5 Ways to Build a House on a Tight Budget (2024)

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I remember the days when we were sitting in our little suburban ranch home dreaming of building a house. There were many nights where I’d stay up late looking at passive solar home plans and ways to build on the cheap. I had Pinterest boards full of homestead and cabin ideas!

And then we actually built our home.

Now, you might be looking for actual home designs that are really cheap to build, or methods to use that keep costs low. That’s well and good, but here’s what I know now that I’ve actually built using both natural and conventional methods:

There is no one method that is THE cheapest.

It is entirely possible to build a home with natural materials for millions of dollars (like this cordwood home). It is also possible to build a very conventional house for little or even no money depending on how you source your materials. So rather than searching all over the internet for the magic bullet, here’s some actual advice to help you build as cheap as possible while still getting a great quality house at the end.

1. Build smaller.

The obvious first step to reducing your budget is to reduce your overall housing needs. Generally, the smaller the house, the fewer materials you need and therefore the less money you’ll spend. Along with that, smaller homes will require fewer resources to heat, cool, and maintain it over time.

But before you rush off and build a tiny house, you need to address what your housing needs actually are for your family. While tiny/small may be the best way to save money for many people, there are situations you have to address before you fall in love with small home plans. Click here to learn some critical points to evaluate whether or not tiny/small homes are right for you.

Beyond that, it is entirely possible to end up spending MORE on materials per square foot on a tiny house build than you would if you’d built slightly larger. Aim to strike a balance of materials to living space when planning your home.

2. Use as many reclaimed materials as possible.

Doing this not only keeps building materials out of the landfill, but it helps save you money as well. You can get some stunning, high-quality building materials if you find the right deals.

For example, one of our followers dismantled an old Sears kit home and salvaged the materials from it. These homes were sold between 1908 and 1940, and contain some beautiful and strong old-growth lumber. She and her husband took it down in exchange for all the lumber & beams, which they then used as the frame for their house. Between the lumber and the other various items they gathered (old tongue and groove, wood flooring, and bricks to name a few) she estimates that they saved around $10,000 on materials. You can see their project in progress here.

Be careful though. Not all reclaimed materials are safe for use and some could actually cost you money in the long run. Read more here to learn what to look for in your reclaimed materials before you use them.

3. Get as many materials and services as you can for cheap or free.

This goes along with number 2, but your cheap and free materials don’t have to be reused items. It is entirely possible to get brand new items at deep discounts. For example, we got four brand new high-efficiency windows still in their shrink wrap at a local builder’s surplus store. We paid roughly 30% of their retail price just because someone else had a mis-order!

Related: 7 Unconventional Ways Our Readers Saved Money on Building Supplies

You can also save huge amounts of money on services by simply finding the right people and ASKING. We hired our excavator after lots of friends and family referred him to us, and the relationship we formed with him easily saved us five figures. He’s been in excavation for decades, and was always willing to share his expertise with us whenever we had questions. Not only that, but because we kept coming back to him he was more than willing to work out deals with us.

4. Use a natural building technique.

Using a natural building technique is a great way to save money while also working in harmony with the earth instead of against it.

We built our house with cordwood masonry. Cordwood was the perfect fit for us because we have a LOT of Eastern red cedar on our property, which is a great wood for cordwood construction. In addition, cordwood plays well with our local climate and doesn’t require any additional finish work. A regular stud wall would have needed studs, sheathing, vapor barrier, insulation, and finish coverings like siding and drywall. Our cordwood walls, built within a post-and-beam frame, negated the need for much of that.

Careful though. As I stated earlier, just using a natural method doesn’t mean you will reduce your costs. Incorporating natural building methods along with other strategies, however, is a great way to save money. Here are some tips:

Natural Homebuilding and the Code

Cordwood for Beginners

FAQs Beginners Usually Ask About Cordwood

Cordwood Performance FAQs

FAQ’s About Our Cordwood House

What if cordwood isn’t your thing? Luckily, there are loads of great natural building techniques. Here are some to consider:

Strawbale

Cob

Earthbags

Earthship

There are pros and cons to any of these methods so do your research carefully!

5. DIY as much of your build as you can.

The more of the construction you can complete on your own the less you will ultimately pay out in labor and materials. This is an area where knowing your skills and your limits is a huge asset. Even more important is your ability to learn and adapt.

We both spent a lot of time learning how to complete tasks ourselves.We used our first home as a sort of “practice” house. It was an unfortunate looking foreclosure with great bones, but it needed a lot of work. Together, we gutted the kitchen and rebuilt it from scratch, ripped out parts of our old bathrooms to build new, fixed a cracked foundation, and removed old aluminum wiring to replace it with better and more code-compliant circuits.

Here’s a throwback to a time before we even knew our off-grid homestead was a possibility. This was how we learned back in 2010:

Doing a solid DIY job as a partnership is about half skill and half cooperation. If you’re planning to build a house with your spouse, you definitely need to check out this post before you start.

By far, the BEST way to build on the cheap is to have a PLAN.

No matter what kind of house you want to build, if you haven’t figured out everything from your living and building budgets to your insurability, materials cost to building code, you WILL spend way more money and time than you thought you would.

Sure, you need to get a real idea of what kind of house you want to build. Looking at plans in books or on Pinterest is honestly one of the most fun parts of homebuilding! BUT say you get your land and you set to building. Now what? Do you have a roadmap to help you navigate the nitty gritty of building your own house?

If not, and you’re serious about building your house, I highly suggest you take a look at our Owner-Builder Home Planner.

You can also subscribe below to get our free PDF quick-start guide to help you think about those “hidden” tasks that have to be completed when you’re building a house. Fill out the form below to get a copy:

We bought 16 acres of raw land and built an off-grid cordwood house from scratch! You can learn more about ithere.

