What does it cost to design and build a remodel, addition, or custom home?

Many people interested in designing and building a custom project start with the question: “How much will it cost to build?” When people hear the answer, their next question is, “Why? I thought it would be less expensive.”

Then come the following thoughts:

1. “My friend told me that projects can be built for $200 per square foot”
For years people have heard a general rule of thumb that houses can be built for $200 per square foot. They think that if a 3000 square feet house costs $600,000 to build, then a 500 square feet remodel or guest house should cost  500 square feet X $200 per foot = $100,000. But this just isn’t true.

The $200/sqft number can be accurate, but the size of the house has to be large enough to take advantage of economies of scale. Generally, the bigger the house is, the less expensive the per square foot cost can be. The smaller a house is, the more expensive it is to build per square foot. You’re going to have to build a 2500+ square foot house to be able to hit that $200/sqft number.

Also, when a builder says they can build a house for $100 per square foot, they are talking about the costs to build in a subdivision in some place like Atlanta. They not factoring in design, engineering or permitting costs. These costs alone are often over 20% of the project. They are not factoring in quality construction you’d expect in almost any coastal or metropolitan area.  In many place costs of $500-$1,000 per square foot are not only common but spending that much makes sense as that is the cost of a quality and finish level that owners expect.

And finally, the cost per square foot can change dramatically based on the location of the project. For example, costs to build in a coastal city can be as low as $200/sqft but modern projects in Dwell Magazine are easily in the $500 per square foot or even $1,000 per square foot cost.  As home prices continue to increase around the country, the cost of building increases as well.

2. “I just want a simple house.”
That’s great. But even a simple house is a complex feat of permitting, engineering and back breaking labor.  These things take time and money.

As an owner, it is helpful to know that all projects are built using the same process:
a) Figure out what you can build, including permit requirements in your city or county, if you do that kind of thing 😉
b) Work with an architect or designer to draw up the size, look, and shape in a “schematic” design.
c) Submit the design to the planning department to get planning permits.
d) Once you have the planning permit, have the architect draw up construction documents for a building permit. This often requires two or three engineers such as structural, soils and civil.
e) Determine all the “finishes” which include appliances, faucets and fixtures, materials, tile, paint colors, landscaping, utilities etc..
f) Work with builders to get bids, select one, sign a construction agreement, prepare the land, pour a foundation, frame the house, enclose the house, hook up water/electric/sewer, and install finishes.

Whether you build something that is 500 square feet or 5000 square feet, all of these steps are taken.

3. “I’m thinking a prefab house because it’s easier.”
This is possible but it really depends on your site,  existing home and personal goals. Blu Homes and Living Homes are the top of the line if you go this route.  Buying a home that is built somewhere else can reduce design fees, but it still needs to meet your city and county codes and then be permitted. Then it needs to be shipped to your location, and if that location is in an urban setting, you’re looking at significant costs to shut down streets and hire a crane to lift the unit into place. Once it arrives you will have paid for the same foundation and water/electric/sewer hookups that you would need with a stick-built home. By the time all of this adds up, you are looking at a similar price to building a custom house. And while you don’t have to spend time designing prefab, you still have to spend all the time getting permits.  Most importantly, a custom home allows you to design something specific to your needs and the lot in which it will reside.

4. “My uncle is a handyman or contractor and can build for me for cheap.”
The best way to save money is to do the work yourself. It will take you a long time and you will make mistakes, but it can be an amazing and fun experience. One of our favorite projects is this Normandy Style stone house in Upstate NY. The walls on this thing are 2′ thick stone!

Moriarty Farm House 1         Moriarty Farm House

The owner spent seven years getting to this point.  It is a $1,000,000 home that will cost less than half that and it is a work of art.  We’re not counting this husband/wife team’s 10,000 hours of labor in our costs though.

If you want to try a DIY project, just be really careful because construction is the definition of back-breaking labor.

The second best way to save money is to manage all the subs (electrician, foundation, framer, plumber, drywaller etc…) yourself.  The most skilled subs prefer not to work for inexperienced clients.  They are concerned that your inexperience will require too much of their time as you make decisions, that you will call them back repeatedly and they will end up making very little money due to the extra time.  So owner builders often get stuck with the second tier subs and that can be painful!

If you have a relative who is skilled and experienced and willing to work for free, jump on that and do it… but again, we’ve seen siblings stop talking to each other when the builder in the family is too slow or too expensive.

