How to Build a House for under $250K | Steiner Homes | NWI (2024)

FAQs

How much house can I build for 250k? ›

Home Size and Plumbing

To keep the cost at or under $250,000, you're looking at about 2,000 square feet. For the installation of pipelines around your new house, you can expect to pay $12,000 or more.

Under $200,000

At $187 per square foot, you can build a house of up to 1,069 square feet. That's enough space for two bedrooms — three if they're on the small side — and two baths. Homes this size make good starter homes, downsizes, or investment properties.

If you follow the 2.5 times your income rule, you divide the cost of the home by 2.5 to determine how much money you need to earn annually to afford it. Based on this rule, you would need to earn $100,000 per year to comfortably purchase a $250,000 home.

Cheapest type of house to build per square foot. The cheapest homes to build cost $75 to $275 per square foot on average and include barn-style houses, modular homes, shipping container homes, and tiny houses.

The Framing

A home's framing is its skeleton. Because so much material and skilled labor is required, this is an incredibly expensive part of building a home. While framing may not be as expensive as the foundation or lot, it is typically more costly than other items.

The least expensive material to build a home out of usually includes concrete sheets, bamboo, and used materials. Of course, the least expensive material for your building project might vary based on your location due to availability, but these tend to be the cheapest options.

Typically, you will need to fund 15-20 percent of the total project cost yourself with cash. As the project cost increases, you may need to plan for a higher cash injection percentage. On a million-dollar project, for example, the bank will likely require a higher percentage from you, perhaps as much as 25-30 percent.

However, the average cost to build a new home ranges from $50 – $400 per square foot depending on the type of home you're building and the amenities you're planning to include. Building a bigger home also results in higher costs due to additional building materials and labor costs. But there's no hard and fast rule.

The IRC codes require that all homes must be built on a minimum of 320 square feet. The minimum square footage for a house is 120 square feet, and at least one room must be habitable. Habitable rooms meet other regulations, such as needing a closet and at least one window.

Foremost, it is possible to build a house for $50k, but you may have to cut some corners. To build a house for this price, you will probably need to have some building experience, so you know what corners to cut.

How much house can I afford to build? ›

Most financial advisors agree that people should spend no more than 28 percent of their gross monthly income on housing expenses, and no more than 36 percent on total debt. The 28/36 percent rule is a tried-and-true home affordability rule of thumb that establishes a baseline for what you can afford to pay every month.