they handle all the subcontracting, the payrolls, the logistics, and they are contractually bound to finish the job by a certain deadline. Also, a contractor doesn’t add an additional markup on the property value as his cut. You’re paying strictly for construction services, so you end up saving money over turn-key or developer-built properties. The downside is that you take on the risk of fluctuating construction materials costs, as well as the risk that the contractor or his hardware store suppliers are inflating materials cost to make the deal juicier. You also become liable for any worker injuries on the site, meaning you’ll need insurance.

3) Do it yourself. This is really only recommend if you have construction experience, speak good Spanish, or both. It would entail hiring the work force yourself, or at least hiring the subcontractors (masonry, concrete, roof, plumbing, electrical work, etc.). As in hiring a contractor, it would mean that you assume all the materials costs yourself from the get-go. It would also mean that you definitely need insurance to cover any injuries. The principle advantage of building your home this way is cost. With no contractor around to mark up the price and take a cut, you’ll be saving more money. In exchange for that, however, you will have to find someone to supervise every aspect of the construction, on a daily basis. Many people who chose to build this way take on that role themselves. Others hire a trustworthy architect as project manager to do most of the heavy lifting. You also have to get insurance to cover any work-related injuries that happen on your property. Once again, this is a great option if you’re serious about cutting costs, if you have experience in construction and speak Spanish, and/or if you have a complex design that needs special treatment. But it’s not for amateurs.