turnkey or labour contract better?

hayabusa1208
Posts: 4
Joined: June 5th, 2019, 8:59 pm

turnkey or labour contract better?

Postby hayabusa1208 » June 6th, 2019, 10:37 pm

Hi everyone, i'm planning of moving to india and would like to buy a land size of 1500 sqft around nearby bangalore and would like to build total of 2500 sqft built-up area. Ground +3 (each floor 600sqft). i have been searching in google and reading and found the asking price from builders is around 1400-2000 per sqft. My budget is only around 30 lakhs. So if i choose labor contact option, will i be able bring the per sqft price down to 1200 per sqft?

I have been doing my research and for labor contact i need to arrange for plumbing, electrical, excavation, cement, bricks, steel etc and also need to purchase tiles, flooring, etc on my own. So will i be able to do it under 1200 per sqft by hiring labor contract? also will it compromise on the build quality and aesthetics?


I have no idea how things work in india so your help and advice will be much appreciated.

msn1270
Posts: 1334
Joined: June 17th, 2009, 2:21 pm

Re: turnkey or labour contract better?

Postby msn1270 » June 7th, 2019, 8:01 am

FYI, as there is a saying, "If you through Peanuts, You get Monkey's Only".

Even with Rs. 2,000/sq.ft, You won't get good Quality work with today's material and Labor Cost from many contractors nowadays. Apart from that, in this cost of Rs. 2,000/sq.ft itself, there are plenty of works which are not covered and you have to spend from your pocket separately. Ex. Sump, Overhead Tank, Electrical Fittings, Interior works like Wardrobes, Modular Kitchen, Chimney....etc. Moreover, once you start construction activity, in majority cases, Budget shoots up by min 20-40% due to changes in the requirements coming as & when you progress.

So either you need to increase your budget or reduce your requirement.
Last edited by msn1270 on June 11th, 2019, 7:31 am, edited 1 time in total.

hayabusa1208
Posts: 4
Joined: June 5th, 2019, 8:59 pm

Re: turnkey or labour contract better?

Postby hayabusa1208 » June 7th, 2019, 7:34 pm

msn1270 wrote:FYI, as there is a saying, "If you through Peanuts, You get Monkey's Only".

Even with Rs. 2,000/sq.ft, You won't get good Quality work with today's material and Labor Cost from many contractors nowadays. Simple example is that in this cost of Rs. 2,000/sq.ft itself, there are plenty of works which are not covered and you have to spend from your pocket separately. Ex. Sump, Overhead Tank, Electrical Fittings, Interior works like Wardrobes, Modular Kitchen, Chimney....etc. Moreover, once you start construction activity, in majority cases, Budget shoots up by min 20-40% due to changes in the requirements coming as & when you progress.

So either you need to increase your budget or reduce your requirement.


Hi what if i got labor contract instead of turnkey contractors? I can order/buy the materials myself and i do not need expensive stuffs for kitchen cabinets, bathroom , floors etc. just normal material will do. Only thing i must get good quality will be the cement, steel etc for structure. So i'm trying to cut costs by getting labor contract instead of full contract.

Also for full contract, they add their profit into the cost like 15-20%(Maybe more). So if they quote price of rs2000 per sqft, it's actually rs1600 etc. And for carpentry work i have own contacts so not worried about that. so let me know your thoughts as i've been reading the forum and quite a number of people have used labor contract instead of full contract.

ardesarchitects
Posts: 930
Joined: June 20th, 2009, 2:12 pm

Re: turnkey or labour contract better?

Postby ardesarchitects » June 7th, 2019, 8:30 pm

Hi,
Construction cost per sft is not standard , it varies as per the building model and format.
To keep it simple, by opting for labour contract you cannot save more than 10% of total cost compared to material contract .
Most cases people end up speding more than material contract as you are not familier in this feild, every one will take advantage of the same.
In current market if you are looking at moderate finishes for your home, you need to spend nothing less than 2000/- per sft .

Regards,
Ar.Praveen.N
Ardes Architects and Interior designers
ardesarchitects@gmail.com
www.ardesarchitects.com
https://www.facebook.com/ardesarchitectsblr

Visualizer
Posts: 93
Joined: June 1st, 2018, 6:24 pm

Re: turnkey or labour contract better?

Postby Visualizer » June 7th, 2019, 10:27 pm

If you want to cut cost and build fast go for GFRG construction. The only condition is house design should
be simple 4 side wall in room kind as walls in GFRG are load bearing. You can cut costs by around 25% for same finish over block construction.

I have seen 3/4 GFRG homes and I studied lots of technical details .
One person I know has constructed recently in whitefiled as well.
I did not go for GFRG as I wanted number of french windows and other unconventional stuff requiring beams and columns which negates purpose of GFRG.

Other methods to cut costs are
1. Use a ready made house plan and directly work with a structural engineer for design. Custon design woth architect involves costs.
2. Dont go by conventional wisdom of contractors when it comes to foundation beams columns etc.
Often they over engineer like 16mm rod when 12 will do. Brief structural engineer what you need and minimise costs.

3. Choose simple rectangular house plan. Unconventional fancy ideas look good but suck money ( personal learning)

4. Cement or steel dont make much difference in overall costs. As a rule of thumb you can take 2.5 kg per sq feet as to estimate required quantity.
see my other post in this forum on same subject.
Choose primary steel (JSW, SAIL, Tata, Vizag) and any brand cement you are getting. At times primary steel can be cheaper then fancy brand secondary steels.

msn1270
Posts: 1334
Joined: June 17th, 2009, 2:21 pm

Re: turnkey or labour contract better?

Postby msn1270 » June 11th, 2019, 7:37 am

Many people think, They can save the 10-20% (Profit margin of a contractor) if they buy themselves all the raw materials. But, Prices always different for a one time buyer vs the Regular/Bulk Qty Buyer from any dealers, whether its Sand/Steel/PLY/Consumables....etc. Also regular buyers(Contractors) get the materials in Credit for 30 Days or more based on their business understanding with the dealer & they clear it once they get billing from the owner. Those are some of the financial management techniques available for the contractors to reduce their Burden.

For an individual, Unless they know the dealer very well, who can ready to sell you without profit, you can't save anything. In fact if you are not a material expert, you will definitely end up buying at a a higher Price or you may buy Sub-standard Materials.


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