Budgeting for a custom home can feel overwhelming, especially when you total land, construction, furnishings, etc, but it doesn’t have to be! We’ve put together a list of simple tips and strategies so your custom home budget will feel manageable, paving the way for a magical custom home building.
Building a budget
Step one is understanding what you want from your custom built home.
Are you looking for a specific number of bedrooms or bathrooms? Do you want backyard space, an office, or a large driveway?
The answers to these questions help direct expectations and designs for your home.
While budgeting for a custom home, there are three primary categories to consider:
- Design and construction
Your land budget should not exceed 25% of your total budget. You should also set aside 5-10% of your land and construction budget for decorative pieces, including furniture and landscaping. These general targets can be used to build the original budget estimate based on available down payment and loan options.
Staying on budget
While building a custom home on your lot has many variable factors, there are some strategies you can use to navigate the building process and ensure your budget is appropriate for the size and style of home you desire.
- Connect with a builder that is going to maximize your budget.
Collaborating with a builder who can help you make the most of your budget and cut costs can increase the likelihood of staying true to your initial plan and budget.
- Save on projects you could complete later.
While it would be great to build the perfect home in one go to stay on budget, projects like landscaping or fencing can be done at a later date. Prioritize the items that mean the most to you and consider waiting on those that do not.
- Wait to update nonessential furniture, appliances, and materials.
If the budget is tight, consider downgrading to something similar that meets your needs without the fancy finish. Instead of a jetted tub, try a soaking tub, or instead of a smart fridge, try the model below it.
- Avoid change orders and maintain open lines of communication.
Change orders are inevitable during the building process–sometimes, we want to upgrade a countertop, flooring, or frame, but the key is maintaining open communication.
Where to start
Connect with a builder you trust so they can understand the financial aspects of custom home building and how to plan your budget effectively.