Building a new house can be very exciting. When you are in charge of creating your own place to live (or to sell for somebody else to live in), you’ll be able to control many of the most important details, including the aesthetics, the architecture, its key features, and—at least in some situations—its location.
However, one of the reasons many people choose to live in a pre-built home rather than build one of their own is that, generally, building a home from scratch can be very expensive. According to recent estimates, the average cost of building a new home is $284,262, which is just a little bit higher than the average cost of a new mortgage. However, there are still plenty of situations in which building a home from scratch might end up being the cheapest option you have available.
About half of all people building a home from scratch will spend between $119,000 and $449,000, not including the cost of land. Of course, if you are looking for a home with a ton of crazy features, the costs can be considerably higher.
But what if you are looking to build a home for as little money as possible? Suppose you are looking to build a home for less than $100,000—is that even possible?
The short answer is yes. But, as you’d probably imagine, if you are hoping to build a new for as cheap as you possibly can, you are going to need to be willing to make a few sacrifices. In this guide, we’ll discuss the most important things you need to know about building your new home for as little money as possible.
Land, Land, Land
In many cases, the most valuable component of a home will not be the physical structure itself but instead will be the land that it sits on. If you are hoping to build your home in the middle of Manhattan, then you should expect to pay about $5 million per acre—so even if you are planning on building a shoebox that sits on just one-fiftieth of an acre, you’ll already be over budget. On the other hand, there are plenty of places across the United States (and elsewhere around the world) where land is incredibly cheap. For example, in Gerlach, Nevada, the average cost of an acre will cost about $157, giving you plenty of more room to work with.
In addition to the general location of the property, there are other factors that could affect its value as well. Land with access to resources will cost more than a piece of barren land, even if the location is still very remote. And of course, you’ll also need to consider the other drivers of land value, including job opportunities, school systems, access to major roads and highways and other types of transportation, neighborhood quality of life, and more.
The more you are willing to give up when selecting a plot of land, the easier it will be to stay within your $100,000 budget. But, as we will explain below, choosing a place to live that is completely off the grid might create some additional consequences.
Getting on the Grid
You might think that building a home that’s entirely off the grid—perhaps an hour or two from the city you currently live in—would be extremely affordable, but “the grid” does indeed have its share of benefits.
Hey, who hasn’t fantasized about simply escaping and just living in the woods? However, two of the greatest benefits of living on the grid are easy access to water and electricity.
Assuming you want access to these resources, you’ll need to either choose a plot of land where these resources either already exist or can be easily accessed (such as an urban or suburban environment) or invest in creating them yourself.
It’s possible to build a home where you have your own plumbing (which will usually require you to construct a septic system—that’ll be about $7,000). It’s also possible to build a home with its own energy supply (usually, a solar system, which will be a few thousand dollars more). There are, in fact, lots of homes in America where these systems were installed from scratch. However, these are costs that you’ll need to be willing to accept, which might cancel out the savings you gained from choosing a remote piece of land in the first place.
Creating an Affordable Blueprint
The specific blueprint you use when building your home will also affect the total cost of building. As you would probably expect, the bigger you want your home to be, the more you will need to be willing to pay. On average, building a home from scratch will cost between $100 and $500 per square foot, and that’s just the materials. But, of course, there are still plenty of ways to potentially cut down these costs.
If you are looking for the most affordable blueprint possible, an A-frame house is probably your best bet. An A-frame home offers the unique benefit of essentially combining the roof with the walls, meaning you will minimize the actual amount of surface area that is on the outside of your home. However, these homes tend to feel a bit cramped on the inside and might not be the most efficient use of space.
Another recently popular trend has been tiny homes. These homes typically have very little square footage, often just a few hundred feet, as their name implies. You may be able to build a tiny home for just a few thousand dollars, but, again, this will require a willingness to make sacrifices.
Selecting Materials
The materials you choose to build your home with will also directly impact the cost. If you decide to build with more expensive materials, such as steel, glass, and artisan brick, then staying within your limited $100,000 budget is going to be much more difficult. But there are many very affordable building materials available as well.
Generally speaking, prefabricated paneling, concrete sheets, and timber are among the most affordable homebuilding materials on the market. There are also a lot of newer, “alternative” materials that can be acquired for fairly little money, including reclaimed wood, bamboo, recycled bottles, and even shipping containers. Cheaper materials will not always last as long—and may present other problems, like leaks during rainstorms—but they will undoubtedly make it easier to work around a tight budget.
Another affordable option is a prefab home. These homes are made in factories and shipped to a specific location. In general, the materials used to make these homes are among the cheapest, making these homes a great way to stay under budget.
Limiting Special Features
Once you have gotten the basic bones of your home in place, you are going to want to decide which “special features” you want to have and, more importantly, which special features you’ll be willing to part with. There are a lot of seemingly minor features of a home that can quickly cause costs to rise, so be sure that any feature you incorporate is actually worth it.
Some of the most common optional features might include a garage, a bathtub, extensive countertops, cabinets, built-in appliances, smart home technology, and more. In most cases, you can probably incorporate a few of these features into a $100,000 home but expect to pay a few thousand dollars for each of them.
Doing the Work Yourself
Labor is one of the most overlooked—and often most expensive—components of building a new from scratch. If you need to hire someone to help with the building process, you will have to pay them, often between $50 and $100 per hour. By choosing to do any of the work yourself, you can drastically reduce the total amount you end up spending. However, be warned—this sort of labor usually goes for a premium because it’s something that most ordinary people can’t do on their own. If you don’t really know what you’re doing, you may run into future issues that could potentially end up costing thousands down the road.
Financing a New Home
Financing is yet another component that is easy to overlook. Are you borrowing money to build this home? If so, as any financial advisor would tell, that is something you should account for when calculating total costs. Other financing components, including closing costs, interest payments, building permits, insurance, and more, should also be considered a part of the total cost of homebuilding.
Conclusion
As you can see, there are plenty of ways you can build your own home for cheap. If you are willing to live in a small, self-contained home off the grid—and remove all luxuries—you could potentially spend just a few thousand dollars. But if you want to be more realistic or “normal” (overrated), you will have to carefully choose which components of the building process you want to splurge on and which ones you can do without.
