Custom Builders vs Volume Builders: Property Developer Explains

https://www.youtube.com/watch?v=apwz7PVOne4

Alright, let’s talk about something that trips up a lot of property developers the difference between using a custom builder and a volume builder. Both absolutely have their place in development.

The trick is understanding how to choose a builder that is right for your project, your location, and your desired outcome. Because if you get this right, you will set yourself up for success. But if you get it wrong, you could cost yourself a fortune when it comes time to rent out or sell your townhouses.

Now, I’ll start by saying this: neither option is better across the board. It’s horses for courses. The real key is understanding what your project needs. And then having the expertise to project manage whichever builder you go with. That’s where a lot of people slip up.

Understanding how to build a house properly means knowing when a project needs the flexibility of a custom builder versus the structure and systems of a volume builder, because that decision directly impacts cost control, timelines, and end value.

Custom Builders

So, let’s begin with custom builders. If you want something tailored, unique, and you’ve got a vision that’s outside the standard mould. A custom builder is the way to go.

You’ll get the exact outcome you want, but here’s the reality: it will take longer. It’ll demand more energy. And it’ll require more expertise from you as the developer. You’re dealing with custom drawings, interior design, and solutions that need to be managed carefully.

That means running competitive tenders, choosing the right builder, and then managing that builder all the way through. If you’re experienced, you can absolutely create something amazing with a custom build. But if you’re not, that flexibility can quickly become a liability.

Volume Builders

Now, when it comes to volume builders. They can get a bad rap sometimes, but they definitely play their role. These guys are process driven. They’ve got systems, templates, and floor plans that they stick to.

If you stay within their lane, they can deliver really well. But here’s the danger: the more you try to treat a volume builder like a custom builder, making changes outside their systems, templates, and floor plans, the slower your project will move. And the more they’ll charge you, and the less happy you’ll be with the outcome.

So, with volume builders, it’s all about keeping within their templated designs. You get transparency, you get fixed pricing. And if you’re a first-time developer or working with a tighter budget. That predictability can be a benefit for your project.

And if you’re wondering whether custom or volume is the right play for your project, jump into our free property developers network the Little Fish Network. Thousands of developers are in there helping each other make these exact calls.

Where Developers Go Wrong

Alright, now here’s where a lot of developers get caught out, though. If you drop a custom build into the wrong location so a higher-priced or higher-end product into, say, a mid-range suburb where there isn’t demand for that kind of product you’ll overcapitalise and get hurt when it comes time to sell or rent the townhouses.

On the flip side, if you take a lower-value, cookie-cutter volume builder product into a high-end location where buyers are expecting bespoke finishes, you’ll save money on the build, get the project delivered fast, but you’ll lose big when it’s time to rent or sell.

So, the key is to always match your builder to the market where you are developing.

The Budget Reality

But it is not always that simple, sometimes, based on circumstance, the choice will have to come down to budget. You might want that dream custom build, but if your numbers don’t work, you’ll be pushed toward a volume builder. And that’s not always a bad thing.

With volume builders, as long as you are happy with one of their templated designs and you can restrain yourself from making changes and upgrades, you’ll have some clarity on cost.

On the other hand, with custom builders, the price is fluid. First-time developers often don’t realise how quickly costs can blow out and they typically find out when it’s too late, usually at tender stage, when you put your project out to the builders to provide quotes, after they’ve already spent tens of thousands getting the design done and through the town planning approval process.

That’s why experience or bringing in the right project manager if you lack experience, can save you from some very harsh and expensive lessons, typically at a time where you are already committed and there is no turning back, so you’ll have to accept the reality no matter how bad that reality may be.

Importance of Relationships

Now let’s talk about the importance of relationships, another big piece of the puzzle when deciding which direction to go with your builder, custom or volume.

Either way you choose, it will be critical that you have the right people, as in contractors, around you, supporting the project, designers, town planners, surveyors, and of course the builders themselves.

All, in their own right, if not managed correctly, can make or break your project.

This is where we spend most of our time at Little Fish. We’ve built relationships with quality custom builders and quality volume builders, and all the relevant contractors over the past 10+ years, and we know how to manage both paths to get the best outcome for a project.

If you need help with your next project, you can book a call with me directly to discuss your goals. We are expert property development consultants that offer property development management for all types of residential development projects.

Or, if you’d rather go it alone, make sure you jump into the Little Fish Network, our free developer community with thousands of like-minded developers all helping each other succeed. I’ve dropped a link for that below as well.

Because at the end of the day, these developments are high stakes. You can lose money as quick as you can make it. If you get them wrong, the financial hit can be devastating, trust me, I’ve been there.

So, essentially, both custom builders and volume builders have their place in townhouse development projects. What matters most is matching the builder to the market, like I touched on earlier and making sure your choice lines up with the location and your end-product expectations.

If you can manage that, you’ll save yourself a lot of headaches and put yourself in the best position to create a successful, profitable outcome for your development.

Filled under: All Building Developer Insights