If you haven’t already, go follow us onFacebook,Instagram, andPinterestfor more inspiration that doesn’t necessarily make it to the blog. Thanks for reading!

5 Ways to Build a House on a Tight Budget (2024)

FAQs

5 Ways to Build a House on a Tight Budget? ›

When it comes to budgeting, it's convenient to think in terms of hard and soft costs. Hard costs would be the cost to build the structure, including what you pay the builder. Soft costs would be what you pay for land, engineering, government permits, taxes, and anything else that isn't bricks and mortar.

What is the cheapest house construction method? ›

  1. Prefab Panels. A prefabricated or “prefab” panel can be a fabulous way to build your own home on a budget. ...
  2. Precast Concrete. While building with concrete can create a durable structure that's both fire-resistant and waterproof, it's also rather expensive. ...
  3. Shipping Containers. ...
  4. Reclaimed Wood. ...
  5. Bamboo. ...
  6. Bricks. ...
  7. Cob. ...
  8. Ecobricks.
Nov 8, 2022

How do you make a budget to build a house? ›

When it comes to budgeting, it's convenient to think in terms of hard and soft costs. Hard costs would be the cost to build the structure, including what you pay the builder. Soft costs would be what you pay for land, engineering, government permits, taxes, and anything else that isn't bricks and mortar.

What are the steps to build a simple house? ›

Home Building Process
  1. Decide On The Layout & Design Of Your Home. ...
  2. Prepare Property For Construction. ...
  3. Build The Frame Of The House. ...
  4. HVAC, Electrical, & Plumbing Installation. ...
  5. Roof & Exterior Siding. ...
  6. Insulation & Interior Drywall. ...
  7. Flooring & Fixtures. ...
  8. Landscaping & Final Touches.
Sep 30, 2022

How to build a cheap structure? ›

Using dirt-cheap building materials -- earth, sand, gravel, straw, recycled materials, etc. -- and eliminating expensive contractors and specialized equipment, the cost of construction can be slashed to a fraction of conventional housing costs.

Is brick cheaper than wood? ›

Wood is faster and more affordable to build with than brick. Wood houses are more susceptible to pest and mold issues than brick.

How to financially prepare to build a house? ›

The financial steps of building a home
  1. Set your new home construction budget. ...
  2. Choosing a new home builder. ...
  3. Learn about the new home construction permit process and insurance requirements. ...
  4. Understand how funds are released to the builder during construction. ...
  5. Understand how loan payments are made during construction.

How to keep costs down when building a house? ›

Value Engineering
  1. Reducing Square Footage. One way to dramatically reduce costs is to just reduce the square footage of the entire home. ...
  2. Choosing a Stock Design. ...
  3. Reducing Lineal Feet of Logs. ...
  4. Opt for a Simple Roof System. ...
  5. Use Drywall on Interior. ...
  6. More Modest Kitchen. ...
  7. Don't Take a Bath on Your Bath. ...
  8. Avoid Change Orders.

How much money do you really need to build a house? ›

The average cost to build a house is $203 per square foot. The cost of constructing a house is $153 per square foot. That's the cost of construction only, not including the cost of the land or builder's fees.

What are the 7 steps of construction? ›

The 7 Essential Stages of a Successful Construction Project
  • Project conception. Every construction project begins with an idea, and the idea or the conception behind a particular project requires thoughtful consideration. ...
  • Planning and design. ...
  • Preconstruction. ...
  • Procurement. ...
  • Construction. ...
  • Closeout. ...
  • Post-construction.
Jan 14, 2023

What is the first thing you need to build a house? ›

The first step in constructing your new home is building the foundation. This will require plumbing and electrical initial installation work before the concrete is laid. Luckily, it doesn't require many decisions. Your plumber and electrician will work to make sure everything is installed properly.

What are the 10 stages of building a house? ›

10 Steps to Building Your Own Home
  • Find a Location. ...
  • Obtain Permits. ...
  • Prep the Site and Your Finances. ...
  • Pour the Foundation. ...
  • Set Up Plumbing. ...
  • Assemble the Frame, Walls, and Roof. ...
  • Install Insulation, Complete Electric and Plumbing Installs. ...
  • Hang Drywall and Install Interior Fixtures and Trim.
Sep 27, 2022

What is the cheapest thing to build a house with? ›

In America, wood is a readily available and renewable resource, which makes it a cost-effective material for building. Wood is also easier to work with, which can save time and labor costs during the construction process. Wood can also be easily cut and shaped to fit the needs of the project.

What is the cheapest foundation for a house? ›

Concrete slab foundations are the least expensive of the house foundation types, ranging from $4,500-$21,000. They are impervious to termites and other insects. Considerations with concrete slabs are that they make plumbing and electrical systems less accessible and more expensive to repair.

How to build a tiny house cheaply? ›

Another way to keep costs low is to buy pre-fabricated kits or plans for tiny houses that come with all of the necessary components and instructions needed to complete the build. These kits usually cost less than buying all of the materials separately and they provide an easier building process as well.

What is the most affordable type of housing? ›

Prefabricated homes, container homes, and monolithic dome homes are just some of the most affordable new homes. Keep in mind that you'll need to add additional costs for land purchase, a foundation, taxes, transportation, and permits. Of course, you could always save and buy an existing fixer-upper home as well.

Why are barndominiums cheaper to build? ›

Traditional houses tend to take longer to build than barndominiums, resulting in higher labor costs. The construction process for traditional houses typically involves more intricate architectural details, varied materials, and complex designs.

Is it cheaper to build up or out? ›

In general, building up tends to be less costly than building out. When you factor in things like digging and pouring a new foundation, building out typically carries a higher price tag (though this isn't always true, and certainly depends on the size of the room and its purpose).

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