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For many people, building their own home is a dream project and lifetime ambition.

But first you must ask yourself, “How much does it cost to build a house?” Building your own home comes with a substantial investment in time and money. The first step is to determine your budget. Without a firm grip on the figures, it’s possible that your project’s costs will spiral out of control, leaving you in a difficult financial position. But with careful planning, you can build a home you are proud of, while still keeping to a budget.

Construction costs

The cost to build your own home varies considerably based on factors such as the size and design of the building and your geographical location. For example, a small, two-bedroom house in a rural location costs significantly less to build than a large house in a bustling metropolis. However, the costs to build a house usually range from $178,010 to $466,493, an average of $305,372. Elaborate projects could cost $826,000 or more.

You may be able to cut costs by doing some of the work yourself, such as painting, but in many cases you have no option but to bring in professionals with the necessary training to ensure your home is safe and meets all applicable codes for your state.

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Costs to consider

Building a home is a complex process, involving stages of planning, development, preparation and construction. Every decision you make in the planning stages has a considerable impact on your overall costs, and it’s worth talking to a general contractor or using an online price calculator to step through the various decisions and get a rough estimate of the costs involved.

Major factors to consider include:

  • Land: You may purchase a property and then build or extend on the existing foundations. This reduces groundwork expenses, as you don’t need to bring in a digger or pay for deliveries of ready-mix concrete to pour the foundations. But, you may incur demolition costs to remove existing structures.

    Conversely, you may buy an empty plot, in which case there is a lot of work before you can even start to build.

  • Location: Prime locations in popular areas come at a premium. The proximity of schools, shops and essential services play an important role in determining the price of the land.
  • Plans

    : Your architect determines the scope of the project and creates designs and detailed floor plans to your specifications.

Architects usually obtain the permits to ensure your build is legal and may also work as project managers. Expect the architect’s fee to account for 10 percent to 17 percent of your budget, with additional costs to purchase the necessary permits. Those include:

  • Construction insurance: Insurance protects your investment and covers you in the event of unexpected problems.
  • Building type: Simple, small homes are less expensive than buildings with large square footage and multiple stories. The shape also plays a part as the more corners a house has, the more it costs to build.
  • Fixtures: Compromising on the fixtures and finishes in your home is a good way to reduce the overall cost. You may dream of marble countertops and the finest chrome faucets, but by choosing more cost-effective options, it’s possible to minimize expenditure while still finishing the property to a high standard.
  • Wages

    : Up to half of your budget goes toward labor. Your contractor earns an average of $15 per square foot. Carpenters and stonemasons earn approximately $70 per hour, electricians earn up to $85 per hour, plumbers earn up to $65 per hour and painters earn up to $35 per hour.

Conclusion

Building your own home can be costly, so the first thing to do is answer the question: How much does it cost to build a house? To get started, determine your requirements and set a budget. If you don’t keep on top of your finances, you could end up in a housing nightmare.

Prepare to compromise on some aspects of the design, such as choosing less expensive roofing tiles or bricks. However, always aim to employ skilled professionals and buy the best quality products that are within the scope of your budget to ensure the home you build is safe. If you plan well, the end result is a wonderful home and the sense of achievement that comes from fulfilling your vision.

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