Is Homebuilding for You?

Why on earth would someone want to take on the construction of a house by himself? There are many reasons, but, to me, the most powerful motivator is money.

After we completed our present home, we had a couple over for dinner. They are realtors, who own one of the top brokerage firms in our area. After they had seen the house throughout, I casually asked what they thought it was worth. Both agreed immediately that (with a little more finish work) it would bring about $220,000. I was pleasantly shocked. Our total investment (not including blood, sweat and tears) was a modest $66,000, including the 2.5 acres it was sitting on.

Currently, 10 years later, it is worth around $260,000. Not all who build will see that cost to value ratio, but, it is possible. I doubt anybody has ever built his own home to find it valued at less than his investment.

Consider that approximately half the cost of a home is labor, and that the builder makes, and deserves, a 10 to15 percent mark-up. Simple math would put your cost at 35-40 percent of having someone else do everything. Once again, your results may vary, but I have found similar figures interviewing others who have built.