Building a house is a major dream for some people, it's putting a home you designed on the earth for generations to come. But the cost to build a home is a hugely debated subject online. You hear some say you can save money, but you will hear many tell you it's more cost effective to just buy one. Here we go into why this is debated, what you can expect the cost to be and what really effects the price. Especially in the year 2020. Also where should you really start to figure out the true cost to build a home.
What is the Cost to Build a House in 2020
The Consensus, is it reality though?
The average home cost is said to be around roughly $300,000. This is calculated by companies looking into statistics. But hopefully you don't see that and just move on. Because it has nothing to do with what you will spend. If you think about how averages are calculated, they should be taken with a grain of salt. It's just an average of the highs and the lows, not what you will spend.
The online consensus it completely mixed, what a surprise right. Almost everything online is debated with mixed view points now, it is getting harder and harder to get accurate researched unbiased information. The truth is, there are so many factors that go into the cost to build a home. No one can tell you the true price till you put in the time to find out yourself. Doing about a months worth of homework, using excel sheets, getting quotes and then market comparison is key.
What Effects the Cost.
Construction Company vs. DIY:
You may think right away a DIY home would be way cheaper of course. Well Yes, while it can be, that is not always the case. Construction companies have tools, bulk purchase power, select vendors, licenses and permits. But they also have labor, which can literally double the price of everything else needed to build your home. Huge trade off isn't it! While you may not have a handy bone in your body and no choice but to use a company. It doesn't mean you can't be smart, do your due diligence and get a good price. We will dive into more of this, but shopping and comparing is going to be your main driver.
Now, those of you who know how to build or are willing to learn. You have several options and more homework to do of course. Get ready to be on the phone, calculate prices and be a savvy buyer.
- Experience: Large company vs. small contractor.
A large company is usually precise, has skilled workers, good insurance and past builds to view. You might pay more but have less issues and a better product. You will need to price shop heavily though and consider your timing.
A small contractor can be good as well, also much cheaper. But at times people can be horribly disappointed with difficult legal recourse options. They may hire temp workers to help them, unskilled workers that would lay a floor with poor workmanship. Then you will have to fight them to redo it and the whole thing becomes a nightmare. Also expect things to take longer. This doesn't go for all small contractor companies, some are amazing and house builders or flippers wouldn't use anyone else. But make sure you know how to find a good one.
- Price Caps: Does the contract have a price cap the company is willing to hold true to. Either a large company or contractor may be willing to hold true to a price cap. Because things happen, a company gives you a quote then comes to you with issues that happen. All of a sudden they need more money to finish your home. What choice are you going to have really, get a company that is willing to put this in a contract.
- Market Conditions!!!!!: Can't stress enough how much this one matters when building. When the housing market is healthy, homes are selling well and construction is happening everywhere. Then it's boom town for developers, and you will be very limited in finding a building company to work on your home. It is supply vs. demand, when developers are doing bid wars for construction companies, don't expect a great price. But, when the housing market drops and developers stop. Construction companies will bid for your job now, that is when things are in your favor.
Do it Yourself
- Materials: Given you would be planing and building yourself or with a small crew. You would have to shop for your materials and be smart about it in order to save money. For the most part you want to use the same companies a professional crew would use. Not the major department stores in your area, while they are fine, they probably won't have the cheapest price for bulk. You want to use building material places, usually warehouses stacked with pallets who deliver daily. Another thing is, don't be thrown off by small price differences meaning nothing. Something like a few cents off for stick on stone will go a long way in bulk. If you order two pallets and each stone is a few cents different between stores. It will add up and the more you do this, the more you will save. Also factor in tools needed, remember you can rent these if needed!
- Labor: Are you doing this by yourself, with friends, family or hiring a few people. It may be smart to get some people willing to work with you, even if you need to pay them. Depending on the job you are taking on, like a small build vs a large build. It will go faster and you are less likely to break your back on the heavy lifting. So factor in this cost and expect to go longer than you think just incase.
- Permits: Do you have experience getting permits approved, having building inspections and is a contractors license required. Things like this should be looked into before you start. Last thing you want to do is tear down a home after building it.
- Knowledge: Do you know absolutely everything or will you need some help. Things like plumbing, framing, electrical, foundations will come into play at some point. Hiring a plumber or electrician might be essential, so try to get quotes on that first.
