If you’ve been touring homes for sale, you might find yourself asking plenty of questions about how you might change them to better suit your style. For example, what would it take to add another bathroom? Why did the seller choose those cabinets and that flooring for the kitchen? Could the deck be converted to an enclosed porch?
As you consider making changes, you might also be considering whether you should build a home instead of buying one and how much it would cost. Here’s a breakdown comparing the two options. If you’re focused solely on initial cost, building a house can be a bit cheaper — around $7,000 less — than buying one, especially if you take some steps to lower the construction costs and don’t include any custom finishes. According to the National Association of Realtors, the median sales price of an existing home was $309,800 as of December 2020, while the average cost of building a house is $302,817, HomeAdvisor reports.
Don’t let that fool you, though. Building a house is still a very expensive endeavour that requires finding a loan (which will likely have a higher interest rate than a conventional mortgage) and paying for permits. Depending on where you’re building and what kind of home you want, it can be much more costly than buying one. Consider some of these common costs:
As you can see, these figures can vary widely based on where you want to live and the kind of house you want. The price for the land alone can be really low — $3,000 in remote rural areas — or really pricey in areas with limited supply. Don’t forget that you might need to pay for other expenses such as a garage, fencing and a driveway, as well.
Beyond the upfront cost, it’s important to look at the long-term expense of owning a home. According to a 2021 analysis by the National Association of Home Builders, the operating cost on a new home includes property taxes; utilities, water and trash; maintenance and homeowners insurance — is lower than that of an older home. Homes built after 2010 have operating costs equal to around 3 per cent of the home’s value, while the operating costs on homes built before 1960 are more than 6 per cent, according to the NAHB.
10 Tips For Affordable Home Building
In many parts of the country, the lack of affordable housing is frustrating home buyers. If that’s your situation, instead of trying to compete in red-hot housing markets, you may be looking for the cheapest way to build a house. There are many different options available to take advantage of, and building a budget-friendly home may be a doable project you want to take on.
Here are some tips to help you build your budget-friendly home:
Simplify Your Home’s Design
The cheapest way to build a home is to design a simple box. Sticking to a square or rectangle makes the building and design simple. Generally speaking, building up is cheaper than building a sprawling one-story home, so you may want to consider planning for a multiple-story home if you need more space.
If you’re worried a box-style home isn’t going to be attractive, consider that you can make the exterior more interesting with landscaping, shutters, lighting and other decor options that don’t cost a lot.
Another part of the home’s design to consider is the roof. Believe it or not, there are many different roofing designs, and they can affect the price of your home. The simpler the roofing design, the less expensive it’ll be to build a home.
For example, according to RemodelingImage.com, installing a (nearly) flat roof on a 1,500-square-foot home costs $6,000 – $15,000 on average. For a gable roof, the typical, two-pitch roof, the installation cost is $12,000 – $18,000 and up to $25,000 when you factor in the cost for asphalt shingles. An even more complex roof, the Mansard roof – with a flat rooftop and multiple pitches – can have installation costs of $20,000 – $50,000 on average.
Of course, costs will depend on a number of factors, including the size of the home/roof, the materials used, the number of pitches and the steepness and length of the slopes. Dormers can also increase the price.
Try A Tiny Home
There’s a reason tiny houses are increasing in popularity: they cost less to build and can be built on wheels for people who may wish to move in the future. You don’t necessarily need to buy a tiny home to get the cost benefits of a smaller home.
Many of your materials and labour is going to be priced per square foot. Build a 2,000-square-foot home rather than a 3,000-square-foot home, and you’re going to save yourself money. Decide to build a tiny home, which by definition are under 400 square feet, and you’re going to save yourself a whole bunch of money. The average cost to build a tiny home is about $20,000 – $30,000 for materials. Depending on whether your tiny home is mobile or stationary, you may also have to purchase land to build it on. According to the USDA, that’s about $3,160 per acre for rural land, average in 2020. However, the land cost will depend on the state you plan to live in, certain features, like lakes, and the land’s proximity to metropolitan areas. It’s also important to note that you typically can’t get a mortgage for a tiny home, so you’ll need to look at alternative financing options.
