Contractors and Developers: The Best of Both Worlds

If you are looking to save some money on your brand new home, one thing you might want to consider is the class of developer you are investing in.

When we dissected the pricing schemes of real estate developers, we noticed that there are various factors that contribute to the listed price. One of these key factors is the construction cost – that is, higher construction costs naturally entails a higher listed price. Another factor is the construction period. Most developers have to bid out their projects to contractors before starting construction, requiring additional time and expenses throughout the process.

As such, firms who have the capacity to act as both the contractor and developer, hold an unmatched advantage in the industry.

The following is a list of three (3) key advantages for these types of developers:

1.       Value-for-money

Many developers that hire builders outside of their firm to construct their projects often have to account for the extra operating costs. These costs surface in their pricing, raising the overall price per square meter of the units; in other words, creating an unwanted burden which buyers will have to carry.

Developers that are both the contractors and developers are not plagued with this predicament. With significantly less overhead costs, they are able to create competitive pricing schemes, thanks to the efficiency and savings that are conserved during the construction period. These savings are carried on to the end-user, increasing the value for money for their customers.

2.       Delivering on time

Occasionally, developers encounter difficulty with their contractors in managing concerns such as changes in design, quality of the materials used, timely coordination, etc. This results in delays in construction and failing to achieve promised “Ready for Occupation” (RFO) dates.

In contrast, developers that are both contractors and developers have the advantage of completing their projects on schedule. They are able to avoid the implications of having to rely on other firms. Instead, they draw from their own background in construction, gaining the flexibility to react to external factors immediately and decisively. This guarantees that the standards of quality and excellence are preserved, and more importantly, that promises to buyers are kept.

3.       Efficiency in implementation and planning

These two factors are highly important in construction of residential structures. Proper management of such drastically decreases the instances of human error while increasing the efficiency of project planning. Having an internal design-and-construction team gives these types of developers a luxury others simply cannot afford. This is especially true for developers who have already accumulated a wealth of experience in construction and are considered as the experts in the industry.

Bottom-line, it is important for buyers to be aware that real estate developers who have the benefit of having their own construction firm holds a competitive edge over the market – they are able to provide buyers better value for money; the capacity to deliver on time; and the assurance of quality construction. We hope that you can use this valuable information in your search for a new home.


About Alfonso's Page

With a wife and a baby on the way, the cost of living in the city became prohibitive for Alfonso. Far beyond the city boundaries, other builders began to develop sprawling neighborhoods of cookie-cutter houses on doily-sized lots. They’re pretty but too cramped (for a growing family) and too far out of the city center. Alfonso became a stressed out man-in-the-middle, faced with no choice but to take the long daily commute--or pay big city prices. There was no middle ground. “Pagod ka na papunta sa trabaho, pagod ka pa pag-uwi…” “Alfonso deserves better. He deserves a real home, accessible to his work… a cocoon of good living.” This page is DEDICATED to all the Alfonso's out there in the Philippines looking to find more information about investing in Real Estate in the Philippines.
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