A home is a very important place, and everyone wants their own home to be perfect. If you are considering building a home in an area of your choice, there are some things that you should know before you proceed. To make this easy to understand we are going to break down the costs.
Material Costs

This is one of the major costs that you will incur: the base material that is bricks, cement and other things are going to cost a lot, and so are wood and iron rods and other base material. Make sure that you are prepared for the cost. If you are buying these in a bulk, which you will you are entitled to a discount. The material that you will be using for the house is going to make a lot of difference to the overall cost. The better quality material you go for the more it is going to cost. Typically material costs will make up almost 25% of the total cost.

Labor costs

Building a house is a labor intensive procedure. You will need a lot of man power for things like hauling and carrying the materials to the destined place, mixing the materials, and then building the house. Therefore labor is a very important cost. When it comes to building a house, the cost of labor in the area in which the house is being built can play a very important role. If the cost of labor is low, the cost of building the house will be low and vice versa. Traditionally, labor costs will also make about 25% of your total cost. Since that is the exact quarter, if you get cheap labor you will be much better off.

Land Costs

This is again a very important cost, and this will make up for another quarter of the total cost. The land costs can be extremely variable and this is why when we talk about the average cost for building a house, we cannot generalize. You can get large tracts of land for extremely low rate in large states, but a much smaller piece of land can cost you much more when you are buying it in the city. The costs of land in the downtown will be different from the cost of land in the outskirts of the city. If you want to build a house in the popular area of the city, then it is going to cost a lot. Even your choice of the city is going to matter a lot because the main, popular cities have much higher property rates than those which are not that popular. If you are trying to keep the cost of building a house low, choose a piece of land that you can afford easily as it will ease up your finances a lot.

The profit of the builder

The builder is going to charge you a certain amount, and that is something that can’t be avoided unless you are building the house yourself. Typically, the builders profit will make almost 12.5%of the cost of total house. This is a rather large amount, but it can’t be helped because a builder is necessary to supervise the whole process.


The overheads will again cost you almost 12.5% of the total cost, and these include builder’s overheads and many other small details that go into building a house. The larger the builder you have the more people he will employ and this means that you will have a larger overhead. You should try to find medium sized builders that have a smaller profit margin, as that will definitely help you keep the costs low.

Having said that, building a house is going to cost you $80 to $110 per square foot. This cost included the labor and material costs. Since the other costs forms almost 50% of the total, per square foot cost of building a house can vary from $160 to $250.





Darren Urman became a professional writer 15 years ago, when he retired as a building contractor. Darren joined the THF team of writers in July, 2009. He enjoys cooking, writing, and traveling.

Leave a Comment