It is only natural that when you are considering building a new dream home, large addition or major renovation to your existing home, that the first question you ask yourself is, “How much will this investment cost me?” In general, such a question is hard to answer in advance. It can, however, present a necessary condition for proceeding and taking the first step—hiring an architect /home designer.
Crucial Investment Cost Factors
What you certainly need is some general understanding of how investment costs will determine what you can build within a given budget. These costs depend on numerous variables. To clarify, we will mention a major ones.
Sitework
The level of site preparation required and the ease of accessibility to the building site affect the final costs. For instance, if the project site is a sloped lot, on a cliff or has limited access, or if a stormwater management system is required—the project expenses will rise accordingly.
GroundWork and Project size
Before you can build a new home, the site has to be cleared, graded, and have the proper utilities installed. Removing any trees that might be on the way won’t come cheap either.
Furthermore, if the house you are building or renovating requires major groundwork, the excavation, stormwater management, concrete work, and waterproofing are costly.
This is where the size doesn’t matter. When you are building a small house, the cost spreads out throughout the square footage. I built a very large luxury house without basement and the cost of construction was just over $180/ sq.ft. where as renovation might cost over $300/ sq.ft.
The quality of Finishing
The kitchen and bathrooms are among the most important areas of the house that people spend their money on. The floor finishings, exterior facade, and mechanical system have another major impact on the cost/ value of the house as well.
Including an attic or a basement in your project is a good idea, as sooner or later everyone needs some extra storage space. If you want them fully finished like the rest of the living space, get ready to invest more.
Also, stone or solid-surface countertops always cost more than laminate. There are range of different quality kitchen cabinets to choose from. These decision making can be done at the design stage with the help of your interior designer. Remember, getting advice from the builder/ contractor in advance won’t help you. They know what and how to build. Your design team is the one can give you suggestions to choose the right material to fit your budget and investment.
While high-quality materials raise the initial price, it’s good to remember that their value remains quite stable and durable over the years. In other words, if you find yourself selling your property, the universal quality will help make the transaction more fluid.
Appliances
Appliances are a major investment within any project that includes a kitchen. Some homeowners spend as much as $20,000 on one premium appliance, while others pay less on their entire apparatus package.
Features and Amenities
It’s evident that a 3-car heated garage with a lift will costs a lot more than an unheated, simple 2-car garage. Pool and jacuzzi adds value and cost to the project. Home automation systems also require far more than manual light switches.
Design Complexity
If you want the design of your new home to include customized or crafted elements, like the extended size of doors and windows, and double-height volumes, expect significantly increased construction cost. The modern design features simplified forms and fewer decorative motives. But a complicated roofline, with multiple trusses combined together, will certainly increase the price.
Flat roof or shed roof might add slightly to the cost of the construction, but the value of beauty can bear more worth than the cost.
Contractor Availability
Before you start with the project, it’s good to have some insight into the local contractor scene. Do regional contractors and sub-contractors have a backlog? When it comes to estimating investment cost and risk, a subcontractor’s backlog can provide valuable insights, as one of the critical indicators of a successful workflow. Otherwise, you can be left guessing if a contractor struggles to meet schedule commitments, or is at a higher risk to default.
Investment Cost Guidelines
While explaining the impact of all potential costs, we often use the analogy of purchasing a new car. There are $25,000 cars on the market, as well as $125,000 cars. What they have in common, above all, is four wheels, the number of passengers, more or less the same trunk space. Also, both will get you to your destination in about the same amount of time. The difference is in the design, beauty, power, strength, and all the fine extra features such as metallic paint, rear-view cameras, heated seats, and so on.
A highly practical person will look into the features first, and expect a home that satisfies the function, above all. But you are a type who finds a purpose in aesthetics, and your priorities are focused on benefits, then you’ll probably be drawn to premium options when you build or renovate a home.
Each project presents a unique set of problems and solutions. For that reason, it’s very challenging to develop an accurate construction cost estimation before an architect has prepared design studies. However, you can get a sense of construction costs based upon the portfolio and data from our completed residential projects.
