By: Thom Gallagher
Build vs. Buy - What's the Cost Difference?
Tags: cost to build a house, building a home, new house on vacant lot, home build costs
Given today’s rising house prices, several clients have considered buying a vacant lot to build their next house. From personal experience, building new or going through significant renovations is incredibly exciting, stressfull and rewarding. If you’re considering taking on such a project, here are a few things you should know:
Buying a Building Lot:
- A standard urban residential lot in Halton HIlls, 40' x 130', will cost approximately $450,000, depending mostly on size and location;
- The “rule of thumb” used for construction costs is between $175 - $250, or more, per square foot depending on the contractor, size, design and finishings. A 2,000 square foot home will cost $400,000 at $200/SF;
- Construction costs do not usually include project changes (scope creep), fixtures, appliances, decorating nor landscaping. It is critical to fully understand what your contractor is providing to avoid surprises down the road.
- Be sure your contractor has a change request process so that all changes to the scope of the project, whether instigated by you or the builder, are properly described, quoted and approved. This will ensure you know your budget throughout the build and eliminate any billing issues at the end of the project.
Development Charges & Permits:
- Architectural drawings can be done by a builder, designer, technician or architect. Drawings for our recent bungalow renovation by a local designer were approximately $10,000 including engineers review and HVAC plan;
- Building on a vacant lot (one that's never had a house on it) will likely attract Development Charges. In Halton Hills, a detached dwelling with water and sewer connections will cost just over $50,000 in Development Charges;
- If a structure with water and sewer is already on the lot, the development charges are typically nil.
- Demolition and disposal costs can be expensive; expect to pay over $20,000 to demolish and dispose of a small bungalow
- Building permits are issued depending on the scope of work and size of project and start from $3,200 for a new build in Halton Hills;
- Additional permits are required from the Region for water and waste water.
Septic Systems & Wells
- A septic system and new well can cost close to $40,000 for a rural property assuming there are no complications.
- Many of the builders I have spoken to suggest a 10% minimum contingency in your budget to accomodate, among other things, projects changes and those inevitable issues that arise in every project.
Putting it all together, you can expect to shell close to $1 million to build a 2,000 square foot home on an urban residential lot (at least in Halton HIlls). Yes, you can save money by doing some of the work on your own or being your own general contractor; by building a smaller house with lower end finishes; by buying a cheaper lot, and by keeping finishes and landscaping to a minimum. Regardless of what you plan to do, there is no question that the frustrations and struggles of a new build are immense, however, after the fact, the joy and pride that you get from walking into a house that you envisioned and designed is unparalled.
If you are looking for a building lot or thinking of making a move in Halton Hills or throughout the GTA, call Thom at (416)524-6530 today for all the professional help and support you need.