How To Save On The Cost Of Building A New Addition

On average, it costs $25,000-60,000. to build a house addition. However, many homeowners end up spending over $100,000 for an addition that has a complex design, and includes either a bathroom, or a kitchen.

Because there is so much money at stake, it is important to carefully plan your remodeling budget, and avoid making costly mistakes.

In this guide, we will share expert tips on how to build a quality house addition, without breaking your bank.

1. How to save money during the construction phase

If you think outside the box, there are a number of ways you may be able to significantly reduce the total cost of building an addition.

1. Add a room within the existing footprint of your house.

For example, adding the extra room(s) in the basement can save you 25-50% of the cost compared to building an addition on the first or second floor of your house. Another possibility is to finish an attic.

2. Build a stand alone addition outside of the house

For example, if you need a home office, artist studio, sun room, etc, you can consider building it as a stand alone structure. This will be a lot cheaper than building an attached addition, as there are prefabricated structures/sheds available in a wide range of designs and sizes, that can be purchased at a fraction of the cost. You can get a beautiful, functional shed for as little as $10,000-15,000

3. DIY the finish work

Depending on your level of comfort and DIY skills, you may want to consider doing some or all of the finish work yourself. Painting rooms, laying tile, installing new windows and cabinets are all examples of projects that handy homeowners often do themselves. This can save you at least a good few thousand dollars!

Costly Planning and Construction Pitfalls to Avoid

Because building an addition is a such a complex undertaking, there are numerous things that may come up that you had not initially anticipated. Here are a few major ones you should avoid right from the start:

1. Neglecting to consult an architect

Many homeowners, especially those on a tight budget, try to save time and money by skipping out on getting a consultation from a professional architect and go straight to the builder. This is a bad idea for a few reasons:

– An architect will be able to anticipate design and structural problems that a builder may miss, and offer creative solutions. Otherwise, you may find out that there is a problem executing your brilliant design idea, half way through the project. At that point, you may not be able to easily fix it, or it will cost you dearly.

– A good architect will help you design an addition in a way that will seamlessly connect it to the rest of your home, without compromising comfort and layout. While this may not seem so important to you, it may become an issue if you ever choose to sell your home. Most prospective buyers prefer additions that feel like a true part of the original home, rather than an awkwardly constructed add on. This may impact the final sale price, and your ability to sell the house quickly.

– An architect can take your ideas and greatly improve them, helping you create your dream home. Most GCs and homeowners simply don’t have the vision and design skills necessary to create a high quality design.

2. Failing to abide by zoning laws and pull building permits

Don’t make the mistake of thinking that just because you want to build an addition, you are actually legally allowed to do so. Many towns have very strict regulations, zoning laws and set back requirements about what can be built, depending on the size and location of a particular house lot. Perhaps your house is standing on water conservation land, and you are actually not allowed to build at all, but you had no idea about it!

There are too many horror stories of people doing home additions without the building inspector’s approval and then having to tear them down later:( Avoid this painful and costly situation by finding out exactly what you are allowed to build and pulling all necessary permits.

If you are planning to buy a house with the intention to expand it, make sure the town will allow you to do so, before you lock yourself into a legally binding agreement with the seller.

3. Hiring cheap contractors

Its no secret that professional contractor labor is expensive. Many homeowners try to save money by hiring “handymen”, who are able to offer dirt cheap rates, because they don’t have insurance and workman compensation.

Without getting into the integrity of these “businesses”, hiring such a company puts you at risk of getting low quality work that will not be up to building, plumbing, electric codes, etc.

In addition to the fact that this may not be safe for you and your family, there is a good chance that you will have to re-do their mess, and will end up paying more in the end. Unless you know and trust the person you are planning to hire, we recommend hiring a professional, bonded and insured contractor who can produce at least 3 positive references.

3. Not having an official contract

One of the best ways to protect yourself against many hidden and unexpected costs is to sign a fixed-cost contract with the builder and other contractors you will be hiring. A contract that will protect you should include the following:

– A firm price that you have agreed to in the beginning
– A detailed scope of work (every task should be itemized)
– A clear change order policy

Without this contract you put yourself at risk of running into unexpected expenses that you did not budget for. For example, over the course of the project, the price of materials may go up and your contractor will demand more money. This happens often, as material prices are not fixed and can often go up unexpectedly, sometimes by as much as 5-8%.

Another possibility is that over the course of the remodel, your contractor may slam you with additional unforeseen work that must be completed in order to proceed, adding as much as 10-15% to the initial cost.

3. Plan to pay higher insurance premiums and taxes

Once you finish your addition, you will incur permanent increases in your home insurance premiums and property taxes. For example, you build a large size addition, you insurance may jump as much as 50%. Similarly, because you now have more living space, you will need to pay higher taxes. There are various factors that go into recalculating your new tax rate, but it can range from 10 to as much as 45% more than what you used to pay.