One of the most frequently asked questions from our customers is “How they can save money building their new home?”
Considering how fragile the economy is right now and how timid banks are to loan money for new home construction, it is no wonder that our customers want to know these tips!
It wasn’t that long ago when banks were basically “giving” out loans to almost anyone. Loans got larger, and builders built bigger, more extravagant and more expensive homes. Well, we know how that story ended! Today banks are less likely to fund new home construction because of the high costs associated with building a new home.
The good news, however, is that our customers are now smarter, savvier, and more apt to build smaller, greener and more affordable homes.
If you’re set on building a new home, there are many ways you can keep your cost down. That will make the banks more likely to fund your new home building project. Luckily for consumers, the prices of home building products ranging from flooring to shingles to drywall are highly reduced as manufacturers all compete for consumers. Check out our extensive range of home designs at Hitch Constructions.
Set a realistic budget
It’s easy to get distracted in the excitement of building a new home. In all likelihood, you’ve worked hard to save the deposit and organise your finance – which is fantastic! However, be mindful of the additional costs involved in building a new home, such as stamp duty, conveyancing, council/utility rates and mortgage insurance (if necessary). Make sure to factor in all these costs at the start to avoid surprises later on.
Potentially the biggest cost saving you can make when building a home is the build itself.
In comparison to simply choosing different materials, the speed of the build can deliver huge savings, if you do your maths.
A faster build will usually cost more that needs to be weighed against the holding costs for the property if you opt for a more extended build.
That means calculating the interest payments on the block of land, the longer period without a rental income if you’re planning on renting out the house once it’s finished, or your rental payments on the house you’re staying in a while your new home is built.
If you were to save ten days with a faster build and it cost $5000 more, if your overheads were going to be $1000 a day (for the slower build), that means it would have cost you $5000 just to hold the property for that extra time, so it’s a no brainer, you go with the faster option.
Keep the design simple
Choosing a simple design over a complex one saves time and money. A simple design is usually one that is rectangular or square in shape, and which embraces some form of open-plan living (fewer internal walls are required). Many builders offer a range of simple off-the-plan designs to save on architectural fees.
Render the exterior
More and more houses feature rendered exterior walls these days, and with good reason: it’s one of the cheapest ways to dress up the outside of a home.
Renders and lightweight foams are light and go up quickly, meaning labour costs are kept down, while the materials themselves are also very cost-effective.
The downside is that so many properties are now being rendered that they are no longer unique, so while the render will almost certainly save you money, it won’t necessarily add value.
Don’t skimp on kitchens and bathrooms
While it’s easy to find ultra-cheap options when selecting fixtures, fittings and materials for your kitchens and bathrooms.
Unless you plan to remain in the house forever, you should consider what your future buyers might want, as not every potential buyer will be prepared to renovate after purchasing.
In terms of the cost to renovate, kitchens and bathrooms are the most expensive in the house, so you’re better off to spend a little bit more and display a product that people will love, rather than display a product that people will look at and think, ‘I can’t wait to rip that out.
Choose a Forgiving Aesthetic
Deciding to go with any “industrial” or “rustic” aesthetic can be incredibly forgiving when it comes to finishing your home – specifically, you can leave some projects unfinished, and the end result still looks purposeful.
For example, we opted for concrete flooring, which looks fabulous with our low-key, “industrial” vibe. In fact, only one-third of our concrete flooring has been dyed, and we may opt to finish the remaining floors, without adding a coloured dye.
We also built a loft area with stairs so we could sleep on the second level, but we opted not to have the underside of the loft drywalled. We kept the stairs as they were built – with basic wood and plywood, rather than having them finished. Aside from a little paint, they’re exactly as they were originally put together. The unfinished wood looks “rustic,” and when combined with the other features of our home, the total aesthetic comes together as “rustic industrial.”
Finally, because the aesthetic we were going for was so basic, it gave us the flexibility to build our kitchen out of cinder block and butcher block, then add inexpensive open shelving to the walls. Cinder block isn’t exactly standard kitchen-construction fare, but the materials were cheap, and the end result was exactly what we were going for.
