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Is it cheaper to build your own home?

At first glance, the answer to this question is a resounding yes! Take a look at the average cost of land near you and estimate your building costs and you’ll probably be looking at a figure around the $200,000 mark.

Of course, the actual price could be vastly different to this, it’s essential to look at all the factors before you decide if building your own home is actually cheaper than purchasing a ready-made one.

Is it cheaper to build your own home

Location

The first thing to consider is where you would like to build. There is a big difference between purchasing land in the center of Sydney and the middle of the outback. In fact, just buying the land in some of these locations can be more expensive than the entire build in another location!

Planning

Don’t forget that you need to employ the services of an architect and submit planning applications, these can be time-consuming and surprisingly costly, especially if they need to be re-submitted.

Size

The size of your intended build will affect the cost, smaller is generally cheaper unless you have very particular designs in mind.

Don’t forget it’s not just more material for the house construction, there will be a greater cost to run a larger house.

Materials

If you’re intending to use standard building materials it is relatively easy to assess the likely cost. However, if you want to use something more environmentally friendly or another alternative, then you need to consider the extra cost involved.

The type and availability of materials can make a big difference to your budget.

Loan Fees

While it would be nice to build a home with your own funds, most people do not have this luxury. Instead, you’ll need to borrow funds at some point. There will be an interest charge for this and possibly other charges; these have to be taken into consideration.

Building Help

You may intend to do all the work yourself, this is certainly one way of helping to keep the cost down and ensuring it’s cheaper to self-build than to buy a ready-made home.

But, there are some jobs that need professional help. You’ll need to contact a specialized skilled labor hire firm and check out the costs; you’re certain to need their assistance!

Unexpected Extras

Alongside all these obvious factors there will be unexpected costs, such as extra materials to deal with an unforeseen issue on the site, or changing the planned kitchen to a different one.

There are always unforeseen extras which are why experts recommend you allocate 25% of your original budget to cover these.

The short answer is yes, it’s cheaper to build your own home.  But, the long answer is it can be. You’ll need to do a thorough estimation of all the costs involved and allow for extras. Only then will you be able to decide what your house build is really going to cost and whether it’s cheaper than a similar size and style home in the same area.

Of course, you also need to factor in the personal factor that a self-built home has, there’s no price for this.

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