5. “A builder I know says he can build for $X.”
Be very careful with this scenario. When you get a bid from a builder, make sure they give you a price for every line item that will go into the house, from permitting, to design, to construction, to cleanup. Permits alone can cost $15,000-$100,000+. Architect and engineers are often 15% of the project’s total cost too. At New Avenue, our process requires that our partner builders review a 200+ line spec sheet with every single piece of building a house so no one can say the dreaded phrase, “We didn’t talk about having a (insert whatever you like here, such as “sewer line”) for the house. That will be an extra $5,000.”

6. “Where does New Avenue get information about building?”
After working with many architects and builders on over 500 projects, we have a very unique data set that shows exactly what every component of building a house costs. For example, we can easily pull up a project that we managed and show that the foundation for a home in a landslide zone with 12 piers going down 10′ each cost $40,000. Or we can pull up a sheet that shows a house with $7,000 allocated to Hardieboard siding and the fair change order (and totally a good idea) to change that to cedar shingles.

7. “Can you give me a sample breakdown of costs to build my project?”
This is our specialty. Let’s say you wanted to design and build a 1000 square foot project in the San Francisco Bay Area.  We would start by showing you what a similar, recent, project we completed cost. This would include every detail.  Then we adapt that budget to meet your needs.

Here is a shortened example of a small project:

– Initial Assessment and Permit Research: $400
– Design Fees: $5,880
– Construction Documents: $5,400
– Engineering: $4,500
– City Fees: $5,620
– Survey: $2,300
– Construction Administration: $3,400
Total Design and Permit Costs: $27,500

– Demolition: $2,100
– Site Prep: $7,100
– Foundation: $11,975
– Framing & Carpentry: $23,700
– Insulation & Moisture Protection: $3,500
– Windows & Doors: $6,489
– Finishes: $14,825
– Plumbing: $13,900
– Heating and Ventilation: $3,400
– Electrical: $5,300
– Contractor Overhead and Profit: $15,100
Total Construction: $107,389
Total Project Cost: $134,889

We can show you this for $100,000 projects and $2,000,000 homes and everything in between.

 8. “Can spending a ton of money  still give me a good return on investment?”
Absolutely. The financial return is often there and more so, the real return is usually so much more valuable than any cash you might collect in a future sale. A creative space, family room, home office, guest room or anything that increases the value you and your family get out of your home can make the investment well worth it.

Financially, many of our clients create something that is worth more than the cost of construction.  So their return is crystal clear.

Other clients spend $200,000 building a guest house that increases their mortgage payment by $1,200 per month. Often times they can offer that home to a child or parent who would be living somewhere else for many times the cost of the guest house.  Other people use this as a home office and create a new business from home.  Many people choose to downsize and move into their accessory dwelling while renting out their main house, bringing in even more rental income. Or by creating a second unit for your child or your parents you can avoid paying for many of the expenses of living separately such as rent to live elsewhere, maintenance and taxes of owning two homes, or the high costs of assisted living.

No matter what you are considering, the New Avenue platform is the easiest way to get organized, get bids, hire a team and manage your project.

You can sign up and use the New Avenue system for free here: Get Started

Have any questions? We are available to discuss your goals & ideas. There’s no fee or commitment. To request a time for a call, just click here and tell us when to call you.

 

Should I create an addition, backyard cottage, or remodel?

New Avenue starts every project with our 30 questions. You can skim these questions and answer a few of them in five minutes or you can spend an hour.  We recommend you spend about 15 minutes.

These questions are based on thousands of past client meetings. We also collect feedback during construction changes and figure out what we have to ask early on in the process so we can avoid making the same costly mistakes in the future.

A client recently contacted us with some questions about what to do with their home. They are in their 60s and want to make a long term plan for how to use their home.

Here are a few of our questions and their answers.  Their full design proposal is below too:

Q: What do you want to do?

A: We would like to add a rental unit to our existing two story & 5 bedroom & 3.5 bath home.  We really do not know if we should do an addition or add a cottage/tiny house to the backyard, so we need help.

Q: What are you using this new space for?

A: We would like to rent it out either as a sublet or airbnb for extra income.

Q: If applicable, what is the 25-50 year plan for your project? For example, you may be renting out an inlaw unit and will eventually move in later.

A: We are not really sure. We could move into the new unit eventually.   We are in our 60’s so we hope it’s a 50 year plan. (:-)).

After reviewing all of the answers and questions they submitted in their Goals & Ideas questionnaire on www.newavenuehomes.com, one of our local designers met with them and provide this Design Proposal.

We’re excited that they quickly approved the proposal and design is beginning this summer.

To get this project started the owners:

  1. Filled out the Goals & Ideas survey on Newavenuehomes.com
  2. Set up a call with a New Avenue project admin to review the design/build process
  3. Paid $250 to have a Design Session with a vetted New Avenue designer
  4. Met with the designer
  5. Received a Design Proposal and clicked approve.

