How much will your new house cost and can you afford it?
This is often as far as many new home build projects get! You must estimate an accurate cost for constructing the house (taking account of all the costs, see: Have you allowed all the costs of your home build part 1 and Have you allowed all the costs of your new home build part 2), then calculate the cash flow of these costs (when bills have to be paid – I'll discuss this in a future article in more detail), and then balancing this against the money that’s available now, as well as the income that you will earn while the project is in progress, or which will come from the sale of assets, or from bank loans. It’s advisable to add a contingency to these costs, as well as erring on the side of caution when calculating the income you expect to earn.
There are a number of ways of obtaining a cost estimate:
If there appears to be sufficient finances to cover the cost of the project consideration can be given to proceeding further. If the project is too expensive there may be other alternatives such as:
For more valuable tips and advice read: Build and Renovate Your Home With Your Eyes Wide Open.
This is an extract from: 'Build and Renovate Your Home With Your Eyes Wide Open' by Paul Netscher. Available in paper or eBook from Amazon.com, Amazon UK,Amazon CA, Amazon AU and all online bookstores. To read more
© 2018 This article is not to be reproduced for commercial purposes without written permission from the author.
I’m a construction professional, author of several successful construction management books, and a home owner. I’ve made mistakes in construction management, I’ve seen others make mistakes, but importantly I’ve had multiple successful construction projects and I’ve learned from the mistakes. I want to share these lessons and my knowledge with you.