10 Cheapest Ways To Build A House On a Budget
Once you’ve decided to buy a home after years of renting, you’ll quickly realize that finding the right home can be a challenge.
Avid house hunters know this well. They love to poke fun at the extensive “must-have” lists often presented in our favorite home television shows. If you’ve undertaken the search for your dream home yourself, you know how challenging it can be to find a house that you love within your budget.
Many potential home buyers face this dilemma. They’re frustrated with the slim pickings of homes on the market or struggle to remain within their price range. If this describes you, then it could be time to literally go to the drawing board and consider building your perfect home from scratch.
How To Build A House On A Budget: 10 Cheapest Ways
1. Build Your Own House With A Contractor
Working with a contractor to construct your dream house could be the perfect solution you’re looking for. Even though working with a contractor costs extra money, having their expertise and certifications on your side could help you avoid mistakes or miscalculations that could cost you more than you planned. Plus, you’ll be surprised what you can accomplish with a blank slate, some expert advice and your one-of-a-kind vision.
Make A Plan
In many aspects of life, preparation is the key to success – and this most certainly applies to building a house. You’ll want to make sure you have a defined budget, the right people and well-thought-out resources to make this process as seamless as possible.
Figure Out Where To Build
With any project you should always make sure you have a strong foundation, especially when building a home. If you plan to use your current lot or look for a new piece of real estate, make sure you understand the costs associated with any necessary excavation or reshaping of your land.
If you’re interested in starting construction elsewhere, investigate the location and that area’s zoning codes. Since zoning policies vary from city to city, do your research beforehand so you know exactly how imaginative you can get with your build. Some areas might not allow pools, garden sheds or other unique features. Other zoning codes have certain rules regarding additions or deck and fence sizing.
Simply understanding the features you’d like to see in your home and ensuring they’re all attainable for your lot is a great first step toward your dream home.
Know Your Numbers
Although you probably have some kind of budget in mind leftover from your house-hunting experiences, construction can come with costs you may not have even considered. To establish a reasonable budget that works for you, let’s first break down some of the costs you could be looking at.
- Land: As we mentioned earlier, foundation is key. Do you know if your lot is construction-ready? Or will you have to hire a landscaper to reshape or level out your lot? Will your yard require any excavation or erosion control? Ask yourself these important questions before possibly obtaining a land loan and moving forward with any plans. Rocket Mortgage® doesn’t offer land loans.
- Architects: Regardless of how specific your vision is, consider hiring an architect. These experienced designers will make drawing up the floor plan that much easier, while also offering advice regarding any unique features you have in mind. Just make sure to properly articulate your vision and find an architect you can coordinate well with in the future.
- Contractors: You don’t want to feel lost when faced with the big decisions surrounding your home build, and a great way to avoid this is by hiring a contractor. Similar to working with an architect, having this professional on your team can provide you with advice and help flesh out the logistics behind your
Many experienced contractors will understand the best and most durable materials to work with. Some may even be able to get you deals on select materials based on their relationships with suppliers. Contractors should be familiar with the safety and legal requirements of construction in your area to ensure an efficient build.
- Permits: Before you begin building your own home, it’s vital that you get approval for all the building permits you’ll need. Building without these permits can be risky – the town you’re in could issue a hefty additional fine or order you to take down the project. Worse, you could be slapped with an expensive lawsuit if an accident occurs at the construction site.
Once you feel that you have a grasp on the costs associated with home building, start putting your budget together. Your budget should realistically reflect the costs of land, labor and materials within your area.
If you’re worrying about these costs stacking up, look into applying for a construction loan. Though these aren’t currently offered by Rocket Mortgage, many kinds of construction loans are available, each suited for different projects, so you shouldn’t be hard-pressed to find one that can meet your needs and get your build moving.
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2. DIY Without A Contractor
For those of you who already have experience with construction projects or have a network of experts among your friends and family, then you’ve probably already considered building your home on your own.
