New Home Construction Costs –
Staying Within Budget
In a perfect world, cost wouldn’t be a factor when you’re building a new home. In reality, a budget is a must for a new build.
Creating a budget in the pre-planning phase will help you make build decisions and keep you focused on the features that matter most. Staying within the budget is the goal, but that’s often easier said than done.
Making a new home construction budget you’ll be able to stick to throughout the build is easier when you use these tips.
Talk With the Experts
At myHouseby we help facilitate the homebuilding process by connecting you with home construction professionals and eliminating a lot of the work involved with getting your project underway. One of the major milestones is getting financing for the project secured. You probably have a pretty good idea of the budget you’re working with in terms of how much you have for a downpayment and the monthly payments. However, it’s a good idea to talk with a few experts that specializes in home financing and construction to nail down the specifics.
You can also use the tools at myHouseby to get a better idea of the type of home building budget you’ll need. Our mortgage calculator will break down the costs of a construction loan, and the real time pricing updates on our home plans show you how much certain upgrades will add to the budget. Since there may be other possible upgrades, keep in mind the final cost could be slightly higher.
Talking with these experts and using these tools will answer the first and most crucial questions, “How much home can I afford?” and “How much would my dream home cost to build?” From there you can begin creating a realistic budget.
Begin by Budgeting for the Absolute Must Haves
Every homeowner has a list of must haves that they absolutely won’t budge on when they’re buying or building a home. These are things like number of bedrooms, square footage and land/location.
The must haves are the basis for your bare minimum budget. It’s everything that needs to be in place the moment you move in.
One thing to keep in mind when you’re budgeting for the must haves is material selection, which can significantly impact the budget. For example, you need to account for the cost of a roof on your new home. The cost of 20-year asphalt shingles is around $100 per roofing square (100 square feet) whereas slate tiles can be upwards of $2,000 per roofing square. Making material decisions now will help you stay within budget once construction begins.
Decide What Can Be Added Later
Some features and additions are easy to incorporate down the road. Others are nearly impossible and very expensive to add later.
Create a list of all the nice-to-haves that aren’t essentials and can be added later on when you have extra cash on hand. These are things like crown molding, a back patio and a chandelier in the entry. If you’re the DIY type you may even be able to save money by adding these extras yourself after you move into the new home.
Add a Contingency Budget
A contingency budget is an extra amount that’s set aside for all the unexpected expenses. Trust us, no matter how well you plan and budget there’s a good chance additional costs will crop up along the way. If you have a contingency these unexpected expenses and additional upgrades are already covered so you don’t have to worry about going over budget. And if you don’t come across many unforeseen costs you’ll have extra money left over for a few upgrades.
A good rule of thumb is for the contingency budget to be at least 10% of the total expected cost. It’s even better if you can allot 15% for the contingency. By setting aside this reserve upfront you’ll avoid financial shortfalls that delay construction and increase your expenses.
When you’re working with a budget, it helps to have a team that can coordinate schedules and keep the build on track. That’s the benefit of getting concierge services from myHouseby.com! We’ll help you find affordable home plans that you can customize yourself and provide assistance throughout the entire build process at no cost. Give it a try today!