04 Sep What will it cost to design and build a 3000 sq.ft. house?
The most common question we get at DOS is “what is the design cost”, followed by “what is the cost to construct”. There is a short, and not very helpful answer of “anywhere from $200 per sq.ft. to $900 or more per sq.ft.” with design costs ranging from 2% to 10% of construction costs. That works out to a construction cost of $600,000 to $2,000,000 or more, with a design cost ranging from $12,000 to $200,000. Not very helpful information is it?
One way to think about this question is to compare it to something you’re more familiar with, like “how much does it cost to buy a new vehicle”. Without more information, that answer has a similar range in responses. A new vehicle will cost anywhere from $10,000 to $200,000. What defines where your vehicle will be in that range?
Start with how are you going to pay for it? (Monthly Payment or Purchase Outright) and what is the maximum monthly payment or all all out payment you can afford? This answer is the very first step in filtering your options and eliminating the vehicles above your top spend. Lets say your maximum budget for payments is $400 per month. The longest finance rate available to you is 8 years. That works out to $38,400 for maximum price. First thing is to minus the tax (lets say 12%) that leaves $34,285. Now remove all the freight fees, finance fees, dealership fees, (lets say $5000), That leaves you with a max purchase price of $29,285 for your new vehicle. So, YOUR new vehicle will cost anywhere from $10,000 to $29,000 to purchase. That’s a more useful answer isn’t it?
We should narrow it down more, but this will require more information from you – like what do you need the car for? How many people do you need to fit in it? Maybe you need a Pickup, a Minivan, or just an economy 2 door Hatchback? Lets say, you have 3 kids under 15, a spouse and 2 dogs. This filters your options down to new cars under $29,000 that seat 5 with some decent trunk space. This eliminates anything with 2 doors, and from experience, puts you in the Minivan or SUV category. Now, you can get a dialed in range that’s appropriate, YOUR new vehicle will be an SUV or a Minivan, and will cost between $25k and $30k.
So, The actual question you need to ask is: how much will it cost to design and build YOUR house. Lets apply the same principles, and see:
- How are you going to pay for it? Monthly Payments
- What is the maximum monthly payment you can afford? $4000/month
- Punch this into an online mortgage calculator: A $4000/month mortgage with a 30 year Amortization comes out to about $960,000
- $960,000 minus tax (lets say 12%) that leaves about $857,000.
- Now we recommend saving between 3% and 10% as a contingency, but let’s assume you only set aside 3%, that leaves you about $832,000
- Now remove all the soft costs: City fees, Permit fees, Engineering, CEA, Utility fees and demolition / excavation…… (approx $160,000) that leaves about $672,000
- Find your price per sq.ft. : $672,000 / 3000 sq.ft. = $224 per sq.ft.
- $224 per sq.ft. is on the very bottom end of the construction cost slider. This eliminates everything on the Luxury, Custom or complicated category for house design and subsequent construction. At DOS Design Group, we refer to this as the “Contractor Special” package. (Referencing the vehicle analogy earlier – this is the compact, no frills, base package compact vehicle)
- Lets narrow it down a bit more:
- What City is this house in? Surrey
- Is the lot flat or sloped? Flat
- How many bathrooms and kitchens do you need? 3 bedrooms, 2.5 bathrooms and 1 kitchen
- Will there be a basement / cellar? Yes, with a 1 bedroom Suite
- Wish list: open floor plan, 1 office, deck, pantry, laundry room on upper floor
- With the above information, we can now appropriately price and design your 3000 sq.ft., $960k house. You can afford a basic stock plan with some minor interior modifications. Your choices are vinyl or hardy siding, and entry level millwork.
- If you are looking for something different here are some other ways to look at it
- If you are looking for a higher level of finish but can’t increase your budget then reducing the sq.ft. could potentially free up some budget, for example: the same $672,000 but with only a 2500 sq.ft. house = $268 per sq.ft. which is an extra $42 per sq.ft. which could be applied to the finish level
- If you need more usable sq.ft. then maybe the Suite could be roughed-in but not finished right now, and then built out later when the money is available as the extra Kitchen and Bath are a significant cost