Usually “cheap” isn’t a term we like when talking about constructing our homes. But as Savinly readers, we recognize there are smart ways to build a house and keep costs down at the same time.
With the resale housing market so volatile, now could be the moment to explore building your own home instead of buying an existing one.
You may believe you’ve already gathered plenty of ideas from those popular home-building and renovation TV shows. Plenty of inspiration, too. Keep in mind, though, each extra feature adds expense. Pause and consider — do you truly need a pot filler over your stove or reclaimed hardwood in every bedroom?
Here’s how careful planning and a bit of practical knowledge can help you find the cheapest way to build a house while still getting the essentials you want.
Start with a Comprehensive Home-Building Plan
A plan isn’t the same thing as a budget, though a plan does include a budget and much more. This is the proper place to begin your home build.
Be frank with yourself during this phase, advises architect Donald Ruthroff, principal at Dahlin Architecture Planning in California and a member of the National Association of Home Builders.
“I can design toward any budget, but you have to be clear about the funds you have,” Ruthroff says.
Think through every piece of your project. Your plan should cover the following:
- Money: What is your total spend limit for the home? Where will the funds come from — savings, a construction loan, or elsewhere? Ruthroff recommends tacking on at least 10% for unexpected costs and overruns.
- Land: Have you identified a lot? What zoning and regulatory rules apply? Does the site need grading, excavation, or other site work?
- Permits: Which permits are necessary and how long will approvals take? Every jurisdiction has its own rules, and most permits cost money. Understand the inspection schedule too — missing an inspection can force you to undo work, increasing expenses.
- People: Consider who will take part in the build. That includes the architect for plans, the contractor to manage the project, the subcontractors doing the work, and anyone else involved in decisions.
- Operating costs: When you think about square footage and layout, don’t forget ongoing expenses to run the home. Size matters — property taxes, utilities, upkeep, insurance, and more should be part of your plan.
- Timeline: How long will construction take and where will you live until it’s finished? According to the U.S. Census Bureau, half of homes started in 2020 finished in four to six months, with another 18% taking seven to nine months. Paying for a build and temporary housing can add up fast.
- Needs versus wants: What are your nonnegotiables? How many bedrooms and bathrooms? Which extras are genuine priorities and which are optional?
Many builders will manage items such as land acquisition, permits, materials and the workforce (including contractors and subs) so you don’t have to handle all those details yourself. One such builder is Cincinnati’s Cristo Homes, where Michelle Fletcher works in new-home sales.
Fletcher’s experience yields practical advice at this stage. For example: if you plan to finish a basement, add a laundry room or include a wet bar later, it’s smarter to include rough-ins during the initial construction.
“It’s much more costly to retrofit a bathroom later if you didn’t run the plumbing beforehand,” Fletcher says.
General Contractor or Acting as Your Own?
A general contractor oversees the daily progress of your construction. They typically order materials, hire and coordinate trades, monitor quality and handle many details.
To trim costs, you might consider being your own general contractor. But be cautious: while this seems like a savings strategy, it can backfire and cost you more over time.
Before deciding to self-manage the build, ask yourself:
- Do you have construction and project-management experience?
- Can you spend significant time at the job site?
- Are you familiar with permits and the construction workflow?
- Do you have established vendor and subcontractor contacts?
Seasoned contractors often anticipate cost overruns and bake contingencies into their budgets. They understand where to economize, where to invest, and how to locate reliable subcontractors.
“Good luck,” Fletcher says about tackling it solo. She notes that professional contractors enjoy vendor relationships and bulk purchasing power. “If you do everything yourself, you’ll likely overpay for materials and it could take you years to finish a house.”
Simplify the Home Design
We each have a vision of an ideal home, but if your goal is to build affordably you can’t include every luxury. Streamlining the design of your house will produce savings.
- Build a simple shape: The more box-like the design, the cheaper to construct. A single-story ranch on a slab with a basic roof is the most cost-effective footprint. Bump-outs and complex angles raise expenses. Later, you can add landscaping to boost curb appeal.
- Build up rather than out: Because land can be costly, adding a second story can be more economical than expanding the footprint. Building vertically reduces foundation and roof square footage.
- Mind the roof: Roofing style and materials greatly affect cost. A flat roof is typically the least expensive, followed by gables and then mansard roofs. Coverings — shingles versus tile — also change the price. Don’t forget to check local building codes and insurance implications; some roof styles can reduce insurance costs over time.
