Should You Build Your Own Home?

I’m sure many people have dreamed about building their own home. How many times have you said, “If I were building my own house I would do …”  when the house you are living in doesn’t quite fit the lifestyle you would like?   Or said, “Our budget will not allow us to buy the size house we need!” because you have more kids than bedrooms.

Then you start questioning yourself,  “I don’t have time,” “I’m all thumbs,” “I’ve never built anything before,”  “How can I afford it”?

Whether you are currently renting and just want a basic home you can call your own or want to build a huge custom home just like you want it, there are many reasons to build it for yourself (which happens to be the catchy name of my website).

It is possible for you, yes you, to build your own custom home yourself and there are many benefits in doing so.  Whether you want to be your own contractor to design and build a truly custom home or if you’re the hands-on type who wants to build your home with your own hands this is the place for you. Not only can you make it as simple or elaborate as you want, but when it is complete the market value could exceed your investment by well into thousands of dollars.

I am going to share a secret with you that commercial home builders won’t tell you. It’s not anywhere close to rocket science!

People have been building their own homes for thousands of years without any more knowledge that their neighbor showing and telling them how he built his house and helping them built theirs.  In addition, the people who work on houses often do not have the training, experience or motivation to perform top-quality work. I’m not saying they won’t do fair work, but they won’t care as much as you will about the product quality.

That is exactly what I am going to do for you. I’m going to be the neighbor that built their own house and I am going to help you build yours

We will go through the building process step by baby step, from buying your lot to the last bit of trim and paint and also discuss how you are going to find the time, money and skills to do this.

You don’t have to be the bearded, macho, carpenter either.  This is not about strength or height; this is about skill and knowledge. Women can become as skilled in the process as men and often times their attention to detail and social skills make them better builders. In fact, a woman with no knowledge regarding carpentry or plumbing that wants to learn will usually be more successful than a man who thinks he knows what he is doing (sorry guys, we can be stubborn sometimes).

You are saving much of the cost by using your own labor, whether it is driving your own nails or being your own contractor. Not only do you start with a much smaller mortgage payment but when you are finished your home will be worth much more than the amount you have invested.

This is called “Sweat Equity” 

Think this possible outcome.  Not only is your mortgage payment 2/3rd of your neighbor’s but the home you spent $120,000 building now has a market value of $165,000.  That means if you sell it tomorrow you have made $45,000 profit. This is the equity you learned with your labor.  Now do you see why there are so many commercial home builders out there? There is serious money to be made here.

Let us say that you spent all your time on the house except when you are at your day job. Say 3 hours per evening 4 days a week and 10 hours on Saturday and Sunday.  Say 30 to 32 hours a week. Now if you are hiring a lot of subcontractors you may be move-in-ready in 6 to 8 months.  So 125 hours per month for 8 months is 1000 manhours. That means the $45,000 equity you worked a thousand hours for means your hourly income was $45. Not bad, huh?

If you build the house with mostly your own labor, you can create even more sweat equity but it will take longer. Say it takes 18 months, but now you have only invested $80,000 in materials. Yes, you have put in 2,250 hours but your equity is $85,000 and your mortgage payment is $500 per month.

You’re thinking two things right now.

How am I going to find 30 hours per week and how can I end up with that much equity?

Here is my story. I built my own home in 1985. 1700 square feet 2 story. very plain, cedar siding. It took 18 months and when it was all done I had $35,000 invested. Now, there were some extraordinary circumstances (like I salvaged about $10,000 in lumber) and had already bought the land for $7,000, so figure I actually had about $52,000 total it. The home appraised at $126,000. I sold it in 2004 for $146,000.  At the time I had a decent job and could live on roughly half my take-home pay.  It generally worked out that The second half would buy enough materials to keep me going a month. Only at the end with the HVAC, carpeting and appliances did I have to borrow about $5,000 which I was able to pay off in 6 months.  So I ended up with a $125,000 house with no mortgage.

I’m not saying I could duplicate that again. I was able to call in a lot of favors and got a lot of material for next to nothing. but it shows that sweat equity is a real thing.

As far as the 30 hours per week? We are going to discuss how to do that in future posts.

You have to decide if the time you invest is worth the gains you make. It may be the only way you can get ahead is investing your time.  Say you do most of the work yourself and it takes you 18 months.  Doesn’t having a home worth twice what you put in it, plus a new-found set of skills and the satisfaction of saying “I built that!” make the time worthwhile. Only you can answer that

The first few posts of this blog will apply whether you are acting as your own contractor or planning on doing the actual work yourself.  We will talk about where to build, budgeting and funding, discuss zoning and restrictions, building permits, plans and contracts.  Once we get to the actual building I’ll have separate sub-topics for Contracting versus Your Labor. I’m also writing a book on being your own contractor, which I hope to have ready in a couple of months. Then you don’t have to wait for the blog posts and can get started right away.

Please give me feedback on what you are considering to build, what skills you are most interested in learning and what issues might be unique to your area. If people are interested I will develop sub-topics on country building, off-the-grid houses, container homes and major renovations,  or any other aspect of building that might interest you.  I am new at this blogging stuff and would really like to hear from you.