Therefore, as a starting point, we have created a basic budgeting chart regarding the project size. There are three proposed tiers of finishes and features to serve as guidelines. Moreover, these figures describe the standard construction budget ranges for custom residential projects in urban/suburban areas of large Canadian cities.
| House Quality | Cost Per SF |
|---|---|
| STANDARD | $250 |
| PREMIUM | $380 |
| DELUXE | $500 and up |
| PROJECT SIZE | STANDARD TIER | PREMIUM TIER | DELUXE TIER |
|---|---|---|---|
| 1,500 SF | $375,000 | $570,000 | $750,000+ |
| 3,000 SF | $750,000 | $1,140,000 | $1,500,000+ |
| 5,000 SF | $1,250,000 | $1,900,000 | $2,500,000+ |
| 7,500 SF | $1,875,000 | $2,850,000 | $3,750,000+ |
STANDARD INVESTMENT COST TIER INCLUDES:
- MDF painted interior doors
- Double-glazed vinyl-clad wood architectural windows and doors
- 2 ¼” wide stained hardwood flooring in living areas; also ceramic or porcelain tile flooring in mudroom and bathrooms
- Stock painted kitchen and bath cabinets
- Granite or solid surface countertops
- Stucco, wood or cement board siding exterior finish
- 30-year architectural asphalt shingle roof, together with aluminum K gutters, and downspouts
- Master bathroom with double vanity, toilet, and shower
- Conventional heating and cooling system
PREMIUM INVESTMENT COST INCLUDES:
- Solid core painted wood interior doors
- Double-glazed metal-clad or wood architectural windows and doors
- 4” wide stained hardwood flooring in living areas; ceramic or porcelain tile flooring in mudroom and bathrooms
- Semi-stock painted kitchen and bath cabinets
- Granite or solid surface countertops
- Stucco, wood or cement-board exterior siding together with rainscreen installation
- 40-year architectural asphalt shingle roof with standing seam metal
- accents; aluminum half-round gutters and downspouts
- Master bathroom with double vanity, separate tub and shower enclosures, electric mat heated tile floor
- Conventional heating and cooling system with air filtration and humidity control
- Stone patio for outdoor seating/dining
DELUXE INVESTMENT COST INCLUDES:
- Solid core stain-grade wood interior doors together with glass lights
- Wood-clad cathedral ceiling with exposed wood trusses in the family room
- A mix of stone and wide-plank wood flooring in living areas; also luxury ceramic or porcelain tile flooring in mudroom and bathrooms
- Double-glazed metal-clad or wood architectural windows and doors; also large expanses of glass
- Custom stained or painted cabinets with integrated appliances
- Built-in outdoor kitchen with grill
- Custom master closet fit-out
- Stone, marble or solid surface countertops
- Stucco, wood or cement-board exterior siding together with a rainscreen installation
- Brick or stone exterior
- Cedar shingle or slate roofing; copper gutters and downspouts
- Master bathroom with individual vanities, separate tub, and glass-lined shower enclosure, together with luxury tile, radiant heated tile or stone floor
- Luxury plumbing fixtures and faucets; thermostatic controls
- Heating and cooling system with air filtration, also humidity control
- Geothermal wells for energy-efficient heating and cooling system with energy recovery ventilators
- Emergency generator
- Stone patio for outdoor seating/dining with firepit
- Home automation system linked to the smartphone
- An outdoor recreational facility such as a pool or sport court
How We Help With Your Initial Investment Cost Estimations
Hopefully, this guide sheds dome light on an initial forecast of your prospective construction budget. As soon as we’re hired, we will closely collaborate with you. Above all, we’ll explore the relationship possibilities between the project scope and the available budget and research all possible solutions. We also collaborate in monitoring the budget, all the way throughout the design and documentation process.
By creating an in-house estimation and design/construction schedule during the initial phase of a project, we also establish control before spending too much time on the design. Once you approve the design studies, we engage a specialist to perform a more extensive preliminary estimate to align with the initial budget assumptions.
On larger projects, we often keep a consecutive design development estimate, revisiting subsequently as the work progresses. Major thresholds include wall and roof assemblies and the structural, mechanical, and electrical systems. These estimates at various milestones will provide you with the construction budget information you need, helping to make better, more confident decisions.
That’s Not All
This information is intended to be used as an initial guide. Its purpose is to provide you general pieces of information, but you should never forget that every property and every client are unique. Each feature has its own value, so the way it affects the construction budget changes accordingly.
In other words, don’t fall into a trap to assume that these initial square foot figures represent your entire investment price. In fact, these are often topped with architectural and engineering fees and landscape costs. Along comes interior designer, followed by various soft costs.
For More Information on Investment Cost
We offer our clients surveilance and control over their project scope and budget. Keeping the proper balance throughout the entire project duration brings happier, more gratified clients. So, are you about to embark on a new dream home, substantial addition, or renovation enterprise? Then start by booking a consultation with us for helpful and informative advice.
We will meet with you, hear what you have to say, discuss your options, and provide a report to get you started on the right track. Our range of service covers everything from building permit drawings, to construction consultation and project management.
Soon you will discover that correct information and proper knowledge bear the highest long-term value.
By Aryo Falakrou (My Home Designer)