This article will show you how to save thousands when you build your new home. The ideas here can save you $50K to $150K on financing alone. When used in conjunction with other ideas presented here, to keep the initial costs low, you could conceivably save $200K or more.
How to Save Thousands When You Build Your New Home: Smaller Homes Pay You Back
It is very trendy in the 21st century to build smaller more efficient homes. Most homebuilding magazines recommend that you build a home about 25 percent smaller than your prequalifying price range allows. In the luxury category the difference in size is even greater. At one time many luxury homes exceeded 5000 square foot. Today’s new luxury homes should be between 750 and 2500 square feet. Building smaller is trendy and it saves on building costs and utilities. For every 20 square feet you subtract from your home, you save about $2000 on conventional construction, and at least one dollar off your utilities each month.
Any extra expense given towards energy efficiency will reimburse you completely in less than ten years. Over 5 inches of closed cell insulation or polyurethane and radiant barrier insulation saves hundreds of dollars each month on your heating and cooling costs. These savings continue for as long as you live in your home.
Having a homebuilder build the frame and exterior of the home, and competing the interior of your home yourself can save you $30 to $40 per square foot. The average cost of a shell is generally less than $30 per square foot plus the cost of the foundation. You will still need to hire and electrician and probably a plumber, but the rest of the work is manageable for most do it yourselfers.
There are many different types of kits, panel kits and log kits are the most common, but there are others, including stick built kits. Kits feature pre-cut lumber, and instructions. Some people can simply take it from there and finish the home, but others hire workmen to help of a contractor to build the kit for them. Some kit manufacturers will even send a crew to complete the kit for you at a reasonable fee. Kits are faster to complete, and save on labor no matter who does it.
It is possible to build a shell home with any type of panels in one day, but the job requires a crane. Still there is a significant savings in labor. Common types of panels are insulated concrete panels, structural insulated panels and log panels. It is important, when calculating the cost of different types of panels to consider what each type of panel replaces. Log panels replace studs, sheathing and exterior siding. Structural insulated panels replace studs, insulation and sheathing. The also serve as a roof system, eliminating the need for framing entirely.
Concrete insulated panels replace exterior siding, sheathing, studs, insulation, interior wallboard, and can be used as a roof system as well. Concrete panels are the most durable, and are maintenance free if never painted. Some panels come pre-dyed in order to be completely maintenance free. Even though concrete insulated panels cost a bit more initially, their insulation properties, their durability and the fact they require no maintenance assures a lot of future savings.
By finishing your home yourself you can save a lot on interior materials. Shopping at salvaged building materials companies, looking for remnant carpet bargains, and using various discounted materials creatively can save thousands, and even tens of thousands off the standard, commonly used products.
Once you’ve whittled down the cost of your home with other money saving strategies a 15 year loan becomes easier to manage. Financing your home for only 15 years, rather than 30 can save tens of thousands of dollars and give you financial freedom from debt in 15 years or less. Extra payments can cut those financing costs significantly as well. 30 year loans are designed for maximum bank profits, and a lifetime of payments for you. Don’t fall into that trap.
By saving on the initial cost of your home, and paying off the debt quickly you can save well over $100K on the cost of your new home. Saving money when building a home starts by trimming the size, and working towards maximum energy efficiency. If you are able to do some of the interior work yourself, you can save even more, but the best tip of all is a 15 year loan. For more information on how to save thousands when you build your own home, download our free 98 page book and read our many articles on this site.