Buying or building a home is the most expensive purchase most people will make in their lifetime. In recent years, the costs of building a home (and thus of buying a home even if you are not building) have increased at a higher rate than average.
This increase is taking place for several reasons, including an increase in demand for building supplies, and rising costs for raw expensive materials. Labor costs have also increased over time.
While building a home is an expensive undertaking, it’s also a long-term investment. And, building your home smartly means that you can make the most of that investment. Spending wisely is key to “smart” investing when building a home.
Here are 7 tips to help minimize the cost of building a home:
One of the most affordable ways to build a house is by choosing a compact design. Most custom builders price new home construction by cost per square foot. Thus, a compact home design is one of the best ways to cut costs when building a house.
Not only can a compact design sit on a smaller lot (thus saving on the cost of land acquisition, landscaping, and even property taxes over time), but fewer materials and hours of labor are required to complete construction.
Getting rid of underutilized space is an ideal way to create a compact home design. Skilled designers are also able to create flexible home designs that require less space to achieve the same lifestyle benefits you expect from a larger home.
A fortunate few might not need to make trade-offs when building a new home, but for most of us, the sky isn’t the limit when it comes to budget. With this in mind, we’ve ranked where you should focus your funds in order of priority to make sure you minimize the costs of building a home while maximizing your end result:
Before you even consider the best ways to cut costs when building a house, it’s important to make sure that you have a functional, well-designed home that considers the quality of space. A well-designed, functional home has the ability to see you through many stages of life, meaning you can live in the same home for a very long time. The quality of space will ensure you love living in your home and enjoy the day-to-day experience of being in your space.
Pro Tip: Before you start designing your new home, check out Questions To Ask When Designing a House – it’s a great guide to follow when building a new home!
Once your home is built, you can’t “re-do” the construction phase. Poor workmanship, using construction materials that are not well-suited to your climate, or using poor quality materials for the base construction of your home (think building envelope, foundation, and framing) may save you a few bucks now, but can lead to major headaches and major costs down the road.
Make sure that you work with a reputable builder, and that your builder prioritizes workmanship (no cutting corners!). Ensure your builder hires experienced and reputable tradespeople who have experience working on homes similar to yours. Don’t be afraid to ask for references! As we’ve noted in our blog, “Things to Consider in a Hot Real Estate Market”, waiting for the right builder is worthwhile.
Consider if you should engage any consultants to help with the project. This usually is not required for residential construction, but may be required based on:
Now that you have a functional home design that you love, and you’ve engaged a reputable builder, it’s time to focus on the elements of your home’s design that are costly and/or difficult to change. We do a deep dive on these considerations in our blog, “What Makes a Great Kitchen?”, but at a high level, it’s difficult and expensive to change windows (especially window size!), flooring (you have to redo trim, too!), cabinetry, and roofing materials.
We recommend buying the best quality you can afford for these design elements. When it comes to color and materials options, choose natural materials in neutral colors – they will stand the test of time and rarely go out of style.
Unlike windows, flooring, and cabinetry, other design elements are (relatively) easy to update or more likely to change with short-term trends. You can cut costs when building a house by saving on these design elements and updating them down the road when your budget allows.
Kitchen countertops and hardware like cabinet pulls, doorknobs, and towel racks are very easy to change. If you are budget constrained, opt for less expensive materials during the construction phase.
Window coverings need to be functional (we are all about black-outs for bedrooms in my house), and certainly a poor-quality window covering can ruin the look of your beautiful new windows. However, there are many moderately priced window coverings now available that are both functional and attractive.
You may be surprised to learn that faucets and lighting present a real (and often overlooked) opportunity to cut costs when building a house. Faucets and lighting also tend to be more trendy than other design elements (possibly because they are so easy to update!) While we drool over designer lighting on the regular, you can purchase budget-friendly versions of your favorite style and upgrade to the real deal down the line.
Finally, when looking for ways to minimize the costs of building a home, consider what costs you can defer for months or even years! Depending on your needs and lifestyle, these elements may include:
It may sound like trite advice, and certainly, no one expects to run over budget when they start building a home, but following these tips may be one of the best ways to save money when building a house.
While there is a lot to consider when building a new home, choosing a well-designed house plan, prioritizing your spending, and taking the time to plan the details of your project can all help you to minimize the costs of building a new home.
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