Buy a block that’s ready to build on
Site preparation is an area that’s often overlooked by first-time home builders. Make sure you choose a block of land that’s flat, easy to access, free of trees and connected to utilities at the street level. Also, avoid sloping blocks and soil that’s rocky or highly-reactive. Given the complexities involved in site preparation, it’s important to seek professional advice prior to buying a block. Looking for the best home constructions? Look no further! Hitch Property Constructions has the ultimate list of home designs for you to choose from.
Do the Work Yourself
Your willingness to take on certain tasks saved us money. For instance, we installed our sinks and our toilet, put together our own kitchen, and dyed a third of our concrete flooring. We plan to install more lighting in areas where the contractors ran wire but didn’t add fixtures, and eventually, we plan to finish our shower – it works, and it’s waterproof, but it’s not a “finished” product.
Paying contractors to put together our kitchen and install our fixtures would have added thousands of dollars to our budget. While it’s occasionally been a frustrating and time-consuming process learning how to take on some of these tasks, it’s also been rewarding, and it’s brought us closer to our home. If our sink or dishwasher ever springs a leak, I now know how to fix them.
That said, I wouldn’t suggest you take on every project yourself. Unless you have extensive experience with electricity or plumbing, I would leave the running wire and laying pipe to the professionals. The last thing you want is to burn down your house or cause a flood because you didn’t set up your utilities correctly.
Compromise a little on fittings and materials
If you’re on a fixed budget, you don’t have to buy the very best fittings and materials straight away. Starting with quality mid-range floor coverings and kitchen appliances is sometimes a smart idea – particularly if it saves you from having to borrow more money. Talk to your builder before sign-off to ascertain where sensible savings can be made concerning fittings and materials.
Source Materials When Possible
Talk to your contractor about sourcing your own materials. In some cases, the contractor and subcontractors can get better prices on bulk items, such as lumber and paint. However, in other cases, it makes sense to do your own digging and buy less expensive – but still high-quality – items on your own. For instance, our contractor was going to buy a water heater for $850, but we were able to find a comparable model for just $350. We bought it separately and had our contractor install it.
Generally speaking, I’d suggest you source new materials rather than pre-owned, but that depends on what you’re looking at. For instance, go ahead and buy a new water heater or air conditioner from a retailer such as Amazon or Home Depot, but consider shopping on Craigslist (or even eBay) for second-hand flooring, cabinetry, or light fixtures.
If you have a Habitat for Humanity ReStore in your area, call and ask when it receives its donations. These stores often stock new, high-quality items such as light fixtures, toilets, windows, and doors. Furthermore, they also receive donations of second-hand items. It’s a little hit-or-miss (much like a Goodwill), but you may be able to snag truly great pieces, such as stainless steel appliances or granite countertops, at a major discount.
Quality of materials
For most building materials, you really do get what you pay for.
You can save money on building costs by selecting cheaper materials that will perform the same job as their more expensive counterparts. Still, in many cases, the difference in quality will be evident.
Polishing a concrete floor can be a very cheap option but may not suit the style of every home. Carpet and timber flooring have options at many price points, depending on what you’re prepared to compromise on.
The more money you spend on the carpets, generally the higher quality it’ll be and the nicer it’ll look, and the same with timber flooring as well.
Salvage Materials for Reuse
Use whatever you can, however, you can. We salvaged a whole barn and worked our layout around its tack room so we could use the studs that had already been built. We kept the sliding barn doors so we could sell them or use them in another capacity, and we used leftover lumber as wooden slats for shelving in our cinder block kitchen.
Construction projects often create material waste that can be reused in other ways and other areas. Think creatively, and don’t let your contractor simply throw scraps away until you’ve had the chance to go through them. You shouldn’t turn into a hoarder and keep everything, but you also shouldn’t simply discard good materials.
