These days there are a lot of options for people who want to build a new home. When considering your options, you might want to look into kit homes and on-your-lot builders—also known as custom home builders—if you want to save money and do some of the work yourself. While both approaches allow you to get more house for your money by building sweat equity, they are two very different approaches:
- Kit homes are the easy-to-build, DIY approach to homebuilding.
- Custom homes are the best option if you want to personalize nearly every aspect of your home.
Understanding the difference between them can help you decide which option is right for you. Let’s find out more about how to choose your dream home.
Kit homes can be considered “mail-order” homes because the parts are delivered to a manufacturer and stick-built on your property either by you or hired contractors. Most manufacturers offer a range of predesigned kits, and some allow a certain degree of customization, although this might be limited to finishes and fixtures.
Two top benefits that kit homes provide are:
- Affordability: They tend to be more affordable than hiring contractors to source all of the materials required to build the home.
- A variety of builds: From a work studio to a bungalow to a three-bedroom contemporary home, kit homes come in many shapes and sizes.
Kit homes have a long history in the U.S. According to an archivist from the University of Maryland, kit homes were very popular in the first half of the 20th century. Most recently, kit homes have become a popular item on the market with Amazon’s revival of the product.
How much does a kit home cost?
Just like any other stick-built home, prices for kit homes vary by floor plan. However, they tend to be considerably cheaper to build than traditional homes. Many manufacturers also offer the option of building the kit home in a climate-controlled environment, which can shorten the build time and labor costs.
The construction materials for kit homes are purchased in bulk and delivered to the factory, which also factors into lower costs. This impacts the overall price of the floor plan, which can range from $10-$60 per square foot. However, it is a good idea to talk to a contractor because some kits don’t come with important construction materials, such as drywall or interior elements. Speaking with a contractor can provide a more realistic estimate.
Although the cost of the kit home might look cheaper than other stick-built houses, don’t forget that labor costs are a major cost of the homebuilding process. In fact, the kits are close to only 25 percent of the total cost of the home once you factor in labor costs.
What are the pros of kit home builds?
Just like any other big financial decision, there is no right answer for everyone. Here are some important factors to consider when considering a kit home build.
The pros of purchasing a kit home include:
- Cost: As we have mentioned, kit homes tend to be cheaper than traditional home builds. Be sure to consider the cost of labor when creating a budget.
- Timely delivery: Kit home manufacturers can usually organize and deliver the entire kit within weeks.
- Fast construction: Because every piece of a kit home is precut and labeled with directions for assembly, build time tends to be quicker and more accurate.
- Customization: One of the major benefits of building a home from the ground up is incorporating the homeowner’s design preferences.
- Brand-new home: You know the exact condition of your home when you build it, and you can expect it to last a long time to be able to sell it later down the line.
What are the cons of kit home builds?
The cons of purchasing a kit home include:
- Limited delivery range: The majority of manufacturers limit their delivery range, so if you really like a home from a manufacturer in Colorado but live in Washington, you are likely to pay expensive delivery fees to receive the kit.
- Consider location: If you live in a rural area, kit homes are not likely to be cheaper than contractor-produced homes. On the other hand, if you live in a metropolitan area, a kit home will certainly be cheaper.
- Lack of standards: The kit home industry has very few industry-wide standards or Department of Housing and Urban Development regulations. This means that it is not necessary for all kits to come with the same types of material. This will require a good amount of research on your end.
What’s the bottom line?
For the avid DIYer with some building experience, kit homes might be the right fit. However, if you don’t have any experience, a kit home might be more work than you bargained for.
When you buy a kit home, unless you have found a builder who is willing to assemble it for you, you’re pretty much on your own. While kit homes are easier for homeowners to construct than traditionally built homes, you must still have some skills and the necessary tools to complete the job. You must also coordinate and work with local subcontractors, such as plumbers and electricians.
Kit homes require the same level of permitting that any other type of home does, so it’s up to you to understand building codes and the permitting process. This usually requires you to work with local regulators to ensure that all of the appropriate permits are in place before you do site work and construction.
