Steps in Building a House-How Much Should You Spend on Land?
Buying land is a very subjective process, and the cost of land varies greatly in different regions of the country.
One very important tip on buying land is to always keep the resale value in mind. I know that may not seem important to you, especially since selling is the farthest thing from your mind right now, but some day it may not be. Remember, resale value is always on the mind of your mortgage lender.
I recommend spending no more than 25 percent of your budget on the land. While this is not always possible, and gets harder to do every year, it is an excellent guideline.
If you have to spend more than that, something else has to give, and that will be the size and/or style of your dream house. Size and style determine building cost. (Size more than style.)
You’ll have to juggle hypothetical scenarios in the planning process until it all fits into your budget. In order to do this, you will have to know upfront approximately how much it costs to build a house.
The actual “cost to build” anywhere in the US is the most closely guarded secret in the industry, but here is how you can find out what housing costs in your area by going to my web site byoh.com and using the “Cost to Build Calculator” found on the “Getting Started” page.
Another method can be found on my Cost to Build a House.