How To Budget For A New Custom Home Build in San Diego
If you’re even remotely considering building a new home in San Diego, one of the big questions you’re going to ask yourself is: How much does it cost to build a new home? This is a great question to consider as you try to navigate if building a new home is right for you.
Creating a budget for a luxury custom home is very similar to purchasing an existing home. What complicates the process is the number of variables in your control when building the home yourself. Because of this, your sense of responsibility is heightened and you will need expert guidance to ensure a successful and cost-effective build. At Buildable, the first thing we’ll do is get an idea of your requirements and provide a broad idea of how to divide your budget between land and the build. In general, there are a few high-level answers when determining how much it costs to build a home and how to allocate your budget.
Try our Land/Build calculator and we can send you an estimate.
How much should I budget on a lot (land)?
In Southern California, we advise that your land budget is somewhere between 25% and 40% of the all-in budget, with the remainder allocated toward permits, improvements, design, and the build itself. However, the allocations come down to the priority that you place on location versus home amenities, both of which can be adjusted based on your needs and preferences. Anything is possible and we’re here to discuss every variable with you.
However, if you have a budget over $2M or you’re looking to live in a top of the market area, we suggest allocating a higher amount to the land purchase. The truth is, building costs the same no matter where you build — it just comes down to the amenities you want in your home.
How much does it cost to design a home?
Typically, this phase takes only a small percentage of your all-in budget. There are many ways to accomplish what’s needed to design your home. Here’s what you need to know when you’re choosing how to proceed.
Architect:
It’s important to work with an architect that’s adept at the particular aesthetic style you desire. Design isn’t one-size-fits-all, which is why Buildable’s model integrates numerous architect partners who will meet the homebuyer's needs. An architect can typically cost around 5-15% of your overall budget.
Designer or Draftsman:
For simple projects, working with a designer or draftsman can be a cost-effective approach. At Buildable, we can help advise you on floor plans and designs that fit your needs. Once the floor plan has been developed, the designer or draftsman can implement the vision that we develop. Aesthetically, we can create an exterior look using existing homes, architectural influences, or even Pinterest as inspiration. Once these plans are defined, we work directly with your structural engineer to ensure that everything is designed to minimize costs. A designer or draftsman can typically cost around 2-5% of your overall budget.
How much does it cost to build a custom home?
There are a lot of variables in the build that will impact its ultimate cost. Buildable makes decision-making easier by having a set of packages to choose from — cutting down on the number of individual choices you have to make during the process. We start by working with the number you’re comfortable with — your “all-in” budget. With this number, we will work backward and create the land allocation, then the overall desired home size by square footage and your must-have amenities. Throughout this process, we will provide you with information on ways to make trade-offs in the budget and guide you on the best things you can do to make the build more cost-effective. Here are a few examples of those trade-offs:
Once a level of expectation for our clients is determined, we’re able to provide a tight cost range for the project. But, again, this will be based on the level of features and the complexity of the build.
How do I finance a custom home build in San Diego?
The custom home building process is unfamiliar to most people, and many are left wondering, how do I finance a custom home build? Well, to understand that, the first thing you must recognize is that you cannot build a home through a mortgage — rather, you need a construction loan.
The good news is that the construction loan process is almost identical to the traditional mortgage process. The primary difference between the two is that the builder has additional requirements when you get a construction loan. However, when you work with the team at Buildable, this is a negligible difference to you because we handle everything on the builders’ end.
Learn more in our article: How To Finance A Lot & New Home Build
At Buildable, we can create a personalized, quality home starting at around $1M. Our streamlined process cuts out excess costs and we can manage the entire experience for you. We would love to talk about your vision, so we invite you to schedule a consultation or try our land/build calculator.
