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Cost to Build – Surprise! Hidden Costs to Improve Land Prior to Building Your Home


It’s easy to overlook things when preparing to build a home. The cost of land improvements (utilities) is a good example of that. Land owners are often shocked to find out how much money is needed just to ready their lot for building. Land purchasers should take stock.


Buying a parcel of land to build on requires a bit of homework to avoid unnecessary or unwanted fees. Sometimes it can still be a shot in the dark.


2000 and Counting …


Some two years ago I had people in my office who had a dilemma. They had spent $85,000 for their parcel of land to build on and it didn’t have any access to utilities. Okay, not the end of the world in most cases but, imagine this: they had already drilled a 2000 foot well and still no water!


They knew the area was hit and miss as far as well depths but they figured they would chance it. How would that affect you? Probably not your best strategy unless you’re willing to pay the extra money to gain other advantages that you may greatly value.


Water, Power & Sewer


Livability and resale values are dependent on the three main services of water, power, and sewer. They can be provided by the local government or they can be independently accessed.


It’s easy to figure the cost when provided by the local government agencies and rather nebulous when you go looking for them yourself! And, as far as an overall homebuilding budget goes, you can’t afford to estimate this cost too low. You can easily spend upwards of 5-10{7101d2215a6bd446fa679c57b3b56c91409a17080c01dc910257a9924d5d9b54} (or more!) of your building budget on self-provided utilities.


Let’s break it down:

  • Water: What would you do in the above scenario? Drill deeper? Drill another well? Sell the lot? Who would buy it now? Certainly a situation you would want to avoid.
  • Power: Another example came with clients who ended up having to spend $80,000 just to bring in power and power poles to their land. This was way more than they imagined when they purchased the land years before.
  • Sewer: If your land is not on the city sewage system you will need to install a septic system. Normally this is not too big of a problem but in certain areas, the system needs to be specifically engineered due to soil percolation problems. This can increase the usual cost by five times or more!

Fore-warned is Fore-armed


No one likes to be the barer of bad news but it is critical that you do your homework before you purchase your building lot. If you own already, thoroughly assess your situation before you get too far in your planning.


Sometimes it’s better to purchase your second choice in land or sell the land you have if it turns out that you can’t build the home you want. Do your homework … make some calls. You’ll be glad you did. And you might even thank me later! 


Source by Mel Inglima