Not long ago a client told me they wanted to build a house and to save a little money they decided that instead of having the house completely finished upon move-in, they would leave portions of it unfinished and do the work themselves. I’ve heard this thought process before. And while there would have been a time when I might have thought it was a good idea, today I can honestly say it’s not a good idea. And there are three reasons why.
Second, you might never get around to doing it at all. I had another client who owned a home that had been built in the late ’60s. It was a four bedroom two story house that had a completely unfinished upstairs. The floor plan called for two bedrooms and one full bath. The studs were up, A/C ducts were in, and electricity had been dropped in all of the rooms. There was even a bath tub. But now, 50 years later the house remains unfinished. Fifty years of wear and tear on the house has made the option of finishing it out financially unreasonable. And the value of the house is severely reduced.
Third, you’re probably not going to save as much money as you think you will. Builders are able to build houses at a certain price because they get contractor prices on their supplies. As a home owner you don’t have those connections. On average you’ll probably spend more for the materials because you have to buy them “one off”; or in other words, in very small quantities. And if you can’t do it yourself you’ll need to hire someone else to do it. Their charge for coming in after the fact and finishing the project is generally going to cost you more than if you had just let the builder do the job in the first place while he was constructing the house. The thought process for the home buyer is that if they’re able to reduce the cost of the house by, say, $3000.00 and finish the room later, it’s a savings. My suggestion would be to increase your down payment by the same amount and have it finished to start with.
The thing to consider is what you’re actually saving by trying to do some of the work yourself. How much will it actually shave off the cost of the house? What does that mean in terms of your monthly payment? If all you’re saving is $20 or $30 a month it may not be worth it. And if you’re at the point where that $30 a month really makes a difference in your budget you may be buying too much house in the first place.
Once you’re in your new finished home you’ll be happy that you aren’t staring at a project demanding your attention every time you walk by it. After you’ve lived there awhile you may want to do upgrades or improvements. But that’s a different story. For now, enjoy your new home.
Now about that new leather sectional that would look great in the family room…