If you truly have the right resources – skilled laborers, reliable and safe-to-operate tools, the right knowledge about your construction ambitions and other basics – then DIYing your build can save you quite a bit of cash in the long run. The more you choose to do yourself, the more money you can save.
However, you may still want to consider recruiting an architect, designer or contractor to avoid making any costly mistakes – especially if this is your first build.
That said, if you’re feeling confident in your skills, the internet should be able to provide you with plenty of resources and tips. Don’t be afraid to download floor plans online for inspiration or hit up Pinterest for some trendy home project ideas.
3. Build A Simple Box
As geometry class taught us, squares are the easiest shape to deal with. So if you don’t mind keeping things simple, constructing a square or rectangular floor plan can save you big bucks.
Rather than constructing an elaborate home, add square footage by building upward, not outward – it’s generally cheaper. Additionally, never underestimate what landscaping, decks, paint jobs and decor can do to spruce up your exterior.
If a simple build meets your needs, seriously consider going with this affordable option and reaping the rewards.
4. Choose A Design With A Simple Roof
This concept of “spending less saves you more” also applies to roofing: simpler designs will cost you much less. Although multilevel roofs may look nice, it’s always cheaper to go with a plain, gently sloping roof.
Not only will it save you money in the short term, but because of their structure, simple roofs are less of a risk for leaks or damage over time. If you’re on a tight budget or simply don’t care much about rooftop aesthetics, then choosing a less elaborate roofing option is a smart way to save some dough.
5. Construct An Energy-Efficient Home
Over time there has been an increasing trend in sustainable living and energy-efficient homes – and for good reason. Not only can upgrading your home to an energy-efficient model save you hundreds in energy bills each month, but you also get to do your part for the environment.
Whether you’re a seasoned expert in sustainability or you’re simply interested in taking small steps toward going green, you can make your home more energy-efficient in plenty of ways – from installing better insulation or high-efficiency windows to using solar panels or wind energy as a resource.
The drawback for many people is the initial cost of these features, which can be rather high. Viewing them as an investment rather than a one-time purchase and keeping in mind how much money these products save over time will make their price tag much less intimidating.
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6. Keep Water Usage Areas Together
Now, this is truly a great way to save money when building your home from the ground up. By clumping your laundry room, bathrooms and kitchens as closely together as possible – either vertically or horizontally – you can eliminate a need for excess plumbing materials and shave off some extra costs. So, when you’re drawing up your floor plan, consider this configuration if you’re looking to save some cash.
7. Skip The Expensive Finishes, For Now
If your budget is running low or unexpected costs come up, don’t panic. Options for interior and exterior designs may seem endless, but you can always install less expensive features upfront such as cheaper flooring like carpet, and upgrade to more luxury features like hardwood when you have more money available. Focus on building a strong foundation with essential amenities – finishing touches can always come at a later date.
8. Build A Tiny House
If you’re open to a more unorthodox way of living, then the tiny home lifestyle could be up your alley. This bite-sized home has skyrocketed in popularity over the past few years thanks to its sustainability and clever use of every square foot. With its viral success, tiny-home owners have grown into a passionate online community sharing abundant information on the lifestyle pros and cons, tiny home floor plans and veteran advice.
Tiny homes aren’t just appealing because they’re trendy. Their biggest draw is that they’re affordable.
Since tiny homes are, well, tiny, they’ll cost you significantly less to build than a conventional house. Tiny homes cost anywhere from just $20,000 – $100,000, depending on how luxurious you want your build to be. They also cost significantly less to maintain than your standard home. You can even opt to build your tiny home on wheels if you’re interested in traveling or plan to move in the future.
However, the tiny home lifestyle isn’t fit for everyone. Perhaps the largest drawback to tiny homes, besides their limited size, is financing them. Tiny homes typically aren’t eligible for loans. If you’re looking for something new and are confident you can pay off your tiny home upfront or are willing to rely on credit cards, it may be an option worth exploring.