Hire An Experienced Home Builder
If you’re working with a home builder, hire an experienced one. While an experienced home builder might cost more than one with little to no experience, you’ll likely make up the cost during the building process. In addition, an experienced builder can help you figure out where to spend and where to save. They’ll probably have creative money-saving ideas. And they can help you avoid problems before they arise since they’ve likely had a lot of experience navigating problems in their career.
Save Costs By Becoming A General Contractor
If you have building experience or a large network of skilled labour, you may decide to act as your contractor and manage the home building process yourself. You may still want to work with an architect or download plans for a home from the internet.
You are acting as your contractor is one way that you can save on costs. If you can do a lot of the work yourself, this can be one of the cheapest ways to build a house.
That said, some of the work should still be done by subcontractors if this is your first time building a house. In addition, correcting your mistakes can be costly and time-consuming, so if you’re not sure of your skills, hiring a professional can save more money in the long run.
Get Your Design Plans Approved
Waiting and redesigning your home can cost a lot. For example, if you don’t get all of the necessary permits in time, you will spend a lot of time (and money) waiting for permits to be approved. In addition, any changes that you make to your building plan during the construction process can also add significantly to the total cost of the build. That’s why it’s important to get your plans approved early in the planning process before you start building.
Plus, if you start work without getting them approved first by your city or county, you risk being charged a hefty fine (or worse, having to redo some of your already completed work).
Budget, Plan And Price Out All Items
Don’t wait until the end to be surprised by the cost. Instead, create a budget and price out everything that you expect to spend on the home. While you may not have a perfect estimate right from the beginning, starting to handle the costs can help you throughout the entire building process.
Whenever prices change, or a cost gets added, make sure you add it to your budget. It should be a live document that changes as your plans change, so you always know where you are in your spending, and you don’t run the risk of running out of money.
Choose Building Materials Wisely
Different types of building materials will have different costs. Choosing cost-effective materials can help keep the project affordable. Here are a few to consider.
While using reclaimed materials like old barn doors or wood in your home build is trendy, there’s a practical reason it’s so popular: it saves money. So look for reclaimed doors, wood floors, windows and decorative items.
Not sure where to find reclaimed materials? Check Craigslist, Planet Reuse, a salvage store or find a home that is currently being torn down and see if you can salvage any of its old materials.
Prefabricated panels are wall panels that are custom-built inside a factory and shipped to the building site. Having the walls built indoors and shipped to the site ready to install can cut down on construction and framing labour time. This can help you save money because you aren’t paying for the extra labour to build and frame the walls.
Just like prefab panels, precast concrete is concrete that’s poured into a reusable mould, cured indoors, then shipped to the building site. On average, precast concrete costs less than on-site pouring because it cuts down on-site labour and can help prevent delays due to weather.
This alternative housing idea uses old shipping containers for the structure of the home. Since the structure is already intact, this type of housing can help you save money on construction costs. But, of course, you’ll need to consider the modifications you’ll need to make to the container to turn it into livable space, and costs go up if you use more than one container.
Cob is a mixture of straw, clay and subsoil. This earthen material is so thick. As a result, it provides energy-efficient thermal benefits. And since most of the ingredients for cob can be found on-site for free, you can save a good amount of money on material costs. Cob is also known to last hundreds of years and only requires a new layer when it eventually needs to be fixed.
Buy Materials At A Discount
Materials will be one of your highest costs (if not the biggest) of the job. So if you can cut your materials budget, you’ll significantly reduce the cost to build your home. When you begin shopping, ask each supplier if they offer a builder’s discount. Yes, it’s OK to ask. You may not be purchasing materials in a large enough quantity to qualify, but it doesn’t hurt to ask.
