What could be more thrilling than starting down the path to designing your custom-built home? In order to pay for that dream home, however, you are going to have to get your budget in line. Budgeting properly will be the key to this project coming to fruition and not leaving a half-built shell behind.
Establish a Clear Framework for the Budget
The very first step is to identify the maximum amount of money you have to spend on this project. To be clear, this is not going to be the value of the home, as there are other costs associated with building a custom home that will have to be accounted for outside of this initial budget, including an emergency fund. So, for example, if you have a $1 million budget, you may find that by the time you deduct other costs, there is “only” $750,000 to dedicate to the design and building of the custom home.
Set Your Emergency Fund
As we noted above, you will have to account for a contingency fund for things that will just pop up and emergency costs. There are always permits and such that may not have been accounted for during the initial planning stage. We recommend putting aside 10 percent of your maximum budget for these costs.
Unless you have bottomless pockets, there will undoubtedly come a time when you have to make a decision between “A” or “B” in the design of the home. For instance, do you really need heated floors or do you want that water feature in the backyard? Once you fill out your list of “must-have” items, take the time to prioritize the other features so you know where you can cut if need be to keep the project on budget.
Choosing Your Team
This is something we have beat to death here and we will continue to stress because if you do not pick the right team, the project is headed for challenges. Pick a team that understands your goals, will respect your budget, and that you can address challenges without it turning into a confrontation that could derail the project.
Review and Adjust
Estimates are just that… estimates, and there are times when some actual bills come in way over the number for which you had budgeted. By regularly reviewing your costs and budget, you can adjust as needed as the project moves forward.
Remember, you have budgeted for contingencies and emergencies, and you have the right team in place, so there is no challenge that can arise for which you are not ready. As this project moves along, you will be amazed how many times thinking ahead with that contingency plan will bail you out.
If you are considering a custom-designed home, Better Build Now can help. We can serve as a project consultant or a residential construction project manager to help you ensure your dream home becomes a reality. For more information about these services, please give us a call at 888-402-4180.