Interview With Jeff Steffe, Builder in Costa Rica — Part 2: Timelines, Budgets, Materials, and More

May 13, 2023 in Life in Costa Rica, Tips for Buyers, Real Estate in Costa Rica

Continuing along with last week's interview with Costa Ballena builder, Jeff Steffe, this week we take a more in-depth look into timelines, budgets, materials, and more important information about construction in Costa Rica.

Click here to read part one of this interview that gives a general overview about construction in Costa Rica. Getting more into the nitty gritty details of building and renovation in Costa Ballena, what type of warranty do you as a builder offer on your projects? I offer a one year warranty on all of my builds and most of the materials I use. A lot of the time, wood doesn’t come with its own warranty because it’s such a natural product. My subcontractors typically also carry a one year warranty. But since this is such a small community and we all become friends here, it’s really hard for me to draw a line in the sand after one year and say that I can’t help anymore. If there’s something that is definitely a fault of the installation or the material we work with, I’m always open to honoring my warranty a little longer than the typical one year plan. And I feel that if it’s something that I can help with that wasn’t a fault of mine or the subcontractor’s but it’s just something that can be done in good faith, I’m always looking to help. I believe that a little bit of effort on that end goes a tremendously long way to having harmony in the community of people who live here. What is the payment schedule for how much is paid up front and how much throughout the course of the construction project? Payment schedules do change depending on the type of project. For smaller projects that are only up to a few weeks duration, there will typically be a 50% deposit upfront, which is basically what is needed to procure materials. The other 50% would be due upon completion and the approval of the client. We request the final payout once the client agrees that they are completely happy with the end result.  New home builds are a little bit different. These projects come with scheduled labor payments and material purchases. We do the purchasing of materials through local hardware stores. Our clients may elect to open their own account at the hardware stores for the purchase of materials for the project. They would then pay the materials monthly or however often the hardware store requests payment be made depending on the size of their credit. Labor costs are requested to be paid by the client on a schedule that coincides with milestones of construction. This may mean that every month or so there is going to be another deposit for labor. What kind of accountability do you offer your clients in your contract? Do you address timelines, building supplies, fixtures, quality of the materials? To be accountable to my clients, I try to address each of the concerns you mentioned. We like to set up a schedule at the beginning of each project to address the two biggest questions that clients will have, which are about the cost and timeline. “How much is it going to cost and how long is this going to take?”  If we can find materials in the country, timelines are much much easier to address. If the client wants to import materials, we can give them our ‘best guess’ scenario on that. We’ve been finding trends in timelines depending on which country the materials are being imported from. Although lately, that’s all been up in the air with a limited amount of shipments coming in and a lack of materials in the country.  We really try to stress that during a build or renovations, there is only so much that we can do with what we have to work with. We do like to point out the differences in quality and how different materials will affect a project. If someone wants an opinion on one fixture over another or one tile surface over another, I’ll gladly give my seasoned opinion. But ultimately, the onus of choice is on the owner and what their wants and needs are.  Budget and cost estimates are tracked on a daily basis per project. We give weekly budget and schedule updates as far as where we are on smaller projects. Larger projects tend to spread out a little bit due to weather or materials not showing up. But oftentimes, we can really press and bring more people on to make up time during the build. Do you cover the cost of the insurance for Caja and INS for the workers? Through Figure 8 Management, I do not cover the cost of insurance for Caja or INS for workers hired by the subcontractor. Those are provided by the subcontractors I hire. They are all individually insured as a company and they have to provide me, as the contractor, and the owner with a document from the insurance provider that shows that they have insurance for Caja and INS. If they don’t provide these documents, we typically won't allow them to work on larger projects. We definitely require this paperwork when hiring a subcontractor for a large build. Things like smaller renovations or tiny little builds don’t always necessitate insurance coverage. It depends on the needs and timeline of the project. Do you have your own team of workers or do you hire contract workers depending on the needs of the project? Through Figure 8 Management, I do not have my own team of workers. I have subcontractors who, over the time we’ve worked together, I have gotten to know very well. I understand the quality of their work and their specializations. I try to hire the same subcontractors as much as I can for the type of projects I know they will excel at. I maintain a good reputation with the subcontractors I hire and that maintains the quality that I expect and want.  