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Looking for the Cheapest Way to Build a House? Try These Money-Savers
Normally “cheap” isn’t a word we like to hear about the construction of our homes. But as Penny Hoarders, we know there are ways to build a house and save money at the same time.
And with the real estate market going crazy for existing houses, now might be the time to consider building your own house instead of buying.
You may think you’ve picked up lots of tips from all those trendy home building and remodeling shows on TV. Lots of ideas, too. But remember, each extra idea costs money. Think for a bit — do you really need a pot filler for your kitchen or reclaimed hardwood floors in every room?
Let’s look at how you can use planning and a little know-how to find the cheapest way to build a house and still get what you want.
A plan and a budget are not the same thing, but a plan includes a budget, and much more. That’s where to start the home building process.
Be honest with yourself during this stage, says architect Donald Ruthroff, principal of California-headquartered Dahlin Architecture Planning and a member of the National Association of Home Builders.
“I can work towards any budget, but you have to be honest about the money you have,” Ruthroff says.
Consider all aspects of your build. Your plan should include the following:
Many home builders will handle things like land, permits, materials and people (including contractors and subcontractors) so you don’t have to think of all of these things on your own. One of those builders is Cincinnati’s Cristo Homes, where Michelle Fletcher is a new-home sales counselor.
Experience has given Fletcher some insights that help at this stage of the home building process. For instance: If you plan on making additions later, such as a finished basement, a laundry room or a wet bar, it’s better to include rough-ins in your initial build.
“It’s going to be much more expensive later to add in a bathroom if you have to jackhammer the floors and you have not done the plumbing for that,” Fletcher says.
A general contractor is the person who will be responsible for the oversight of your home construction process on a daily basis. They are usually the ones who order materials, subcontract with tradespeople, oversee the quality of the work everyone performs, and more.
To save money on your dream home, you could serve as your own general contractor. But beware: This might seem like a good way to build on a budget, but it could end up costing you more in the end.
Before making the decision to be your own contractor, here are some questions to ask yourself:
Experienced contractors often know how to anticipate cost overruns and build them into their budgets. They know where to save, where to spend and how to find the subcontractors that can get the work done.
“Good luck,” Fletcher says about going it alone. She points out that professional contractors have relationships and buying power with vendors. “If you go at it yourself, you’re going to overpay for everything and it would probably take years to build a house.”
We all have ideas about what our perfect house looks like, but if you’re looking to build on a budget you can’t have it all. Simplifying the design of your new house can help save.
Don’t get so caught up in the dream that you lose track of what all your “wants” are costing.
As part of your design process, Ruthroff suggests collecting images of whatever catches your eye. “The more you have an idea of what your likes and dislikes are, the better off the process goes, and that in turn saves you money.”
Building with basics with plans to upgrade things like finishes later can save some money when you build a house.
Some interior tips:
“I would have a discussion if we’re on a budget about how often you’re going to use that (item),” Ruthroff says. “Maybe you would rather have a few more square feet in the adjacent bedroom or a bit bigger closet. If we take that tub out, I can take that square footage and use it in a closet that you’re going to use every day.”
A designer or contractor can help you decide when to splurge and when to save in interior design.
Flooring is one place where it could be good to spend a bit more, Ruthroff says.
“In my own house, we spent the money to get engineered hardwood because we have a large dog,” he says. “The floors have stood up. I’m so glad we spent the money there.”
Another possible place to splurge, he says, is kitchen countertops because you see and touch them every day.
Appliances can be an area to save, he suggests. “Pick carefully for how you will use them. Do you really need the (high-end) range?”
There are many ways to build a house and many materials you can use during the home building process. Choosing the right materials can cut costs.
Home builders like Cristo have already done the number-crunching for you. Here are some examples of materials that can save dollars:
It’s important to know what is allowed and what is not. In many places, municipalities and building codes limit what materials you can and cannot use.
Also, look for rebates and tax savings on some materials. These often cost more upfront, but benefit you later.
Homebuilding companies like Cristo have done a lot of the penny-pinching already. They have relationships with suppliers and others that will save you money because of volume discounts.
They also often have design options and packages to pick from that combine many cost-saving approaches. Reducing the types of floor plans and finishes can also help you find the cheapest way to build a house.
Whether you go it on your own or you’re working with a builder, it’s easy to make mistakes when you build a house.
No matter how much planning you do, things will change along the way and you will make mistakes. That’s part of taking on a huge project like building a house. But, Ruthhoff warns, it’s important not to second-guess every decision you make.
The number of decisions you’ll make while building a house can seem overwhelming, but making changes can lead to slowdowns that cost money.
Make sure your home stays within the range of others around you. “People over-spec,” Fletchers says, referring to the habit of adding to the cost of a house without adding to its value.
You might have the most expensive house in the neighborhood because you’ve opted for pricey finishes and custom lighting but, “unfortunately, the appraiser doesn’t give value for a lot of those things.”
Keeping your eye on the prize is also important. This is your house and in the end, it will be filled with what you want, while hopefully saving money.
Fletcher has advice for home builders who fret about “having the best.”
“The best comes with a perspective,” she says. “You have to step back and say, ‘Is that really want you need?’ It’s OK to want a showpiece as long as it fits in your budget.”
Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.
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