The real estate market exploded during the COVID-19 pandemic, creating stiff competition for buyers.
Now, the lack of inventory is spurring a new trend–a building boom.
Building custom is an excellent route for prospective homeowners looking to design their dream house.
However, building from scratch can be pricey, as you’ll need to pay for a plot of land, building materials, labor, and more.
If you’re still looking to build your Barbie dream home, there are a few ways you can break ground without breaking the bank.
Here are eight budget-friendly ways to create a custom home.
Opt for a Small Home
A small house will require less building materials and labor, cutting costs significantly. You can also build on a smaller footprint, saving you on your lot costs or leaving room for a yard.
Your carbon footprint will also see a significant reduction, as smaller homes take less energy to heat and cool.
If you’re ready to opt for savings over square footage, retailers like Monster House Plans can help you find the best small house plans for your build.
Tiny homes boast manageable price tags, lower mortgage payments, and optimal energy efficiency.
Additionally, small house plans encourage homeowners to get creative with space-savings and space maximization projects.
Remember, there’s no ceiling to the benefits of small house plans.
Compare Construction and Building Loans
Do your research regarding the types of loans you’ll need and compare different lender contracts before signing on the dotted line.
If you need a lot or land loan, note that the terms will be shorter and incur higher interest rates than a traditional mortgage.
Construction loans are likewise unique. You’ll need to come prepared with a builder and designer before you can take out a construction loan.
You’ll also need to describe your building plans and estimated costs, for which you can enlist your contractor’s help.
Negotiate Builder Contracts
Don’t settle on the first contractor or builder you find. Shop around and ask for estimates from multiple professionals.
You can also negotiate prices—for example, you might ask for a firm-fixed-price (FFP) or pay after services are rendered.
Of course, price isn’t the only consideration when selecting a contractor. Make sure anyone you hire is licensed and insured, ask to view a portfolio.
And request feedback from former clients. Don’t simply go for the cheapest option. If they do shoddy work, you’ll pay twice as much in heartache and repairs.
Choose a Simple Design
In addition to keeping your home design small, you should also keep things sweet and simple.
A basic square or rectangular floor plan is easier and cheaper to implement than a complex floor plan.
It’s also generally more affordable to build up instead of out, as vertical growth minimizes the foundation size and lot costs.
Design According to Your Priorities
When you’re building a small and simple house, every square foot counts.
Consider what rooms you use regularly, how much storage space you need, and your family’s lifestyle.
For example, if you consistently eat in the kitchen, do you need a dining room?
These considerations will help ensure that your build fits you and not the other way around.
Building an energy-efficiency home can save you money in the long term by cutting heating and cooling costs.
Opt for high-energy-efficiency windows, add sufficient insulation, and consider eco-friendly upgrades like solar panels.
Remember that you may be able to secure extra funding when building an eco-friendly home.
Contact your state energy office to ask about energy-efficient financing.
You may also be able to take advantage of tax credits and rebates, making your home green in more ways than one.
Cluster Water Usage Areas
You can further help save money when building your home by clustering water usage areas.
Plan your design so that the bathrooms, kitchen, and laundry room are as close together as possible.
This measure will help cut plumbing materials costs as you can house your pipes in one “wet wall” rather than the entire house.
Skip the Pricey Finishing Touches
When you’re constructing your dream home, it can be tempting to spring for pricey extras like marble countertops or top-end kitchen appliances.
If you’re on a tight budget, invest in the basics for now and save the splurges for later.
Design trends are constantly changing. For example, current kitchen design trends are likely to evolve.
It may be best to wait and see what direction the market goes before investing in pricey fixtures.
The lack of available inventory on the real estate market is spurring a flurry of building activity across the U.S.
Take advantage of this trend to create your custom home without breaking the bank.