If you already own a buildable lot, you can have a kit home shipped directly to it. However, if you need to purchase land, you must work with a Realtor to find a suitable lot.
If you already own land or are planning to purchase a lot, you can work with a local builder to construct your new home. Some builders offer a variety of stock plans that cannot be changed, floor plans that you can customize, full custom services, or some mix of these options. If you have a specific vision in mind for your dream home, an on-the-lot builder will be able to help you achieve it better than a kit home.
What is a custom home builder?
When it comes to building a home on your lot, you have the option of building with a custom home builder, which will allow you to select from a variety of plans that you can customize. Unlike kit homes, working with a custom home builder won’t allow you to build the home on your own.
The primary benefits of working with a custom home builder are:
- Customization: With the right builder, you can have input on every detail of the home to ensure you are purchasing your dream home.
- Quality builds: Custom home building is as much about quality materials and a high standard of procedures as it is about customization.
Builders also offer a range of options for the construction process. These include full turnkey services if you prefer a hands-off approach and programs that allow you to participate in the process to build equity. For example, when you work with Adair Homes, you can save money by taking on certain tasks, such as site development, landscaping, and final detailing.
How much does a custom home cost?
Much like kit homes, the price of a custom home varies based on the model. This can inform the materials used and the time it will take to build the home, which will also impact labor costs.
When comparing the cost of a custom home to homes on the market, a custom home can be considerably cheaper depending on the market. Because of market volatility, houses can increase rapidly while household incomes decrease, as most of 2021 has shown. Building a custom home can provide some stability that the housing market often can’t.
What are the pros of custom home builds?
One of the major benefits of partnering with a custom home builder is that you’re getting just that: a partner. From the design stage to the build, a custom home builder helps to ensure everything goes smoothly. However, there are a few things to consider before making your decision.
The pros of working with a custom home builder include:
- Less competition: As we mentioned, the housing market varies often, which can make finding an existing home in your price range difficult. The cost of building a home won’t be impacted by rising market prices.
- Customization and personalization: The No. 1 benefit of a custom home is the personal touch you can put on it. Rather than making the adjustment to an existing home, your priority options are part of the base design of your custom home.
- Lower maintenance costs: Because everything is new, you won’t have to worry about things suddenly breaking. Plus, you are likely to have a warranty with the company you choose to build with.
- Higher energy efficiency: The energy-efficiency standards for newer building materials are much higher than in previous decades. This includes everything from the windows to the HVAC systems, which can drastically reduce energy bills.
What are the cons of custom home builds?
The cons of working with a custom home builder include:
- Time: As you can imagine, building a custom home from the ground up can take more time than a kit home. It usually takes more time than it would take to close on an existing home as well.
- Expense: New construction can cost more than resales in certain situations, such as a market with higher home prices. However, the resale value of a new home is more than an older home in the same location, putting more equity value in a custom home.
- Potential for underdeveloped land: Depending on your land, the building site might require landscaping, such as clearing away trees or developing roads or structures to ensure the home can connect to utility providers.
- Finding land: It can be difficult to find the right price for land that is closer to neighbors, culture, and other amenities. However, if you want to live a bit farther away from civilization for peace and quiet, this is a great option for you!
What’s the bottom line?
Customization has its obvious advantages. You get to live in the home based on your exact specifications. While the cost of labor can be expensive, the quality of materials and energy-efficient standards are lower, and the lifetime of your house is higher, making it a great investment.
When it comes to the permitting process, many on-your-lot builders will handle the process for you, but again, if you want to save money, you can do much of that work yourself.
When you work with an on-your-lot builder, you benefit from years of experience, well-established relationships with subcontractors, and knowledge of local regulations. If you want to do some of the work yourself, make sure the builder you select will allow you to participate in the process.
Which Option Is Right for You?
While kit homes are an intriguing option, the truth is, they are not right for everybody. If you want to be involved in the construction of your new home but don’t want to do it all alone, consider working with Adair Homes. Our unique program allows you to get the most home for your money, and you have the freedom to customize the floor plan and features to match your lifestyle. Get in touch today to get started.