Zera asked in recent post about the square foot cost of a home, and the answer seemeed to be anywhere from 50-150 bucks per sqft., and then lots of intangibles like how fancy-schmancy you want to get, your location, etc. In short, there was not a very good answers to the question because of all the variables involved.
I’ll ask the same question, but I want to work the equation from the top down. I know what a new 2000 sqft. neighborhood house sells for on a “normal” residential lot here in KC (around 200K, so math tells me that’s 100 bucks per). If I know what a builders typical margin is, then I can do the math again and find an approximate building cost, right?
What kind of margin does a new home builder typically expect in a spec home? Do you look for more margin in more expensive homes? What about margin in a one-off custom build?
Replies
about 5%.. but that's like a net/net/ net..
ie: you or i have no idea what is being recaptured before you get to the bottom line...
so ... good luck in your reverse engineering of the costs
5%? that's REALLY low. A three year AAA bond yeilds more than that, and you don't have to work.
Thats why we arent stock brokers.
I think 5% is low for here, but I think 100 a square foot is way low for here, serious low ballin house, with every corner cut and a non discriminating audience.
5 % ain't low... not if it's on top of the company car.. th company truck.. the health plan... the 401K.... the company insurance... the "key man " insurance..
net /net/ net
what ever... there is NO standard margin.. absolutely none... you cannot reverse engineer this to arrive at costsMike Smith Rhode Island : Design / Build / Repair / Restore
Nor can he figure to be able to do the same house for the samwe money if he is not in the business and have the same quality.Worse, maybe with luck, but not same/same.Would be kind of like looking at cars. Lesseee, I can find this one with a list prioce of $38K and the internet engines tell me that the incvoice price on it is $33K a nd it can be purchased here for $33.4K so obviously that includes shipping and stuff. I bet i can build that car for under 30Kyeah Right!
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
The only way you can figure this is to count every nail, 2x, plywood, wire, window, door, shingle. a complete material list of every item. Then go to the yard and get prices on everyitem. add them up, multiply by 100% and you still will not be close. If you think you can build for 70k it will take 90k. if you think 120k it will be 200k. too many variables.
Amen to that. I'll charge the client with a 30% margin just to make sure I finish with a 10% profit!!
Careful. I looks like you forgot your land cost. Worth more than my house up here in VA. I appologize if your $200K already adjusts for it.