Consider a house and land package
A turnkey house and land package is usually a cost-effective and hassle-free way to build a new home. Key benefits include affordability, lower stamp duty (provided the house hasn’t been built yet) and certainty around site preparation costs. A quality house and land package will typically feature a large number of inclusions, which are potential money savers.
Check your eligibility for stamp duty concessions and grants
Stamp duty concessions are available to eligible first home buyers in several states and territories – namely New South Wales, Victoria, Queensland, Western Australia and the Australian Capital Territory. The First Home Owner Grant (FHOG) – a Federal government initiative – is also available to eligible first home buyers throughout Australia. At HP Constructions, we have the best home constructions selection to make your house a dream come true.
Get Several Bids and Select a Contractor Wisely
Unfortunately, it took us about 18 months to finally get our home build started. Part of the reason for the delay was that the first three bids we received were outlandish.
The first contractor wouldn’t even listen to what we wanted and kept challenging our budget. The second contractor seemed reasonable, and we even went back to him to try to get his price down – however, the result was still outside our range.
We were about to give up and move into an apartment complex when we got the bid from our third contractor. It was exactly what we wanted at a price we could afford. Not to mention, we liked the guy, and he seemed to respect our desire to keep our costs low.
Don’t just go with the first person you talk to. Even if you love a particular contractor, even if you hit it off and seem to understand one another, and even if you’re friends with the person – especially if you’re friends with the person, in fact – always seek out multiple bids to ensure you’re getting the best possible deal.
Once you’ve gotten a few bids you’re happy with, seek out references. Ask the contractor to give you the names of former customers, then sleuth a few more names on your own by asking those customers if they have any. Contractors are going to give you their best possible references, so it’s a good idea to seek out more folks in order to get a well-rounded picture of the person you’re going to work with.
It’s not just the price of the home that costs you money. Suppose contractors drag their feet or fail to manage subcontractors effectively. In that case, you may end up paying additional money to correct mistakes or to live in your current home longer while construction drags on. The goal is to find a respected and affordable contractor whose work can be trusted and who sticks to the promised timeline.
Seek transparency in your builder
Prior to construction, you’ll be required to sign a legally-binding contract, which sets out the rights and responsibilities of the consumer (you) and the builder. A quality builder will always be upfront with the overall cost of building a new home. We provide customers with a transparent fixed-priced contract and encourage open communication from the onset.
Other Ways to Save Money When Building Your Dream House
There are still a number of simple ways you can save thousands throughout the process. Who knows – you may even save enough for that spa bath!
- Most importantly, avoid two mortgages and make sure your old house has been sold before you begin building. Even if you have to rent a home while you are building, this option will save thousands in the long run.
- Always negotiate the purchase price of your land and offer lower than the asking price. The owner can only say no.
- Make sure that you do a bit of research before choosing a builder, and be sure that they are registered with the proper certification and insurance. Ask for references from the builder, but also ask family or friends and take a look at their social media or business websites. It is also important that you never pay any contractor in full until the contract and job are complete.
- Look online at our massive selection of free home plans and save a fortune on architect fees. Even if you can’t find anything specific that you like, our Internal Design Service (IDS) will allow you to design the home that you want to your exact specifications.
- Leave out extra features that add expense. Multi-level pitched roofs, cathedral ceilings, ornate cornices and fancy windows can add tens of thousands to the total – opt instead for a normal ceiling, energy-saving window frames, plain plasterwork and one level of roofing, and you will be amazed at the price difference. Even if you want to keep some of the fancier features, there are other simple ways to slash the price, but that is an individual’s decision.
- Try to source any fittings that aren’t included in your kit home yourself, remembering to always double-check the suitability beforehand with your builder: you wouldn’t want to order the wrong type of lights for your electrical system.
- Never accept the first quote with anything: plumbing, electrical, painting, carpet laying or whatever service you are after. It is definitely worth shopping around to find the most competitive price to reduce expenditure.
Now, with these tips, let’s build your dream home and save some money while you do it. Above are all the ways you can save money while building your dream home!