Bulding a house on own lot, cost?

Question

I my current house has two lots. I want to build a investment home on the second. Contractors are trying to gouge me! how much should a traditonal colonial 2000sf home costs?

OK, I am in the Baltimore Washington, DC area. I am looking for a home to sell in the $350 to 400k range. I anticipate the construction cost to be in the $250K range. Everyone want to do mega custom and not the small stuff. also the lot is norrow and less than half an acre.

Answer 1

This truly depends where you live! for example I live in Washington state near Portland Oregon, a 2000 sq ft Nicely done home here is worth 300k + where as in Texas it is only 175k or Idaho its only 150k..
Cost to build varies widly depending on how nice the home is equipt.
Generally speaking contractors take the actual cost to build and put in a 10-20% markup for there profit.

Answer 2

Too many unknowns for a answer. Where do you live? Traditional colonial of 2000 sq ft tells nothing about design to estimate costs per sq ft. Your location is a large factor as costs for materials vary by locale. As for gouging you if they see someone who knows nothing they will try to do just that. Take you for everything you can give. You need to do a lot of homework starting with checking out a realtor in the area that either you or someone you know has worked with. You need to evaluate costs vs if this will be a rental or for sale investment. Are you in the financial state to cover the total costs should you have problems selling or renting which ever you decide. Does the current market have room for another new construction home in your area. I would suggest checking with an investment counselor to make sure that the kind of money your thinking is not better suited to another type of investment. One large thing would be seeing as you would effectively cutting your own home lot in half is that something you really want to do. Try hanging a line along where the divide would be for a few weeks or months and see how much it changes things first?

Answer 3

I agree with the previous poster. There are so many variables that come into play:

1) Location, i.e., a home in California will cost much more than an equivalent home in Utah.
2) Amenities, e.g., type/quality of flooring, two-tone paint, type/ quality of appliances, etc.
3) Materials, e.g. vinyl siding vs. stucco, brick, stone, cement board, etc.

However, we built a 2,200 sq. ft. home in Utah last year. Prior to construction, when we seeking bids, we were told a general rule of thumb is $100/sq ft. Because we wanted to upgraded interior amenities like stone and wood floor, two tone paint, custom plaster finishes, we opted to do some work ourselves to keep the cost under control.

I worked very closely with the contractor to stay on-budget. The key is having a contractor you trust and have a mutual understanding. Do your homework with materials, subs, work you can do yourself, etc. So, you know what you're paying for.

Answer 4

it will depend on what amenities you put into those 2,000 square feet. it will depend on the quality you want.

someone that i've known all my life, a person who is extremely wealthy almost entirely from real estate ownership, told me when i first started selling real estate that when i buy my own, to purchase the maximum i could. she meant the best of what i could afford. she meant, therefore, to spend a few bucks more to get the highest quality.

after practicing many, many years, i learned why she told me that. first, in a higher quality house with the amenities that i want, such as solid wood cabinets, doors, superior joists (and other structural components), best designed bathrooms and as many as i want, i know that i can sell the house quick, for the highest amount of money, in the future.

what i would do is determine which amenities your buyer, in that neighborhood, is going to expect and then i'd have the builder put them there.

there really is no set price. it "depends." i'd research the builders' reputations and go to visit the homes that they built at least 5 years ago to see if floors are sloping, the foundation has cracked, etc., and to ask the residents what they feel is good and bad about the house.