- Cluster wet areas: Placing bathrooms, kitchens, and laundry close together cuts plumbing runs and materials. Ruthroff recommends mapping sink and fixture locations early and sticking to the plan — moving plumbing after framing is costly.
- Avoid customization: Choosing stock items like prefabricated cabinets and standard-sized windows saves considerably over bespoke pieces.
Don’t let the dream overshadow the cost of all those “wants.”
Ruthroff recommends gathering images of designs and features you like during the planning. “Knowing your likes and dislikes makes the process smoother, and that will save you money.”
Focus on Structural Priorities
Building with the essentials and planning to upgrade finishes later can help you save when building a home.
Interior strategies include:
- Skip pricey fixtures and finishes: Ruthroff warns it’s easy to chase brand names or assume you need top-of-the-line for everything. Find styles you like and ask your designer or contractor for less costly alternatives. You can upgrade later, and sometimes you realize you didn’t miss the splurge.
- Paint consistently: Fletcher advises painting the whole home one neutral color initially, then add custom DIY accents later — it’s cheaper.
- Avoid fads: Some items from home-improvement shows are wants, not needs. Examples include pot fillers and massive soaking tubs, which may not be worth the expense.
“If we’re working with a budget, I’d ask how often you’ll actually use that feature,” Ruthroff says. “Maybe you’d prefer a few extra square feet in an adjacent bedroom or a larger closet. Removing that tub could give you usable space for daily living.”
A good designer or contractor will help you determine where to splurge and where to save inside the home.
Flooring may be one area worth investing in a bit more, Ruthroff notes.
“In my house, we opted for engineered hardwood because we have a big dog,” he says. “The floors have endured. I’m glad we spent on that.”
Another area to consider spending on is kitchen countertops, since you use them daily.
Appliances are often where you can economize, he adds. “Select appliances based on how you’ll actually use them — do you need an ultra-premium range?”
Know the Cost Differences in Materials
There are multiple construction methods and many material choices during a build. Selecting the right materials can reduce costs.
Builders like Cristo have already run the numbers for you. Examples of cost-saving material choices include:
- Framing: Wood framing is often less expensive than concrete block, though in some regions block may lower insurance costs. Factory-built wall panels can save framing time and labor. Precast concrete — poured and cured in a controlled environment — is usually cheaper and less weather-sensitive than onsite pours.
- Energy-efficient choices: Some upgrades cost more initially, but lower long-term expenses — insulation, high-efficiency windows, and efficient appliances are investments that pay back over time.
- Exterior options: Vinyl siding tends to be cheaper than brick or poured concrete. Stone veneer provides the look of stone at a fraction of the cost of full-thickness stone.
- Alternative wall materials: Instead of traditional drywall, consider concrete board products or other options like corrugated metal or bamboo in appropriate settings.
You must verify what materials are allowed in your area — local codes and ordinances may restrict certain products.
Also seek rebates and tax incentives for energy-efficient materials; they may cost more upfront but deliver savings later.
Homebuilding firms like Cristo leverage supplier relationships to achieve volume discounts, which translates to lower costs for buyers.
They also provide design packages and options that combine multiple cost-saving strategies. Limiting floor-plan and finish variations can help you discover the cheapest way to build a house.
Two Common Mistakes to Avoid
Whether you self-manage or work with a builder, it’s easy to make missteps during a build.
Mistake #1: Constant Changes
No matter how thorough your planning, changes and mistakes will occur — that’s normal for a large project. But Ruthroff cautions against constantly second-guessing each choice.
The flood of decisions during construction can be overwhelming, and making alterations can produce delays that increase costs.
Mistake #2: Overbuilding for the Neighborhood
Make sure your home fits within the context of surrounding properties. “People over-spec,” Fletcher says, referring to adding features that raise cost but not necessarily value.
You might end up with the most expensive house on the block because of luxurious finishes and customized lighting, yet “the appraiser may not assign value to many of those extras.”
Keep your objectives in view. This is your house and it should reflect what you want, while ideally conserving money.
Fletcher has advice for those obsessed with having the fanciest features.
“Being the best requires perspective,” she says. “Step back and ask, ‘Is that something you truly need?’ It’s fine to seek a showpiece as long as it fits your budget.”
Riley Martinez is a freelance reporter based in Florida with more than 25 years of experience covering finance, health, travel and other subjects.
