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How Much Do You Need to Spend Building Your Dream Home?

Team Jar
December 2, 2022
How Much Do You Need to Spend Building Your Dream Home?

Planning to build a home from scratch but unsure how much expense you should eye? Read below to know more.

Owning a home is everyone’s dream and a major financial goal. While an apartment, prefabricated or modular homes make the home-owning process much simpler, building a house from the ground up that suits your every need and fulfills your wishes is what almost everyone prefers. 

Building a home includes much due diligence and legal formalities, which can be exhaustive and tiring. Hence, an accurate estimate of the cost and detailed process of building a house can help you plan accordingly. But it can be challenging to plan when you don’t know how much it will cost to build your dream home.

If you plan to build your own home, this comprehensive guide will give you a fair idea of what you may expect.

Building a home includes two significant steps: acquiring the land in a good locality with every amenity available and building the house with the help of a decent constructor.

Buying the Land

Buying the land is the first step of building your dream home unless you have inherited it. To buy it, you must ensure the locality is decent and offers every amenity within a 1-2 kilometers range, especially primary facilities like markets, hospitals, and schools, among others.

But there are other documents that, as a land buyer, you must ensure are in order:

1. Title Deed

This document is the primary proof that you are the landowner. Ensure you have the original paperwork and get it certified by your trusted lawyer. If you purchase the land using a home loan, you may have to deposit the title deed to your bank or the lender until the loan is fully paid.

2. Encumbrance Certificate 

This certificate shows that the land has no pending legal dispute. Request an encumbrance certificate, preferably for the last 30 years.

3. Ownership Structure

If the land you buy has two or more owners in the document, ensure you have notarized no objection certificates from every one of them.

Building the home

1. Creating a Plot Layout/Blueprint

This is the first step to building a home. You may need help from a registered architect to make a blueprint of the house. It should comply with all the regulatory norms. A home typically includes rooms, a kitchen, staircase, garage, balcony, bathrooms, and a terrace.

The architect’s fee to make a blueprint varies based on the location. But on average, in India, an architect charges ₹15,000 up for a 1,000 sq. ft. home.

2. Getting Your Blueprint Approved by the Government Body

Bylaws for home construction differ state-wise. For instance, in West Bengal, every home must leave at least a 3ft gap on all sides of the home. To build a two-floor house in Delhi, you must have stilt parking. Failure to comply with all the strict regulatory norms, your application to get your blueprint approved may get rejected or delayed.

Furthermore, if your land is in an ecologically sensitive area, you must request construction approval from the local authority or Gram Panchayat that has jurisdiction over your property.

3. Civil Cost & Finishing Cost

Once the local governing body approves your blueprint, you must incur two major construction costs: civil and finishing costs.

Civil Cost

This includes raw material charges, shuttering and labor costs, and constructor fees. Your raw materials may consist of concrete, cement, brick, sand, RCC reinforced steel, etc. The cost of raw materials varies based on the quality you choose.

If you do not want to take so much hassle or are a working professional and lack time to oversee the house construction daily, you can hire an experienced contractor. They would be better equipped to make decisions in dire need. It makes the process much easier and hassle-free.

When it comes to cost, on average, the civil cost of house construction could be around ₹1,300/sq.ft. to ₹5,000/sq.ft. The price may vary based on the materials’ quality and the city you live in because labor cost is not fixed in India.

Also, when planning your budget, you must estimate 20% extra as miscellaneous and unforeseen expenses.

Finishing Cost

A concrete building doesn’t become a home until finishing work is done. This includes masonry, plumbing, electrical, painting, sanitary fighting, grill work, and interior design. In India, interior designing alone could cost at least 2 Lakhs upwards. The price is based on what elements and raw materials you prefer. 

The price could go much higher if you want to use branded items and high-end products. You must not forget the labor cost for these projects as well. Overall, constructors charge 8-10% of the total construction cost as their fee.

How to minimize home construction cost

1. Hire a Good Architect & Contractor

A good contractor goes a long way for initial construction work and future maintenance. Consult with multiple contractors and take quotes before finalizing one. Take inputs from your relatives and friends who recently had their house built.

Often, contractors have connections with plumbers, electricians, masons, grill makers, and even interior designers. This way you can ask for discounts for your finishing work as well.

2. Consider Pre-Engineered Buildings (PEBs)

PEBs have revolutionized building construction in India. PEBs are essentially galvanized iron steel structures made in factories and assembled on the construction site.

They are sturdy and have dramatically reduced building construction time and labor costs. After industrial construction, these are also increasingly being used in residential construction. Consider adopting such modern, innovative technology.

3. Avoid Last-Minute Changes

Last-minute changes can occur anytime during the final inspection or construction phase. However, it is advisable to avoid these as they can greatly increase house construction expenses and even impair overall structure quality.

4. Consider Life Cycle Cost

When selecting raw materials for your home, you’d find them in various qualities. Naturally, you’d want to choose more affordable options to save costs. But, consider the life cycle of those items. Hence, investing in the best quality products that can last up to 30-45 years is advisable.

5. Buy Smart & Source Locally

Source your material locally. It will reduce your transportation charge significantly. You can also buy them in bulk at wholesale price. But buying items locally doesn’t mean you should compromise on quality. For instance, opt for Ordinary Portland Cement (OPC) for structural work like building foundations, columns, and roofs.

Whereas Portland Pozzolana Cement (PPC) cement can be used for non-structural work, like plastering and tiling.

To wrap up!

Building your own home is an intimidating task to take on. It takes a lot of effort, due diligence, time rigorous cost planning, overseeing, and being aware of changing raw material and labor pricing. Home construction, including purchasing the land, could cost you 25 Lakh on wards.

Hence, take a home loan if you don’t want to face out-of-pocket costs. However, once it is done and you step into your dream home, all the hard work is worth it!