Building a Luxury Home within Budget: Ways to Get a Better Return on Your Dream Home
There's no getting around it: quality homes are expensive. Even those fully immersed in the luxury lifestyle may feel compelled to create a budget for their luxury home build lest they incur the never ending expenses of a Winchester mansion.
Building a luxury home can be complex. It's easy to be surprised by hidden costs once you begin the process. And costs can vary widely according to all kinds of factors, especially for custom homes.
If you're considering building a luxury home in Asheville, NC, but are concerned about staying on budget, we can help. Let's identify ways you can build their dream home cost-effectively—and still get a good return on your investment when it's time to resell it.
Here is the information you need to budget your home build, avoid incurring additional costs, and prepare for the expense of certain items.
What Factors into the Cost of Building a Luxury Home?
From the property you purchase to the home design to the luxury finishes you've always dreamed of, many factors can drive up the cost of building a luxury home—if you let them.
To stay on budget, it's important to understand which factors influence home building expenses the most. Then, you will be able to prioritize which factors mean the most to you, and where to dedicate your budget.
The big-picture factors that most influence the cost to build a luxury home are:
- Property location – region, precise location, terrain
- Home design – size, shape, style/type
- Home finishes – interior, exterior, quality of materials
- Luxury amenities and features – custom features, outdoor elements, technology
- Mechanical features – HVAC, plumbing, electrical
Read more: How Much Does It Cost to Build a Luxury Home Near Asheville, NC?
What Choices Make a Custom Home More Expensive?
Considering the factors above, what particular choices do luxury home builders often make that immediately drive up the costs of construction?
Losing sight of the big picture
For one, it's easy to get lost in the details of fixtures and finishes and forget the big picture. Much of the cost of building a custom home comes from the construction of the home. In 2021, the world saw lumber prices skyrocket, which severely hampered home construction.
Bigger homes on larger foundations are bound to be more expensive, just from the sheer volume of materials needed and the size of the construction crew hard at work. Keep that top of mind during your entire planning process.
Choosing the home site
In addition, not all land is created equal. Here, in the mountains of Western North Carolina, it's easy to find several ecosystems on a single acre of land. Where you choose to build will influence where a septic can be placed or how much pipe you need to connect to city sewers.
The slope of the land will determine whether you need to call in (and pay for) a geotechnical engineer per Buncombe County's slope ordinances. And your site may call for additional construction needs, such as graded driveways, stormwater detention, or retaining walls, which are expensive to build and to maintain.
Every single feature of your custom luxury home has the potential to be upgraded (and thus upcharged) from the standard construction materials typically used. That means that every time you choose more elaborate millwork or upgrade your drywall from a level 2 to a level 5, you're adding costs to your bottom line.
As the KGA Studio Architects note, cabinets alone "can cost anywhere from $20K for the basics to over $100K for top of the line custom cabinetry." It's always best to prioritize your options and focus on the features that are most important to you.
No matter how well you've planned and budgeted, it's always possible for surprise costs to blow your budget when building a house. And some of those surprises may not even be related to the construction process. For instance, when building a home, you have to pay closing costs and utility fees similar to when you buy a resale home.
Not all builders are willing to pay for those like some sellers do. In addition, new homes are built empty. Which means you have to purchase all the appliances, blinds, and window coverings. And new construction homes don't have established landscaping like existing homes. All of this should be factored into your budget as well as possible.
What You Can do to Reduce Costs and Build a Luxury Home Cost-effectively
We understand that you don't want to have to sacrifice everything you love about your luxury home just to stay within your construction budget. Luckily, there are many smart, cost-saving measures that can be taken without cutting corners unnecessarily.
Here's how to build a luxury home for less by reducing other costs:
Set a realistic budget and stick to it.
The most crucial aspect of any house build is the budget. Even if "money is no object," you want to think about the resale opportunities for the home down the line. It's common advice not to buy the most expensive house on the block. The corollary is not to build the most expensive house in the neighborhood.
The first rule of determining the budget is sticking to the essentials. If you cave and begin to splurge, you’ll end up busting your bank account. Instead, sit down and create a strict budget with the help of your contractor. Use any extra funds you have to create a contingency fund for any unforeseen costs that may pop up during the build or at closing.
Know where to purchase land.
There are many factors that may influence your land purchase decision, including evolving market conditions, acreage, location, and property-specific development conditions. Are you more interested in finding the perfect location for a multi-generational home than future resale value? Is acreage for horses more important than luxury appointments?
Once you find the property you want, how do you know you're getting a good price? Well, there’s no hard and fast rule for how much you should spend on land when building a house.
However, you don’t want to pay so much for land that you can’t build the house you want. And you don’t want to skimp on location just to build a luxury home that’s out of scale with your neighborhood. The general rule of thumb is to budget 20–25% of the finished house value on the land you’re buying, and no more than 33%.
Understand how to build.
There can be a steep learning curve to learning all the nuts and bolts of home construction. However, understanding the big-picture concepts of "how to build" can help you save costs.
For instance, the terrain of a property impacts the cost to build on that land. Steep slope ordinances and certain soil types can add a variety of additional costs and may require the services of additional professionals, such as structural and geotechnical engineers.
Make design decisions that can reduce costs.
Did you know that some home designs are more expensive than others? Sure, once you think about it, it makes sense. Obviously, the size and footprint of the home will influence its cost to build. And a home with a large foundation, particularly if you add a basement, will be more expensive than a home that builds up instead of out.
In addition, the shape and style of the home can also affect its cost. Home styles with more ornate finishes, like Queen Anne or Classical-style homes, make a home more expensive to build. Odd shapes also affect overall cost. As they say, "The more corners, the more expensive."
Choose amenities, features, and finishes deliberately.
The amenities and features you choose for your home—inside and out—as well as the size and quality of each, will cause your home cost to tick upward. In addition, the quality of materials you choose for your finishes can add up.
As you're budgeting for your luxury home build, consider which standard construction materials you are ready to use and which you'd like to upgrade.
Common features that can drive up a home's cost to build include doors, windows, roofing, flooring, and decorative details. Outdoor home elements, such as swimming pools, outdoor kitchens, and large decks can also be expensive to both build and maintain.
Are You Ready to Build the Luxury Home of Your Dreams?
Building a luxury home is an expensive and time-consuming process. But in the end, you won't believe how good it feels to live in your perfect home.
By understanding the factors that influence cost, the choices that make a home build more expensive, and finally, things you can do to reduce your costs, you can be sure that your biggest expenses are the ones that will be most meaningful to you.
We're certain that you will love owning a finished home built just the way you like it!
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Build Your Luxury Home Today with Walnut Cove Realty!
For more than 10 years, Walnut Cove Realty has been a trusted and valued partner for those seeking or selling luxury properties in Western North Carolina. With a wealth of industry experience, the trusted real estate sales team at Walnut Cove Realty has first-hand knowledge about each home, homesite, and the distinctive lifestyle at The Cliffs at Walnut Cove because several members of the team are not only members but live in the community. In 2021, Walnut Cove Realty participated in 108 (90%) of the 120 real estate transactions in The Cliffs at Walnut Cove for a record volume of $114.2M.
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