Construction company offers payment plan to build homes
Developer Firmway Enterprise International says it has seen more than a doubling of its client base since it decided to allow customers to pay for construction of their homes in monthly instalments.
The company has tailored payment plans, which require customers to procure the building material for their own home, while paying portions of the labour costs over time.
Firmway owner Edgar Cobourne, who has around 15 years' experience as a contractor, said a slowdown in the number of jobs he received and the difficulty experienced in collecting from clients prompted him to introduce the payment system.
"We realised that a lot of people had unfinished houses where there was no roof, door, or windows. We thought we could tap into that market where, instead of not working at times, in doing something like this, we have work all the time," the builder said.
The idea first occurred to him seven years ago when he noticed a trend in the homebuilding market - persons were often able to afford building materials but could not find funds to pay for labour costs.
But with the payment plan that stretched out their costs for labour over time, homebuilders were able to meet their obligations.
"We found that people didn't hesitate to pay," he said.
"The first thing we do is go and look at the place that you have. Then, we do an estimate in terms of material and labour costs, but clients have to demonstrate that they can find the material cost, so as not to hold up the work," he said.
The homebuilder makes a down payment and monthly instalments are usually facilitated by salary deduction or direct debits to Firmway's account, Cobourne said.
To offset any losses, Firmway takes collateral in the form of car titles, furniture, or other assets. But so far, Cobourne said he has not had to cash in on any of these assets because the payment plans negotiated are usually broken down into manageable chunks for the client, and he is flexible when persons request time to pay.
"Sometimes they can't pay this month and they call, but they always pay up," he said.
He charges no interest on the funds owed by clients in the first year of the payment plan as an incentive for persons to pay off their debt early. But if they don't, then they are charged interest. However, Cobourne declined to say how much interest he tacks on in such circumstances.
"It would be impossible for a house to be finished within a month or two. So at any rate, we would be working and not getting any interest. It's only fair that we pass that on to our clients," Cobourne said.
NO SPECIAL APPROVAL
The building contractor told Sunday Business that the payment plan needed no special regulatory approval as he was already a registered developer with the Real Estate Board.
Firmway is now considering setting up a second office in Montego Bay due to demand. Over the last four years, the small company has nearly quadrupled its staff from four to 15.
"We get about 10 calls per day, but we shift through and see who we take," he said.
Demand for Firmway's services has been coming from Montego Bay, Negril, St Thomas, St Elizabeth, Kingston, and St Andrew, Cobourne said. The company has also been approached to undertake larger projects such as apartments through the same payment plan, he said.
"If we were doing two houses for the year before, now we are doing four to six," Cobourne said.