My wife and I are somewhat new to the idea of home building but have been offered a great deal on some land (friends of ours who have been planning to subdivide their property). We've started to research our options, modular homes, construction loans, site prep and utility installation costs- and have been trying to budget out different scenarios.
We want to build a simple cottage/cabin as affordably as possible. Cost is a priority for sure, but we also don't want a large home for various reasons and have been thinking we'd be perfectly comfortable with ~800sqft.
I've been told by two separate people with experience (an excavator and a real estate agent) that it doesn't make sense to build a small house if we're also investing in site prep. I guess the argument is in terms of price per square foot being higher and resale value being lower on a small build? I don't really get it. I'm thinking everything is still cheaper on a smaller build overall- less materials, smaller foundation, etc. plus we don't want a big house. Is this short sighted thinking? Any thoughts or advice appreciated!
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If the local authorities don't have a problem with a smaller house, and it meets your needs .. .go for itl Yes, there can be made arguments about better costs per square foot if larger, but if one followed that reasoning they would end up with a hangar for an airship. Build just large enough to meet your needs. Less initial costs, mortgage, energy costs, maintenance, etc, etc. If you want to build something larger in later years, your first house might be for rental, or inlaws, .. or the best man-cave in the county.
Really depends if the house is an investment or you plan on riding it out.
For me I see the house as a consumable I will use throughout my life, much like a car, and eventually need replaced. Since I will be the one consuming most of it I will not benefit from building it to be of value to someone else.
There is not much marginal advantage for me to build larger so I am building a quite small house. Since I DIY and submitted no plans and can't get a C/O and likely cannot even get it insured, I do not think anyone with a conventional mortgage will be able to buy it, and if anyone does it will probably be someone like me with not a lot of money trying to get something as affordable as possible to survive in.
Therefore I built a small house. If I were a real estate professional, I would want a larger house, since the economies are better and there is higher demand.
Think carefully about what space you need. While the cost per square foot might be lower when increasing size to take the advantage of scale, it is still bigger and likely costs more to build. It may cost more to furnish if larger. Cost more to heat and cool. Cost more to maintain, and so on. At least that is how I look at it.
We built small and are still very happy with what we did 16 years ago. 472 square ft
I recommend checking the resale value for a smaller home and make sure you'll at least recover your costs if you ever intend to sell. I had to wait for the market value to rise and quickly sold to https://www.thepropertybuyingcompany.co.uk/, which helped me recover mine.
While smaller homes are less expensive in terms of materials, labor, and overall size, the cost of site prep (grading, excavation, utility hookups, foundation work, etc.) can be relatively fixed.
Other people love to spend your money. If this is for you, then build what you want and not what they tell you.
If this is for an investment then listen to the real estate folks.