Many people have a dream of eventually building their own custom home. Financially and organizationally speaking, this is a huge undertaking, and requires a lot of thought to make things go according to plan. And one of the first big questions you have to consider is – do I have the budget to make this happen?
To help you answer that question, think about the following five tips, including contacting a custom home building company, researching taxes in your proposed location, remembering the 3 by 3 rule, making sure that your overall budget is already in place, and talking to people who’ve been through the process before.
Consider Contacting a Custom Home Builder
Probably your best first decision if you want to find out how to budget for new home construction is to contact a custom home building and ask them about their process. What steps go into making the home, and how much do each of those steps require when it comes to financing? Home-building companies will have a ton of information for you to look over with regard to this, so take that step very seriously.
Research Taxes In the New Location
And it’s one thing to have the money to build a home, and another thing to be able to keep paying taxes for the property once it’s built. To that end, brush up on property tax laws in the location you plan on building the house, because the last thing you want to find out after your dream house exists, is that you can’t afford to live there!
Remember the 3 By 3 Rule
There is a smart rule to operate by when it comes to major projects like building a home. If you come up with a reasonable number in terms of budget and time, multiply both of those numbers by three, and make sure you can still afford it. If you think it’s going to cost $100,000 and take 3 months to make the project work, have it in your mind that it’s entirely possible it may cost $300,000 and take almost a full year. Give yourself that buffer.
Make Sure It Fits Your Overall Budget
And before you look at a house budget, what’s your overall normal budget look like? If you don’t have all of those numbers set in concrete, there’s no way you’re going to be able to tell if you can afford to build a house outside of those finances.
Talk To People Who’ve Been Through the Process Before
And finally, talk to people who’ve built their own homes before. They can give you some pointers about what worked and what didn’t, about how organization helps, and how much the project cost vs. how much they thought it would.