You can read or download the Design Proposal here: Cost of Oakland Basement Conversion to Accessory Dwelling Desig

 

Cost to design an accessory dwelling in Albany, CA

As part of New Avenue’s efforts to educate owners and architects about the timeline and costs to design and permit projects, we are sharing this detailed design proposal for an accessory dwelling in Albany, CA.

You can view and download the entire proposal here: Design Proposal Accessory Dwelling Albany

Sign up to see example budgets, example floor plans, or to use the New Avenue system for free here: Get Started

Cost to design, permit and build a house in a landslide zone in Berkeley

These are the architecture plans and the budget for completing a small backyard home in a landslide zone in Berkeley.

Anyone considering building on a steep lot and especially a landslide zone will get a wide range of potential costs. These costs vary by project and site of course.  This is one point where you can mark down as accurate.  We finished this project.

Frankly, it’s expensive. The full cost of just the excavation, concrete piers and foundation was close to $40,000.

For the full budget including every line item, see the attached pdf at the bottom.

 

This is the site plan for the backyard cottage.

Site Plan

This is the “elevation” of the front of the house.

Elevation (View from the Front)

This is a more detailed floor plan.  Note how much counter space is in this relatively small kitchen.  It’s better to have room to cook than room to watch TV:)

Floor PlanThis shows the 12′ deep concrete piers that had to be drilled, filled with rebar and concrete, then tied into the visible part of the foundation. Concrete PiersConcrete Piers 2

 

Click here for the full budget including architecture, structural engineering, surveyor, soils engineering (geo tech), permits, site work and all construction.

Budget for Completed House in Berkeley Hills

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Jacob Bek, a New York City Architect discusses a Hamptons summer house and the cost of firing the architect

Let me tell you a quick story about a recent client of mine, what not to do, and the serious impacts their early decisions had on their dream home.  These clients, let’s call them Jack and Jill (obviously not their real names), purchased a new summer home in an exclusive neighborhood about an hour east of New York City (The Hamptons). The house needed serious work, but the property and location were great (minutes to town and the beach). “Jack and Jill,” both very successful professionals, and at no fault of their own, had never experienced a building project and didn’t understand the process or role of their architect.

“Jack and Jill” first hired a “design architect” to “design” their home renovation project. I put “design architect” in quotations because this individual misrepresented him/herself as an “architect,” was unlicensed, and therefore illegally practicing architecture. Saying nothing to the design, a professional may had advised the clients that they would be happier, and it would be more cost effective, to simply rebuild the home. Regardless, they continued through the design stage with this individual, and then were forced to hire a second “licensed architect” for the limited purpose of permitting. This second architecture firm was not invested in the project and only preformed their limited scope of obtaining the required municipality approvals.

Then with very poor drawings and documentation the project was bid to three contractors. When the bids came back, the lowest was just over one million dollars, and the highest nearly three. This disparity alone tells you there was something very wrong. Without a professional architect guiding the project, controlling the budget and very poor documentation, there was no possible way any contractor could accurately bid on the job. The lowest bid was chosen and the “design architect” claimed he/she could handle overseeing the construction. Needless to say the “design architect” was not qualified and unable to do so; and half way through construction, the entire job site nearly stopped. The first “design architect” disappeared, the second architect only performed the work he/she was contracted to, and the contractor did not know how to proceed. At this point it was nearly two years into the design and construction process. This was when I was called, architect number three.

Constrained by the previous design and the work already preformed onsite, we halted all pertinent site work, quickly triaged the project and design, and were able to get the site moving again in a few weeks. It took a few more months to truly get the project back on track. The cost (emotionally, monetarily and in time) of not having a professional architect guiding the process was high. The project ended up costing nearly twice the initial bid and was delivered over a year late. On the upside, we were still able to work with the contractor and our clients to deliver a home they absolutely love and will continue to enjoy for many years.

Yes, part of why I tell this story is to demonstrate the importance and eventual savings (time, money and headache) an architect can provide throughout the entirety of your project. However, the main reason why I tell this story is to display the role and importance of your architect as an expert, organizer and professional leading your project, regardless of his or her skill as a designer. Of course it is essential to hire an architect based on his or her past work and design sensibility, but it is equally, if not more, important for your architect to be a professional and person you trust. You’re entrusting your architect to not only design your project and oversee the construction team, budget and schedule, but work closely with you to realize your dream. My personal view is that a very good architect will do just that, but a great architect will allow you to discover and deliver a project far beyond what you could ever have envisioned.

Jacob Bek, R.A. LEED AP
jba collective

www.jbacollective.com
info@jbacollective.com

Sign up to see example budgets, example floor plans, or to use the New Avenue system for free here: Get Started