Home building decisions
Home building decisions, Step by Step
The whole process of homebuilding becomes easier if you know what decisions you need to take and when. If you are clear about your own priorities and preferences at each step, you can't go wrong.
Follow the simple steps shown below to know exactly how to plan your homebuilding according to your needs and the availability of funds.
Best of Luck!
STEP ONE
- Discuss your needs with your family.
- Consider your family/household size, present and future.
- How many rooms, bathrooms, storerooms, verandah, any other facility.
(i.e. Size, Purpose etc.)
All this will make budgeting and planning that much easier.
Example: Let's say you are clear you want a two bedroom flat with a small garden. For this, say, you require at least 1500 square feet (sq ft) of land, of which 750 sq ft is the built up area.
STEP TWO
Your two major cost components are land and construction costs.
A. Find out approximate cost of land in the area of your choice Rs. ______/sq ft x area required (In sq ft) = Rs______
B. Make an approximate construction cost estimate Rs_______/sq ft x built-up area (In sq ft) = Rs ______
Therefore, the total cost of your home would be (A+B)
Example: If the cost of the land you have identified is Rs 200 per sq ft, and you need 1500 sq ft, your cost is Rs 200 x 1500 sq ft = Rs 3,00,000 (A)
If the cost of construction with a base finish (given below) is Rs 450 per sq ft, then for a built-up area of 750 sq ft, your cost is Rs 450 x 750 sq ft = Rs 3,37,500 (B)
Total cost of your home is (A+B) i.e. Rs 3,00,000 + Rs 3,37,500 = Rs 6,37,500
What building your home would cost you in year 2008?
Type of finish | Cost per square feet | Description |
|---|---|---|
| Superior finish | Rs 650 to Rs 1000 | High quality flooring, electrical and sanitary fittings, paints, timber, kitchenware etc. |
| Medium finish | Rs 450 to Rs 650 | Medium quality flooring, electrical and sanitary fittings, paints, timber etc. |
| Basic finish | Rs 350 to Rs 450 | Ordinary quality of finishes such as a neat cement finish |
Construction cost varies with quality of interior finishes and fixtures. Cost projections shown above may increase by 8 to 10% per year. This table does not include cost of land.
STEP THREE
You can generate funds through: (see section on home loans)
C. Your own savings and
D. Borrowings
Therefore, total funds available would be C + D
Example : If you have savings of Es 1,00,000 (C) and you can organise a loan of Rs 4,00,000 (D), then total funds available for homebuilding is Rs 1,00,000 + Rs 4,00,000 = Rs 5,00,000
If the budget estimate, as in STEP TWO, is more than funds available, go to STEP FOUR. Else start planning for construction. In the two examples above in STEPS TWO and THREE, the budget estimate of Rs 6,37,500 is greater than Rs 5,00,000, which is the fund available to you. So you need to rework your estimate.
STEP FOUR
- Look for less expensive land further away from the city centre to reduce land cost.
- Reduce the built-up area. Reduce the size or number of rooms
- Ask your architect to design your house to allow phase-wise construction, so that you can build part of it now and add rooms later, when you have the funds.
- Reduce land requirement. Say, instead of 1000 sq ft on one floor, opt for two floors of 500 sq ft each. This will not only reduce your land requirement it will also save on your construction cost by 10 to 20%
Referring examples given in STEPS TWO & THREE, let's revise the estimate following the guidelines above:
Example:
Locate land where prices are, say, Rs 140 per sq ft instead of Rs 200 per sq ft instead of Rs 200 per sq ft. Reduce land area from 1500 sq ft to 1350 sq ft. So the total cost of land comes as follows:
Rs 140 x 1350 sq ft = Rs 1,89,000 (A)
Earlier it was coming to Rs 3,00,000
Reduce built-up area from 750 sq ft to 650 sq ft, for the present
Reduce cost finish marginally from Rs 450 per sq ft to Rs 425 per sq ft. This way, cost of construction becomes Rs 425 x 650 sq ft = Rs 2,76,250 (B)
Leave scope of addition for one more bedroom of 100 sq ft at a later stage.
Now the cost becomes
A+B = Rs 1,89,000 + Rs 2,76,250 = Rs 4,65,250
(This amount is within the funds available to you and also leaves you with some extra money for unplanned expenses.)
