Posted in Home And Housing

What is the true cost of building your own home?

What is the true cost of building your own home? Posted on August 10, 2015Leave a comment

Sometimes, if you want a job doing well you have no choice but to simply do it yourself. That can easily be true when it comes to your home. This is something so personal to you – the place you and your family share all those private moments and your little slice of the earth, the place you can shut the rest of the world away.

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Building your own home has a long tradition in markets such as Japan, Australia, Belgium and Germany – with about 60 per cent of the new homes said to be constructed by the people who want to live in them. In the US the figure lags behind at about 40 per cent.

It’s a dream for many people, but it’s also a fairly daunting prospect. The planning, preparation and construction of a home is no easy task.

So, what is involved in the cost of building a house and how much is it likely to set you back if you choose to make the dream a reality?

*You will need to purchase some land – prices will vary wildly from state to state and plot to plot but it’s important to buy somewhere that is the right size and shape for your demands. While your home design can change over time, the land cannot.

*Next you will need to transform your idea for a home into a physical plan. It’s probably worth finding an architect with knowledge of the rules and regulations for your state. There are plans that you can download as a useful starting point – but you’ll need help to make sure these comply with the rules where you are and to tweak it to suit your needs and expectations.

*Next you must decide whether you will be employing a builder or whether you will be leading the construction process yourself. Taking the lead for yourself will cut costs – but will pile pressure and stress onto your shoulders. You have to be realistic about your skills, expertise and time when weighing up which route to take.

*If you’re using builders you must get the contract right to ensure everything runs smoothly. You can choose a ‘fixed’ or ‘cost plus’ contract and you will need insurance in place. Make sure you research Course of Construction Insurance, General Liability Insurance and Workman’s Compensation Insurance and get everything place before a single spade is wielded on your project.

*It’s also always worth setting aside a contingency. You cannot afford a hiccup to throw your project off course – make sure you have back up funds saved for any eventuality.

So, what does all of that come to? Well it does depend on circumstances. Different states, cities and streets command different prices for homes – and it’s no different when it comes to building your own.

However, this breakdown on the National Association of Home Builders website is a useful guide. Taking in the land purchase and construction, it shows that the average single family home cost a shade under $400,000 – a figure that is likely to have risen further since the calculation was made.

It is, of course, possible to do the whole process for much less. But, unless you’ve got a flair for the unusual and quirky, keep in mind the true cost when weighing up whether or not it’s time to take charge of your home project yourself.

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