If you can’t qualify for a discount on your materials, you might ask your contractor to purchase the items for you using their discount. However, depending on your relationship, they may not charge a markup to do that for you.
Add Energy-Efficient Home Features For Rebates And Taxes
Everyone seems to be going green when building, and there’s a cost-saving reason for that. Using energy-efficient materials, including better insulation and high-efficiency windows, may cost more upfront but can ultimately save money for homeowners over the years. Consider solar or wind energy as a power source, but check to make sure that these are available in your area and right for your particular piece of land. You might also be able to qualify for rebates and tax breaks for building certain energy-efficient elements into your home.
DIY As Much As You Can
Are there certain finishes in your home you’d love to have but you can’t afford? Then, it’s time to watch some videos and give it a try yourself. Going the DIY route can save you money, especially when things like painting or laying flooring.
But not all work that you DIY will be a money saver. If you don’t know how to do some of the big jobs, like plumbing or electrical, it may cost you more to have someone fix your mistakes down the road.
What to Expect When Building a New Home
Whether you’re building a simple starter home or the ultimate abode, new home construction contains many unknowns. As a result, it can be overwhelming—especially if you’re unsure where to start or experience a hiccup in the planning process. Depending on square footage, weather conditions, and the availability of workers and supplies, the construction of a new home can take anywhere from three months to over a year.
Important Factors To Consider When Building A New Home
Are you planning to build a new house, make it your home and take advantage of the opportunity to create an ideal space suited to your needs? After all, home is where you bond with your family and relax after a long day’s work. Now that you have decided to build your sanctuary, we have compiled a list of 10 crucial things you must consider when building a new home. So let’s get to it.
Ready-Made Or Original Design
When you decide to build a house, one of the choices you will grapple with will be to choose between a ready-made design or something special with an original design. If you check out designs and construction photos on sites like Getty images, you will gauge the process and how the home looks.
For original designs, some plots of land with an unusual shape or size will require a lot of attention. You will need to work with an architect who understands your needs and listens to every creative detail to develop your dream house. While an original design can cost more than a prebuilt design, your house will be original and a space you can really relax and entertain in, and best of all – call home.
Understanding Your Own Unique Needs
You are creating a checklist of ideas, and deciding on important must-haves for any new project is crucial for your home to feel like home. For example, if you are working with an architect, communicate your ideas and get feedback. The size of the home will be important as you will want to consider the number of people living there.
Everyone wants and needs their own space. Get ideas from the architect to avoid costly mistakes like having spare rooms that make the house more expensive to maintain and build. If you work from home, add that executive study to cut business expenses. Also, position it where you can have a quiet space that will inspire new ideas and strategies.
Plan on having friends and family over for long luxurious weekends? Consider adding guest bedrooms to accommodate them comfortably. Utilities like the laundry, pantry, basements, or sunrooms for extra entertaining space are also necessities to consider.
Planning Your Space
When planning your space, there are some basic principles to consider. A living room and dining room should be located on the south or southwest side of your house. Remember, you will be spending a lot of time here, so you need tons of light in these rooms. South and southwest are usually the best sunlight positions.
Add the largest windows to these areas of your home to make use of solar power which will head the interior and make way for the garden. Think about this, depending on where you build your home in the world. You can potentially save up to 20% with the use of solar energy.
Another factor to consider would be to divide your house into zones. For example, the day zone, or spaces you generally use during daytime hours, can consist of a living room, dining room, kitchen, office, guest bedrooms, bathrooms. Design your home to separate these areas from the night zone, master bedrooms, adjoining baths, and walk-in closets.
Getting The Right Materials
Using the right materials is a very crucial factor in design. A good home should be able to last for decades, be sturdy, and be well-constructed. Think about the availability of various possibilities in construction technology. You can opt for ceramics, concrete, wood (including wooden beams to accentuate the home), or the most expensive materials. You may also use a majority of prefabricated elements, which can save you money and construction time.
Optimal energy efficiency can also be achieved by using the right building materials. An environmentally efficient home will save you a lot of time and money in the long run because it will need less energy to heat and cool, resulting in affordable energy bills.
