9 Things to Know About Prefabs Before You Buy

Find out everything you need to know about prefab homes

December 6, 2022

Despite prefab homes becoming an increasingly popular option for many people, there is still a surprising amount of misinformation about what they are, how they are built and the many benefits they can provide.

We’ve decided to set the record straight by listing 9 things you need to know about prefabs.

1. What is prefab construction?

Prefab (or prefabricated to give it the formal name) construction is essentially the building of a home (or building) using materials that have been manufactured in panels or sections. Think of these as Lego-style building blocks that can be assembled in a much shorter space of time. Sometimes the entire prefab is built at the factory before being transported ready to be positioned into place at the find destination.

This is far from a new idea, as prefab homes have existed since the early part of the 20th century. In some cases (not always) they can be a very cost effective option that reduces labor overheads, while also increasing safety parameters along with the time taken to build a new home.  

2. On-site versus off-site construction?

There is no right or wrong answer to this question as it will come down to personal needs, which are typically dictated by the time line you are working to and available budget.

Firstly, we’ll explain the difference between the two options. On-site construction is the more traditional type most people are familiar with. This is where the various components are manufactured and delivered to the end destination where the prefab will be built and secured into place. The parts arrive flat-packed and ready for construction either by yourself or with a qualified builder. However, rather than using traditional stick framing construction methods, panels are used instead.

Off-site construction refers to the pre-assembly of the house in a self-contained environment, usually a factory. This can offer advantages such as higher standards of engineering and less impact from weather conditions, with the overall project likely to have fewer setbacks and as a result the outcome becomes more predictable.

If the factory does not have license certification to complete the full build, not all of the prefab can be completed off-site as city inspectors need to ensure it meets legal requirements. In many cases anywhere between 40-90% of the build can be finished before being delivered.

Having a prefab built off-site will mean it is completed on time, on budget and exactly to spec. The mass production of prefab materials that are constructed in a factory allows the manufacturer to have tighter control in terms of managing costs. This enables them to set fixed prices and deadlines, which is attractive to customers working to a particular budget and time line.  

The same can be achieved on-site, although it will depend on the skills and time available to ensure the various construction targets are met. Of course, not everyone is in a hurry to complete the build, so building on-site gives you more control and could end up being a cheaper option in the long-run.

3. When to go with prefab?

The benefits of going with a prefab home may not be immediately clear before you do some research. The most important points to consider are:

  • Shorter build time: In most cases a brand new prefab home can be constructed in a matter of weeks rather than the 6-12 months it takes for a traditional home. This applies to both on and off-site construction, so if you are in a hurry to move in you won’t have to wait too long. It also means not having to suffer a year – or more - of builders constantly coming and going from the site.
  • Predictability: From the very start of the project you’ll know how much it is going to cost and when it will be completed, making it easier to manage and organize everything else around the build. In comparison, traditional builds rarely meet the initial deadline, adding significantly to costs.
  • Less stress: If you choose to build it off-site, many prefab companies provide a service that will do the hard labor for you. This comes at an extra cost but it guarantees a high quality build and much less stress and worry. And if you build off-site there will be no delays caused by adverse weather conditions.
  • Rental income: Building an accessory dwelling unit (ADU) can also be done on your existing land, affording you potential rental opportunities in a short space of time.  

4. What parts are customizable for prefab?

Many providers will sell packages that are of fixed dimension so you know exactly what you will receive with a templated floorplan, allowing for some modifications in the interior such as flooring and fixtures. While there are others (typically at the luxury end of the market) that will allow you to create a bespoke prefab house from scratch.

5. Is building prefab a good investment?

In order to understand if a prefab is a good investment for you, there a number of factors to consider.

While they dramatically cut down the construction time and give you a clear idea of how much it will cost to complete, the long-term ROI (return on investment) largely depends on the conditions involved with the sale.

For example, at minimum, the amount of money spent on building the prefab need to be recouped when it is sold. Of course, while there is no way of knowing exactly how much the property will sell for in the future, researching the local property market will give you a strong indication. This is especially true if you plan on living in the prefab for a few years before putting it on the market.  

Similar to traditionally built properties, prefab homes appreciate in value the longer you remain the owner. Understanding the local property market over the past 5-10 years will tell you whether prices are increasing and how much potential there is to make a good profit on a sale.  

The same principle also applies to the rental market. If you are thinking of building a prefab to rent it out for extra income, you can get a good idea of the monthly/yearly yield you can enjoy by comparing against similar-sized rental properties.

Aside from sale and rental values, prefabs are also very environmentally friendly, not just in terms of the lower carbon footprint produced during construction, but also in an ongoing capacity, helping to reduce energy bills for the long-term due to the insulation properties.  

6. Are prefabs modular homes?

While it may appear that prefab homes are the same as modular homes, there are some distinct differences between the two.

Prefab homes are based on the idea of manufacturing key structural elements before either constructing them at the factory and transporting it to the final location, or delivering the separate parts to the site before it is put together.

Modular homes are always built in a factory setting and never subjected to weather conditions before construction and delivery. There is no option to order the parts and have them delivered separately. This is a more costly option and doesn’t provide customers the potentially cheaper option of building the home themselves.

7. Are prefab homes safe?

There is a perception that prefab homes are not as safe as traditional properties due to the alternative construction methods involved. However, this is certainly not the case for a number of reasons.

Firstly, prefab homes have to be constructed to meet strict building code regulations, supported by regular on-site inspections at every stage. This is more stringent than site-built homes which only require a single inspection. Another reason prefab homes are a safe option is due to the manufacturing process. They are constructed in a controlled environment using equipment specifically designed to reinforce the structure for long-term usage. Traditional contractors do not have access to this sort of equipment when building a home on-site.

8. How long do prefab houses last?

Just because prefab houses are not made in the same way as traditional homes it doesn’t mean they are not as safe to live in. But, of course, any sensible home buyer will want to know they are getting value for money before making a commitment.

As with building any type of property, how long it will last will depend on a number of factors. The quality of materials used play a big role, as this will dictate how well it can withstand general wear and tear and external elements.

How the prefab home is constructed will also play a significant role in how long it will last. The more skilled and experienced the people involved with building it are, the more assurance you will have that it will stand up to the rigors of time.  

Also remember that building a traditional home means the materials are exposed to the elements from the very beginning of the process, while the sections of a prefab house are made within the four walls of a factory affording them better protection.

When it comes to the delivery of a prefab, because they have to be shipped in modules, the material needs to be robust enough to withstand the issues that can arise with lengthy transportation. In order to achieve this, the manufacturing process ensures the material is often a lot more reliable than those used with traditional stick methods.

9. What are prefab houses made of?

The construction of a prefab home relies on using many of the same materials associated with a traditional home. The most common being wood, steel and concrete. Of course, each manufacturer will rely on a different set of materials to suit the specifications of the build, with cost and efficiency usually being the deciding factors. Most importantly, for anyone thinking of building a prefab home, you can rest assured that the sturdiness of the materials will be comparable to anything used in a traditional home.

Should I buy a prefab home?

Where once it was thought that buying a prefab home would mean a drop in quality, that is no longer the case. Modern prefab packages offer greater flexibility, fixed costs and deadlines, as well as providing substantial environmental benefits.

They are made from materials that can withstand the natural elements and the ongoing wear and tear that comes with day-to-day living. If you want to build a home that is long-lasting, adaptable and can work within your set budget, then investing in a prefab home should be your next move.  

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