How to Save Money When Building a House
Building a home is an exciting and potentially costly endeavor with more money going out than coming in. With all the excitement, it can be easy to get carried away and lose sight of some opportunities to save a few bucks. Fortunately, it's easy to find some places to save money with our method below!
1. Do Your Research on Prices
The first step to saving money is knowing exactly what you have to work with, and what your end-goal really is. At the end of the day, the numbers don’t lie, so knowing the potential risk is critical in saving money in the long run. Unless you are paying cash for your home, you will have to contend with a mortgage. Most importantly here is knowing when to strike- interest rates are a cost that can keep up with you year after year, so buying at the right time to take advantage of lower mortgage rates could save money in the long run. Other factors to consider are the costs of the actual materials and labor. At the time this article is being written, the price of lumber is nearly triple what it was the previous year for the same pieces; is your dream home worth triple the cost than it was to you last year? Taking a look at the overall trend of the largest expenses your home will incur is critical to saving money.
2. Shop Around for Builders
If you have the ability to choose your own builder, you are at an advantage. Some private communities, you will be subject to whomever the association has already approved for the construction of your home. This is like someone else spending your own money! By having your own builder, you will benefit from having a custom approach to your new home without spending money on things you may not want or need. If you have multiple offers for a building company, then you are ahead of the game. Multiple offers give you a broader scope of the costs to building a home and more information to make a better decision. Of course, get it all in writing!
3. Purchase Your Own Materials
Builders generally have relationships with bulk retailers that get you good wholesale prices, but there are some occasions where you can find materials on sale or just cheaper. Taking the time to shop around for deals yourself on some materials could save you costs on shipping and delivery. It’s possible you may find someone with extra materials who can let them go cheap, or even free if you put the time in! This could save thousands on building materials.
4. Buy Used
Buying materials on-line has numerous advantages, such as free shipping in many cases and assorted coupons to choose from. Similarly, sites selling building materials may have closeouts or sales on older products, and in some cases you may be able to find some refurbished appliances. Refurbished materials could cost a fraction of what they may go for new. Taking it a step further and installing it yourself would save even more!
5. Install On Your Own
We each have our own level of comfort when it comes to home repairs, but installing a new oven can be quite a bit easier than installing a garage door. Grabbing some used or liquidated kitchen appliances and becoming familiar with how to install them yourself could save thousands in up-front costs, assuming the materials or appliances are in good condition. Another area where DIY can save money and improve the overall appearance of your home is in painting and faux-hardwood type floors. Painting is a relatively low-impact and cost effective thing you can do yourself. Floors might take a few extra tools, but you can save time and money by installing them yourself.
6. Survey Your Own Land
One of the biggest areas where you could easily save money is by surveying your own land. With a bit of knowledge and the right tools, being able to locate the boundaries of your property yourself could save hundreds if not more on hiring someone to do this job for you. First, you will want to check with the town to see the property assessment which will give you a pretty good idea as to the shape and boundaries of your property. Next, you will want to pick up a magnetic locator; this will help you quickly and easily locate the long iron property markers at the borders of your land. Taking some time to mark out the boundaries yourself not only saves you money, but further familiarizes you with your new plot of land.
7. Consider Alternative Materials
Oftentimes when customizing our own home, our dreams are not in line with our savings account so we might need to make some concessions. Marble countertops are very nice, but also very expensive; by opting for a fake stone countertop that looks as good as the real thing might be a happy medium between luxury and affordability. Another popular option for materials that look great but may not be 100% authentic are fake wood floors. As mentioned, they are easy to install yourself and can upgrade the look of a home significantly.
8. Plan Future Upgrades
Another area where you could save some money is by planning to upgrade certain parts of your home down the road.You will likely be living in your brand new custom home for a while, so be in it for the long-term. By selecting standard options for appliance and lighting, and upgrading them individually later, you would save money in the up-front cost of lighting and using your home. Having a low or zero interest credit card might be a good option to facilitate these down-the-road type purchases to help spread the higher costs of upgrades out over time.
9. Spend Smart
There are some smart choices we can make when designing our new home to help not only keep costs down, but to help us make back some money down the road. Adding features to a home like larger cabinets, vaulted ceilings, closet space, and other features that add value to your home are worth considering. Solar panels could add value to your home, but might be a big up-front cost; checking into state sponsored programs or incentives for going solar or more energy efficient saves homeowners thousands of dollars. Energy-efficient appliances are the new normal, however it is still important to weigh out the short term costs and long term savings to see what kind of shape you will be in down the road.
10. Request a Complete Cost Breakdown
Ultimately the only way to know what you’re spending is to see it laid out in front of you. By requesting a total breakdown of the costs of completing your home, you can take a close look at finalizing your plans. It also allows you to run the numbers to make sure the original budget matches up with the final figures. With you and your builders all on the same page, it’s time to sign!