Mineral wool, foamed polystyrene, or polyurethane foam are some insulation materials that can be used. The amount of material used and the selection of the most effective in a given category is important.
Materials used in the construction of your home will affect the building’s acoustics. Staying in noisy surroundings can affect your health, so it is critical to take special care by insulating your home for sound. You don’t want to be disturbed by echos in your home.
Lighting And Automation
Having the correct lighting installations is integral to add a special touch and some warmth to your home. Effectively illuminated elements of the house bring out the beauty and charm of the architecture, creating an atmosphere to be desired. Lighting adds a special ambience to a garden, allowing you to admire and enjoy the landscaping in the evening. To keep your home safe, lighted driveways and garages provide much-needed help.
When designed, a modern house should consider the addition of smart home elements. Modern building management systems help optimise energy consumption by controlling the central heating system, air conditioning, heating elements in the floors, sprinklers, blinds, and even lighting and alarm systems. These amazing technological advancements have allowed people to remotely manage their homes and give a sense of added security and a homely feeling – even when you’re away.
Energy efficiency and a degree of independence from the power grid using photovoltaics can help to save the environment and lower or eliminate your utility bills. Although this technology requires an initial investment, it will pay off.
Set A Budget
Now that you already know your needs and wants, it’s time to talk about money. Using your checklist, research how much each item will cost you, then determine if you can afford it. Remember to include the property taxes, any down payments you need to make, factor in labour and materials cost.
This is a great place to figure out priorities and move things to your wish list if you are working with a limited budget. Alternatively, you can talk to your bank about a construction loan, so you cover all bases. A construction mortgage may, however, not cover the following costs:
Hire An Architect
This is perhaps the most crucial person in the construction process because they bring everything to life. First, you need to discuss the project with them to come up with the drawings, floor plans, and cost estimations. Also, they will help you during the contract stage when hiring a contractor, electrician, plumber, and the rest of the team. Finally, they will look at the building site and work with the home builder to determine the product cost, advise on the fixtures and finishes, among other duties. Think of an architect as the project manager.
Understand Government Regulations
Every area has building rules and regulations that must be followed, commonly referred to as building codes. These range from material use to the paint colour you can use. In most states, you must also meet specific safety measures before construction begins. Building codes generally govern the design, alterations, and maintenance of structures within a given area. They give the minimum requirements builders must meet and safeguard the health, safety, and welfare of building occupants.
Think About Resale
As a home builder, selling is not on top of your mind when starting the building process. However, you can’t afford to ignore the real estate industry because life is unpredictable. You may need to relocate for work, so you should have every advantage when you decide to sell. Before you start building a home, consult a real estate agent and understand the home market in your area. Talk about the resale value of the type of home you want to build, how much land you should spare for the yard, and other things homeowners look for when buying an existing home.
This information will help you avoid unnecessary upgrades that will overprice your house. Also, you won’t necessarily choose anything out of the ordinary but go for more functional spaces. Think of a functional kitchen, enough storage, the right flooring, and even the floor plans, which attract home buyers. This doesn’t mean you won’t get anything you wished for, however. You will still live in this house, probably for a long time, so cut yourself some slack install a few things you really want.
Cater For Hidden Costs
Now that you have your land, house designs, hired the right people, and are ready to start building a house, it’s time the rubber hit the road. But, before that, set aside a buffer account. Like remodelling an existing home, things could go sound real fast during home construction. Start by providing all the necessary materials, including a constant supply of water and electricity. Usually, cost overruns result from inaccurate project estimates, significant design errors, change orders that weren’t planned for, poor site management, and not hiring the right team.
A lot goes into building a house. As you think about building materials, going green to save on utility bills, land purchase price, and floor plans, remember to keep stress at bay by being excited about your new home. Think about soaking up in your new tab or enjoying the yard with your friends. This way, you will remain excited about the project and focus on finally living in your dream home.