9. Use Unconventional Building Materials
Another option for those looking for something new is simply trying to find ways to use unconventional home building materials. With the tiny home movement picking up steam there has been an influx of popularity for shipping container homes – houses built using reclaimed storage containers.
The kind of innovative thinking that saw storage containers as durable, home construction materials is the kind of cost-effective creativity you should try to focus on when building your home. Not only is recycling materials extremely sustainable, but it will also clearly save you money on your build.
Some other common yet less expensive building materials you can use to construct a new home include:
- Reclaimed wood
- Prefabricated Panel
- Precast Concrete
10. Build Off The Grid
In case you haven’t heard, sustainable living has become a huge trend in recent years. This is why off-the-grid housing, or self-sufficient homes, are appealing to more and more people over time.
Off-the-grid homes rely on natural energy resources, like solar or wind-powered generators and composting toilets. Many self-sufficient homeowners also take part in gardening and harvesting homegrown foods.
If you’re passionate about sustainability and want to give this net zero lifestyle a try, then check out off-grid home plans or peruse the expansive online community for more information.
FAQs On How To Build A House Cheaply
Building a new home, especially for the first time, can have you considering multiple paths toward the finished project. We have answers to your frequently asked questions on how to build your own house below.
Is it cheaper to build or buy a house?
Generally, it’s cheaper to buy a prebuilt house with land than to build a new home from scratch. There are some exceptions when it comes to building materials in demand, if a location is more of a seller’s or buyer's market, the conditions of local houses for sale on the market and if labor is in low supply.
As the economy fluctuates, it’s important to determine what you’re prepared for when considering buying vs. building and if you’re willing to wait for more supplies to be available and affordable, or for more houses to appear on the housing market.
Can I get a mortgage to finance my DIY build?
As we mentioned earlier, construction loans are available depending on your type of build. However, with construction loans, the money will go directly to your contractor as the build is completed, rather than you, the homeowner.
For lower-cost builds, like tiny homes or shipping container models, financing gets even trickier. Most homes won’t qualify for any kind of loan unless it has a permanent foundation. Even if your home is on wheels, chances are it may not meet the requirements to qualify for an RV or motorhome loan either. In this case, consider applying for a personal loan.
What are some costly errors to avoid when building a house?
First, be prepared. You should be confident that you have all the proper construction permits you need and that you meet your area’s zoning regulations before construction even begins. Getting caught building without a permit will not only delay your build for extended periods of time, but the legal fees can cost you over double the price of the original permit.
Second, you should also know what you’re doing during your build or hire somebody who does. Plumbing or electrical mishaps will cost you a pretty penny if you make a mistake early on, especially if you don’t catch it right away. Set yourself up for success and subcontract the help of an expert if you’re not totally confident in a certain aspect of your build.
What is the cheapest type of house to build?
The type of home being built will affect overall costs depending on the building materials needed, the scope of the project and the location. With research and finding local help, you can determine what type will fit your budget and needs best. We compiled a list of the least expensive types below if you’re looking to save the most money when building a new home.
- Ranch-style homes
- Colonial homes
- Tiny homes
- Kit homes
- Off-grid homes
- Prefabricated homes
- Shipping container homes
Are there communities of tiny homes?
The tiny home phenomenon has cultivated a rich online community. You can find communities of people who vlog about their lifestyle on YouTube, find influencers on Instagram and read endless Q&As on Reddit. Don’t be afraid to reach out to these like-minded people to learn more about the lifestyle and figure out if it’s truly right for you.
The Bottom Line: Building Your Own House Can Save Big Bucks
Whether you’re looking to build a unique and more unconventional home, are interested in living sustainably or just want to save as much as you can with your home build, there are plenty of options when it comes to building your new home.
Ready to explore your options for financing your dream home build? While Rocket Mortgage doesn’t offer construction loans, we can help you with permanent financing once the home is finished. Take the first step and start your approval online today. You can also call us at (888) 452-0335.
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