Building your own home sounds awesome and also overwhelming. Most people do not know where to start and so they never pursue the option of building instead of buying an existing home. Like anything else, building becomes more manageable when you understand the fundamental pieces and how they fit together. These are the main 4.
Land is the first piece to the puzzle of building. In Northern Colorado, particularly the nearer you get to Boulder, vacant land suitable for building becomes increasingly a challenge to find. As there is no new raw land being made, you have to find what has not already been built upon. “Scraping and building” is usually not economically feasible. So if you want to build from scratch you have to find a lot. There are a few tips to keep in mind. First, in Colorado (except in the mountains) you must obtain a water tap for municipal water connection, even in the country. Unless you have something like 40 acres, the state of Colorado will not permit you to dig a well. You should keep in mind the cost of water taps as you search for lots. Right now it seems in rural areas between Boulder and Fort Collins, that most water taps are costing around $50,000. But on occasion you can purchase property with that included. The cost of water taps in city limits also tend to be less.
The other tip regarding land is that the lot plus water should comprise no more than 1/3 of your total budget. So for instance, on a $150k piece of land with a $50k tap, you should not expect to build anything less than a $400,000 home, making a total project budget of $600,000. There are a number of reasons this is our general rule of thumb in Northern Colorado from typical HOA requirements to the cost of utility & driveway improvements. Just like nobody wants to be “house poor”, don’t let yourself slide into the thinking that “land poor” is a good idea either.
The best way to find suitable land for building is to search your favorite multiple listing sites–for instance Zillow or Redfin. Or, speak with an agent with some experience in building. We are also happy to help you find land. But above all else carefully research a piece of ground for elements that may make building either impossible or overly expensive–things like county restrictions, water tap fees, soil conditions, etc.
Plans is a piece of the puzzle people tend to get overwhelmed with. Our biggest tip–do not go out and hire an architect to design your dream house from scratch. If you do, you will pay a lot of money and in the end most architect’s have no clue what it costs to build. So you are then likely to find your dream home designed by the architect is way over your budget to build. This is the most popular way of ending your dreams of building before you have even moved a shovel of dirt.
Instead, go online. There are dozens of house plan websites with thousands of plans available. Find some starting plan that you like, that you can then modify to the dream home you want. This will give you the chance to price out the starting home to be sure it is in your budget AND you the cost to modify a plan is much less than having one drawn up from scratch. Or, almost every builder has a stable of plans that are time tested and efficient.
Find starting plans somehow and then you can modify to your liking without blowing up your budget. Also, be cautious, when you design your home a bunch of little things are going to add up to big numbers. You might think that adding a half dozen little changes will not drastically change the cost to build, but it can. Often house plans are designed a certain way with efficiency in mind, with things you may not normally consider.
No matter how much you love something, you still will not buy it or build it if it costs too much. Budget reigns supreme. It is too easy to dream too big upfront only to find that later on you have priced yourself out of building. It is much much harder to bring costs down than it is to send them rocketing to begin with. The biggest tip here is to start small in your footprint. The biggest driver of cost is footprint–what is built over a foundation and under a roof. It is better to have the minimal amount of space that you need and spend more money in nice finishes than to have a lot of unused space with plain finishes.
Always, always, always keep a tight grasp on your budget. Get a builder to give you a cost to build a plan you like before you even purchase the plan. Then have it priced out again before you have it modified. Then price it out again after modification before you talk about upgrading finishes. Always keep an updated budget within arms reach. It is very easy to get a good number once and then go off and make a bunch of changes, decide on a bunch of finishes, and to come back and realize you have overstretched yourself.
If you do it right, a budget is not a dream buster, but a dream builder. Meaning, a budget makes you focus on the elements you really want. It makes you focus on things that truly matter and it helps you eliminate things you do not really need or care about. If you do budgeting right, then it will make your plans and experience and end result better. You cannot enjoy a house afterward that you cannot afford.
Surprising to some people, the build part is perhaps the last of all these pieces. That isn’t to say its not important. But if you have done the first three parts right, then the build process will be much smoother and the end result much better. The tips for building is to find quality first and then consider cost. If you are building yourself, keep in mind, the cheapest subcontractor may be a flake and walk off in the middle of the job and leave you in a bind. Or they may not show up on time, add unnecessary delays, cause damage to other parts of the house, etc. Some of these issues are unavoidable at times. But keep the possibility of those problems in your mind up front. A busy subcontractor is going to prioritize bigger jobs from continuing sources of business over a one-off project. Be sure you pay only for the amount of work that has been done. Never pay the entire cost upfront.
If you decide to have a builder manage your build for you, check references. Look at other pieces of work. Get a good contract. Read things like soils reports and engineering documents yourself. Be involved. Ask for continuous communication. And look for a 10 year structural warranty from a builder. This protects you if the builder is out of business and your foundation cracks or your home experiences structural issues later on.
Be sure you have clearly laid out what is the builders responsibility and who is liable under certain conditions. Prepare for the worst while hoping for the best.
Overall constructing a home is a major investment. The process can seem daunting and the risks enormous. But the rewards are also unmatched when compared with alternatives. There is nothing like engaging your creative processes to make a new home for yourself. Its the old adage that you tend to get out of things that amount that you put into them. And sometimes time and effort count for more than just taking out a mortgage.
We are happy to help answer any questions or give tips and suggestions over the phone or email. We are huge fans of building. We understand that we cannot build for everyone, so we also take pride in helping other people learn the ropes so that they can have a good experience if they’re doing it themselves or using another builder.