How Much Should I Spend on a New House?

how to estimate home building costs The Right amount of money

What ever amount of money you have to spend on your house is just the right amount. You will run out of it before the house is finished, but that would happen anyway—no matter how much money you have. There are all kinds of houses that can be built and there are all kinds of prices they will be built for. Each one will be the right price for that house. Don't let a lack of money keep you from moving out to your property and building a house.

To show you how this is true, let's take an example of something we've all purchased—a radio. What do you buy a radio for? Well, to listen to music and programs off the air and perhaps play CD's or tapes. Already we have rising expectations—we want a radio/tape/CD combination. How much will it cost to satisfy our need to listen to radio? The choices are wider than you might think.

At the low end we could go to garage sales and thrift stores and probably pick up a used inexpensive portable unit for $5 to $10. Moving up the ladder, we could go into an electronics store and buy a new unit for anywhere from $20 for a basic portable unit to well over several thousand dollars for a high powered unit.

So, there is at least a 100 to 1 and sometimes a 1000 to 1 ratio in what people will spend to listen to music and voice recordings. What do they really get that is different?

Look, if George Washington were to come in to your house today and sit down to listen to a recording, would it make much difference which one it was played on? Either one would blow his mind and seem an amazing invention. The differences in quality would be secondary.

The actual experience of the music or recording, the impression it makes on our life, takes place in our heads and hearts and is not dependent on the type or cost of equipment.

If you consider your audiophile tastes to be highly refined and have trained yourself to listen to subtle differences in the sound produced by high end equipment, then you will not be able to hear and enjoy the music until and unless the equipment and listening environment are top of the line.  Your expectation determines the entry fee you must pay for the experience to be satisfying.

It is the same with your house.

There are all kinds of different houses you might live in from rustic and funky to elegant, dramatic and refined. Each of those houses will be exactly the right environment for someone and each of us must find the type of house we are most comfortable with. This is why some people will spend $750,000 to build a country cottage, and others will build one for $12,000. Each can be equally soulful, satisfying and renewing to a specific owner. Switch residences between the two owners and neither one will feel comfortable. Yet both houses probably satisfy the same basic functions.

It is our expectations, our requirements of the physical environment, that determine how we build and what it will cost. What we build and what it cost is not determined by our true needs, which are often simple and much more equal than costs would suggest.

One of the nice things about moving to a more rural environment is that we usually don't have as many expectations to live up to—those of others or the ones we have of ourselves. We can relax a bit and choose a simpler lifestyle if we wish. If you are planning to move out of the city, you probably don't want to make a copy of your current urban or suburban life and transport it into the country anyway.

A fresh move, a new beginning, is a good time to reevaluate and set a new course. 

Additional links:
  What it Costs to Build

Get Involved with Building your own Shelter.

There is much to learn about the design and building of a house (see our Best Books list). Also, see our article on 5 Ways to Build a House. You can be an involved owner-builder and still get help from others! Don't do what doesn't feel right or isn't fun. Houses are much happier places to live in if the people building it had FUN (and were therefore more flexible, and inventive).

Getting a simple to build stock plan that comes close to meeting your needs and then modifying and building that plan with local help is a reasonably inexpensive alternative to spending 10% of your total budget on an architect and 20% of the construction budget on contractor overhead and profit. Working up an exciting design that meets your space and budget needs is one of the first and most important owner-builder projects you will do. It becomes the foundation of everything that follows. But don't get too tight about planning every detail. Opportunities will show up that were not put down on paper and could not have been anticipated. You need to jump on these and let the house evolve its own character and direction. Many of these unanticipated changes will be things people will love about this house long after you are gone. 

We make our small home plans easy to customize because we think you will build a better house by staying awake to opportunities and getting involved. Here's to FUN and SUCCESS on your project! And don't forget the Forum. We are here to help and we love to hear about your project. Check out the Gallery where owners show off their projects, if you haven't already.

how to estimate home building costs

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