Type of Home Makes a Big Difference
Probably the most obvious price factor is the size and type of home you are planning. You can build homes for $10k like a dome home using AirCrete, which we have extensive articles on here, Everything AirCrete. On the flip side, you can be planning a huge home on a remote ranch. Which you can expect to need help on, or a large company. Plus major expenses due to distance they would travel for supplies and labor.
Materials are also a big factor, you can build walls, roofs, interiors and exteriors in so many different ways it will spin your head. Some of the largest savings will come into play on materials. If you get creative and are flexible, you can not only save money, but build a more unique home than the rest. The basic wood framed box home is so common at this point, it is refreshing to see something different. So explore online for some great ideas.
Here are some examples:
Using Truck Crates - Beautiful when done right, can be sealed and protected from the elements. Also a very cheap exterior and unique eye candy for resell value.
Using AirCrete - Much lower cost and has many properties to make it better than cinderblocks. A child can also pick these up they are so lightweight, thus making them the DIY building material of choice at times.
Unique Interiors - This is an example of using concrete as your interior, floors, walls and even countertops. It can be done in many creative ways and water sealed. Finished concrete can be very luxury looking and impressive when done right, also a lower cost than marble.
How to add up the Cost
Here we will dive into the nitty gritty of building a home in 2020. While it is up to you to figure out the cost based on the type of home. This may help give a very rough estimate. The key is to understand what you need, price compare and then add about 10% for possible issues. If you don't end up using this extra cash, at least you had it ready.
DISCLAIMER: The prices will vary greatly based on country, location, type of home, time frame and materials. These are very basic averages and should not be used as your end all quote to get started. Like we said, you can build an AirCrete home for $10k or a mansion for millions. There are so many factors for any calculator or range to give an accurate idea. With that, this will at least help you think about what is needed.
Average Prices in 2020
Land & Landscaping: Open You will have to know the cost of your land and what you need to clear the land, road and build site.
Land Survey: $300 to $600
Machines & Tool rental costs: $100 to $1000+ a day depending on need.
Basic day labor: $20hr-$30hr
Skilled Workers: (electrician, plumber, framer, contractor, roofer): $40hr - $150hr
Finish Int & Ext walls, windows, roof & doors: $20,000 - $50,000
Plumbing, Electrical, AC, Septic: $10,000 to $40,000 depending on what is needed.
Floors: $500 to $4000
Kitchen: $12,000 to $30,000
Bathroom: $2,000 to $8,000
Lighting: $70 to $200 per light using electrician
Furniture & Appliances: Open
Cost Changes: Size & Shape, How Many Stories, Materials Used, Pool, Decks..etc.
Additional: Add 10% to 20% extra to your costs just incase it is needed.
Clear as mud? How about start with this instead.
1. Use google images to find a home that is pleasing to you. Use terms like cheap homes to build, Modern home designs, Unique homes or homes based on the square footage you want...etc. Once you find a few homes you like, print them out, read extensively on them and talk to an architect.
2. Contact the county building department to find out what is required, prohibited and cost for permit approvals. It is free to get this information and will save you money before you start.
3. Find an architect if needed and work with them to design your home.
4. Get baseline contractor quotes from at least 3 companies using the blue prints.
5. Download these excel templates to estimate building costs vs. budget. The Building Advisor
6. Using the blue prints, do extensive research on the cost for the total amount of material needed per step. This means getting price quotes form different places and track into your excel form. Don't forget tools and any rentals you need.
7. Visit a couple experts, hire a contractor for a few hours and pick their brain. You may get a ton of great information from this. Even building supply companies usually have knowledgable people.
8. Calculate the total cost and add about 10% for error, hopefully you will not need it but it is a best practice.
9. Use the total cost you came to and compare the quote received by construction companies. Also compare your local real estate market to check the for sale values.
10. If it all makes sense and you are ready, have at it. You can join some building forums on line to ask questions and get support. YouTube is also an amazing tool for everything home building. Visually watching someone lay floors will guide you quite well. For motivation, search youtube for DIY home building projects. There are people who will show pictures along the way of their home build. It is very impressive what a few people can do over the summer. Some of them without ever having previous construction knowledge did some amazing homes.
We hope this article helped a bit, please do us a huge favor and rate the article below.