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Thread: How much does it cost to build a house?

  1. #1
    Elite Member missbazilb's Avatar
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    Default How much does it cost to build a house?

    I know this is a totally random question, and it's obviously going to vary greatly from area to area, but I need to get a rough idea.

    The housing market in my city is completely out of control. I have the opportunity to purchase a piece of property in a highly desirable location that is already zoned for a duplex. The existing house will have to be torn down, and then we will build a duplex, and sell one side and live in the other.

    I don't even want to think about the initial outlay, because I'm already sick about it, but it is a great opportunity. So, has anyone had any experience with this?

    Say a duplex that is 2,500 square feet per side?

    Thoughts, advice, experiences?

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    A*O
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    Your best bet is to ask local building contractors. There are so many variables like method of construction, style, number of rooms, finish, etc etc.

    If you are building two dwellings and are prepared to take the financial plunge then I'd live in one and RENT the other so you retain ownership of the whole block instead of splitting it. I believe the rental market in Vancouver is very buoyant at the moment so you should be able to generate some useful income, plus the equity value which is shooting up at the moment? Just an idea.
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    Elite Member nwgirl's Avatar
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    In my area, you can expect to pay $100-$150 per sq foot for a custom home. That's with no bells and whistles.

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    Elite Member McJag's Avatar
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    My grandmother always said take whatever the estimate is-time or money-and double it. I have found that to be stangely accurate. So whatever the contractor says, keep it in mind.
    I didn't start out to collect diamonds, but somehow they just kept piling up.-Mae West

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    Elite Member Grimmlok's Avatar
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    about 300 indonesian child slaves.
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    Elite Member missbazilb's Avatar
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    Ah, if only I could get my hands on some child slaves...

    Spoke to our home inspector this morning and he said $160 psf. Does anyone have a spare half mill around that I can borrow for about 10 months?

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    Elite Member LynnieD's Avatar
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    We built our house 8 yrs ago and would never be able to build for that price ever again...though, housing market was totally different.

    Expect a LOT of little, dumb expenses. Like: extra outlets, wirings for cable, etc...you know, $50.00 here, $100.00 there....adds up!!!

    And don't skimp on some things like: good flooring!

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    Elite Member missbazilb's Avatar
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    How long did it take you to build LynnieD? The thought of doing this really does terrify me, because it does seem as though it will be endless amounts of work, not too mention developing a manner that will work to bully the trades effectively. If it wasn't such an opportunity to own something decent in this ridiculously overpriced city, I wouldn't even consider it at this point.

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    Elite Member sputnik's Avatar
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    ^^^^
    i've never done it but i know a lot of people that have and they all said that while it was a total pain in the ass, nerve-wracking, expensive and frustrating not to mention lengthy process, but ultimately totally worth it. and i can see why you would want to do it - buying a house in vancouver is near impossible. i'd say go for it but think about what a*o said and rent half, it would probably fetch a good revenue and you always have the possibility of selling in the future.
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    Hit By Ban Bus! pacific breeze's Avatar
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    There are quite a few rental units sitting empty on the market here because people have to charge such high rents to cover their mortgages that renters end up buying their own overpriced condo instead of renting. It's a definite risk.

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    Elite Member louiswinthorpe111's Avatar
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    In the midwest $100-$150 psf. Keep in mind, this is just the build, doesn't include lot cost, which can be $30-80,000 in the Midwest, depending on the lot.

    AO's renting idea is definately good, just for the tax benefits alone. Although, be sure you design it as a side by side with a zero lot line, and then you may be able to sell them off individually as condos in the future, if you choose. But this will depend on laws in Vancouver.

    If you are going to build, you can get construction loan from your bank, which is interest only, short term loan to pay for the costs of building, then once it's built, you can go into permanent financing.

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    A*O
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    Quote Originally Posted by pacific breeze View Post
    There are quite a few rental units sitting empty on the market here because people have to charge such high rents to cover their mortgages that renters end up buying their own overpriced condo instead of renting. It's a definite risk.
    Well this is where a wise landlord doesn't get greedy and pitches the rent at a level the market can support. Corporate lets are the best of all because the company pays the rent and the tenants are usually 'execs' who you can rely on to behave. We've had several corporate tenants and they have all be absolutely delightful.

    I would LOVE to build my own house and have things exactly as I want them (yeah, control freak). I'd leave the construction to the experts but I'd pick all the fixtures, fittings, decor, etc etc. Heaven. Unfortunately it would also result in a divorce so I have to dream.
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    Elite Member missbazilb's Avatar
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    Well, in this market, it's worth it to sell one half, especially for the neighbourhood.

    Just to give you an idea - we're looking at getting the property (before building) for $1,000,000. This is getting in on the ground floor and hopefully avoiding a bidding war, which would bump it up to about $1.2. This is for a house that will be torn down, sandwiched between two other lots that have already done the duplex thing. The lot is 33' by 120'. Add on the building cost of about $720,000 for the duplex, and we're in at $1,720,000.

    However, the market could support the sale of one side of the duplex at about $1.1 - $1.2. This means we'd get a half duplex with a mortgage of about $470,000, which in the area is a helluva deal.

    We'd have to borrow some money from my hubby's family, because we wouldn't be able to swing both the property down payment and the construction down payment, along with the required debt servicing for the property portion without some help. Hubby's dad thinks it's a great idea, so we'll probably sit down with them tomorrow night and really thrash everything out to see if it's something we should do.

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    A*O
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    What kind of rent would you get for such a property?
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    Elite Member missbazilb's Avatar
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    I just think that it will be too much to handle to rent the other half. I'm not a big fan of risk, and if the place were empty, we'd be looking at some pretty high mortgage payments. I'd much rather sell half and lower the mortgage for our share.

    Plus, as PB says, the rent would have to be ridiculously high to cover it, and the market may not be able to bear it.

    The market is crazy right now. We just spent two days crapping our pants trying to get a bid together and inspection done for a condo that we wanted. We bid $5,000 over the asking price, and removed all subjects.

    Someone else came in at $8,000 over with a certified cheque in hand for the deposit. Our agent wanted us to jump to $11,000 over asking, and I flat out refused. It went on the market on Sunday, with one 1hour open house, and sold today for $8,000 over asking. The people who outbid us did not do an inspection or view the strata minutes. Nutty stuff.

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