Through 9 Degrees North Collective, we have slowly started to hire our own team of workers and pay them directly. It does depend on the needs of the project. A lot of the projects around here are specialized and I like to hire people who are local, who specialize in the exact thing that’s needed. Do you as the builder apply for the permits for dirt movements or construction? As the builder, I help clients apply for permits. I do work closely with architects and engineers who have helped design the projects and are typically the ones who will apply for the permits. But I work hand in hand with them in getting all the proper information that they need and we work in tandem to provide that service. Where do you source most of your materials? Do you do any imports for clients? Depending on the type of project, most of the materials I source are integral parts of the construction and local to the hardware stores here. I also do a lot of sourcing out of San Jose and imports from the United States. Clients who want imported materials will often ship them down here on their own but I do give a lot of feedback on how to ship them the best way. I do some importing myself for clients but again, it’s all client specific and need specific. How much does your company charge per square meter or foot for a basic home build versus a luxury home build? What we charge per square meter or foot is a loaded question. We have many different types of building materials that we offer per building. We can do light-weight steel. We can do concrete block. We can do engineered steel, which is a product that we import from the States that is an engineered system that commands a little bit more design. We also do luxury builds. So you could have a price -- depending on your finishes -- with appliances and cabinetry that probably ranges between $650 per square meter all the way up to $1800 per square meter. What your style is and what your tastes are and what your need for luxury finishes are -- we have such a wide range of pricing that would truly fit anybody’s budget in the area. How much can someone expect to pay to renovate a kitchen with new countertops and cabinetry?  The last kitchen I renovated, we did everything from countertops, painting, sinks, appliances, cabinetry. The pricing totally depends on the size of your space and the finishes you choose - whether you want to go with granite or marble or wood. On a typical kitchen you can spend between $12,000-$13,000 and upwards, again it’s all depending on the size and the type of materials and appliances that you want. How much to renovate a bathroom? For bathroom renovation, again, the last one I did was just about $5000 and that included renovating a whole bathroom. We put in a closet where there wasn’t a closet, and installed a shower where there used to be a bathtub. Again, it all depends on size, furnishings, finishings, and materials and it can go anywhere and skyrocket from there. How much to retile a pool/terrace area? Retiling a pool and terrace area is truly dependent on the type of material that one wants. A good budget is around $30-$40 per square meter of tile and that’s just to purchase the material. Then you have, depending on the type of renovation, like if we need to remove tile and dispose, the removal cost and the disposal all the labor and then the labor to install the tile. The price is largely material dependent, though. Do you charge for carpentry services or is this included in a per square meter price? I do not charge separately for carpentry services. Carpentry service is a budget that is part of my square meter price on a build unless the client wants something very outlandish or very specific. There’s an average budget that we provide and from there that seems to fit the bill for most people. Once in a while, someone will want a little bit more and at that point we kind of discuss where the budget is and above and beyond would be paid separately. But carpentry is generally included in my square meter price. Do you charge separately for building supplies and fixtures or is this included in a per square meter price? Depending on the project, building supplies can be included in the square meter price. A lot of the time on larger builds I let the clients pay for the materials directly. That way there is no handling on our end. We keep the prices lower. We fight for discounts for the clients or pass along the discounts we receive. On smaller projects, where we just have to go out and buy the materials to perform the work, that is always included in the price. You have partnered with Pura Vida Solar Installations to include solar energy packages in your home construction business. What can someone expect to pay for a solar installation for a 3 bedroom home with average electrical usage? I have recently partnered with Pura Vida Energy Systems as a solar provider. I have been doing that now for a couple of years and it’s an amazing investment that someone can make in their home. A typical size solar installation for a 3 bedroom house with an average electrical use will run around $13,000-$15,000 dollars. That’s for a grid-tied system with no battery backup. The typical payoff for that is around 6-7 years depending on your current ICE power bill and offers a tremendous return on investment -- about 20% per year after the system has paid itself off. Who do you recommend would benefit most from adding a solar installation to their home? I would recommend that anybody who uses a fair amount of electricity would benefit from having solar. The reason I say this is because when you purchase a solar package you are locking in at today’s ICE rates. Those rates are never going to be lower than they are at this moment. You will start having a return on investment on your solar purchase immediately. You will start to see your bills become lower and after 6 or 7 years, you will have the entire system paid off. At that point you will start to see 20% return on investment on a yearly basis. Nothing else that you can do to your house will start making you money quicker than solar.  The fact that you have a 30 year warranty basically on panels and inverters, you never have to worry about a thing. You wake up every day and as soon as the sun starts shining you’re starting to make electricity. The more power that you use while the sun is shining -- it’s all free basically. You’re using the sun’s power to provide electricity for your house. So, I would say to anybody who uses a fair amount of electricity, I offer free estimates and a free shade analysis. At the end of my visit, I take all the information gathered during my analysis at your house. I then send it to my engineers and they will develop a size system that will fit your house and get your bill as close to zero as possible. And that’s all free.  

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