HOW TO SET A REALISTIC BUDGET TO BUILD YOUR HOUSE

It’s not easy to set a realistic budget to build your house.

The first and most important step in building a new home is to know what your budget is.  If you’re like most people and need to borrow to build, then getting pre-approval from your bank or lending institution should be your first priority. If you want to set a realistic budget to build your house, you need to keep in mind that you may need to cover existing rent payments while your house is being built as money will be being “drawn down” from the loan to pay the builder in stages.

Once you set a realistic budget figure that is to be used for the actual house build (assuming you already have your land), you need to take care not to exceed it.  You need to be realistic about costs, including potential issues that may not be obvious at the start (like hitting rock during excavation, or lengthy wet weather holding up the construction).  And depending on your block of land, there may be retaining works that need to be done prior to start of construction.  These things all need to be thought about.

It’s a good idea to build in a bit of a buffer and set the realistic  budget for these things.  It’s better to have something left over at the end rather than being in financial stress due to cutting things too fine.

Be realistic about what you actually need.

Do you really have to have 4 bedrooms and a media room?  If you’re a first home buyer, could a smaller house suit you for the short term?  Getting your foot on the property ladder with a more modest home is preferable than trying for the trophy home at the beginning and potentially making your lift a misery trying to work out how to pay for it.

Design choice is also an area where compromises can be made to keep within your budget.  You can always upgrade down the track when your finances are more secure and you’ve built up some equity in the home.  Laminate bench tops instead of stone, ceramic tiles instead of terrazzo, using “builders’ ranges” in appliances instead of top of the line.

It’s an exciting time designing a new home, but a bit of caution and restraint can make the process a lot less stressful.

Give Drake Home Consultants a call on 1300 711 985 or email us at enquiries@designapp.drakehomeconsultants.com.au and we’ll be happy to explain how our consulting service can help you achieve your new home dream.