Budgets and Balance

Everyone has a budget: the total amount you have saved and borrowed to spend on your project. Below we will outline the big components of a new construction project assuming that you are building from the ground up. 

Land purchase

Vacant lots start @ around $40K in the Western Catskills and prices rise as one gets closer to NYC and Hudson Valley. Numerous factors impact the cost of land including natural features, existing site improvements, proximity to towns, etc. If you've narrowed down the area you'd like to buy in we offer consulting to select the best parcel for you. For a project in the Western or Northern Catskills you can pencil in a budget of $80K for a parcel of approximately 5+ acres and $120K in Ulster and Columbia Counties. Lower priced properties exist but hold those numbers as a starting point. 

Land purchase fees

You'll need to budget for surveying (if one doesn't yet exist for the property), closing costs with your bank, escrow fees, title insurance, etc. Establish a relationship and get pre-approval with a lender to get a good idea of your total closing costs. A minimum of $5K is a good benchmark here. 

Soft costs 

Once you own the property it's time to start figuring out what to do with it. "Soft costs" include all the non-construction related tasks integral to getting your project built including:

• Civil engineering

  • septic system design

  • design for any complex driveways, water runoff control, erosion control, etc

• Building design:

  • Architectural design of the building which can also include:

    • Structural engineering to evaluate and detail the system

    • Mechanical engineering to design the Heating, Ventilation and Air Conditioning systems (HVAC)

    • For our higher-end projects some times a lighting designer, A/V consultant and interior designer can be involved 

Our experienced team of consultants consolidates and coordinates this process so the design phase is as streamlined as possible. In typical construction Architect's fee range from 8-15% of construction costs. We provide a fixed cost for the design to avoid escalating budgets and fees. It's wise to budget a minimum of $30K for your design fees. Permitting fees are also a soft cost. These vary by the municipality but it's safe to budget a minimum of $1500 for a permit. 

Hard Costs

Site improvements are the first component of "hard costs": all the expenses related to actual physical improvements to the property. This will include: 

• felling trees, clearing and grading land to make space for driveways and the building site 

• drilling a well for potable water supply

• digging a septic field for wastewater 

• trenching for utilities from the street (electricity) and within the property 

• sculpting the land to shed water away from buildings and control erosion

• any excavation for foundations 

• retaining walls to deal with steep grades or slopes

• finish grading, seeding and mulching the cleared areas once construction is complete

We recommend holding a minimum budget of $50K for these costs; however, this is highly variable depending on the property selected. For example, a very rocky property may require expensive blasting to create a driveway and/or buildable area. 

Building costs 

Our projects start at $300/square foot. Square foot pricing is the most general budgeting metric. A simple hallway with 8' ceilings will cost far less per square foot than a beautifully tiled kitchen of custom cabinets. But we find this is a good place to start and how to think about the size of your project. 

Hardscaping + Landscaping

The sky is the limit when adding a pool, patio (hardscaping) and gardens, specimen trees (landscaping). Clients can often add a lot of value if they are avid gardeners but good plants still cost money. We advise holding a minimum of $15K for this area. 

Contingency

The most thorough budget can drift, usually upward, for a variety of reasons:

• an unrevealed condition from the site 

• client's change to more expensive finishes or specification

• as the building progresses the client decides to invest more in built-in cabinetry, A/V system, etc 

We endeavor to make our design packages and estimates as thorough as possible but we advise holding a minimum 5% of hard costs as a contingency. 

ASSESSING THE OPTIONS

In our last post, we discussed the intentions, priorities, budget, and timing of finding a new home. Hopefully, that process narrowed the range of your search to a 20 mile or 30-minute radius, and, with a budget in mind, you can start evaluating properties. 

The most sustainable and often cost-effective option is to remodel or renovate an existing home. An old house represents a significant embodiment of material resources and physical effort and we encourage folks to renew one for their family and subsequent generations. But in many areas there is little existing housing stock, the available stock is of truly poor quality or represents a bigger liability than an opportunity. In these cases, building new is the best option to considerately create the house you want. 

Within building lots there are several options: 

• a "greenfield" lot with no improvements: essentially raw land  

• an "improved" lot with a cleared building site with a driveway and some utilities installed or approved septic plans; sellers will ask a higher price for these investments

• a "tear down" property with an unusable house but existing infrastructure

Whenever possible we encourage our clients to find a "tear down" or in-fill lot between developed properties as close to or in town as possible. Not only will this save on infrastructure costs it preserves green space and can reduce the energy impacts of driving to and from the property. 

In reality, it can be hard to find a "tear down" property with a well-maintained infrastructure. A neglected house often comes with systems in poor repair that aren't reusable. Your home inspector, a well driller, or a civil engineer will need to verify their status. 

The ideal lot would be the smallest possible size (to save on property taxes) that still offers privacy, has a flat or gently sloping buildable area that is south-facing, well-drained, and, if you're making a wish list, has a striking natural feature like a stream, pond, or majestic view. And the closer the buildable area is to road access the more you'll save on building and maintaining a driveway and excavation for utilities from the closest electrical pole. We can quickly assess a parcel for build ability per local zoning code which will stipulate what the minimum lot size is and the buildable distances from the boundaries of the property. 

What about building and living off-grid? Most municipalities vigorously enforce planning and building codes which require the presence of an engineered septic system and a potable water source (a well). The combined needs of heating, cooling, cooking, lighting, and appliances require more electricity than on-site renewables can consistently produce and current batteries can affordably store. Propane or other fossil fuels can fill this gap needs but, in our opinion, it's far less sustainable and less self-reliant to depend on fossil fuel extraction than to connect to the electrical grid (which can also absorb excess energy made by renewables at peak times). Banks are less willing to fund a project that does not have the standards that most buyers expect and lessen the value of the finished building. 

For more reading on this topic here's a great overview of the energy realities of building off-grid. 

GETTING STARTED WITH YOUR PROJECT

Every week we get calls and emails from folks interested in renovating or building new homes in the Hudson Valley, Catskills, and NJ. They’re often wondering where to start: in their search for a place of their own, what things cost, how the design process works, how and long it takes to build. Our advice is to take a moment and start with this exercise first: write down your intentions, rank them into priorities, determine a budget, and think about your timeframe. 

Intentions

What lead you to this moment and why are you considering buying or building a house? Are you looking for a weekend home, a place to disconnect from work and/or technology? A place to relocate and work remotely full-time? To raise a family or start a new business? How much time can you commit to maintaining or developing a property? Do you want to be part of an active community? How many years do you imagine enjoying the property? Make a list of these intentions.  

Priorities

Location, location, location No two properties will have the same features (rolling rocks, a stream, full-grown deciduous trees) and not all areas have the same quality or combination of good schools, reliable internet, diverse businesses, and retained property values. This is why you’ll need to rank your intentions: a rugged 40 acres on a wooded hillside may be romantic but if it’s a 30 minute drive to the closest gas station or to get milk and eggs its appeal can wane. Is a sub 2-hour drive to NYC more important than a larger parcel? Do you want to be within walking or biking distance of trails, schools, or other amenities? 

Budget

How much are you willing to invest in your property? How much cash do you have on hand? Have you talked to a lender? Have you considered the prospective resale value? 

Timeframe

Do you hope to retire in this house? To spend a few years? How soon do you want to be on the property and enjoying it? Can you build it in phases: camping on the land the first year, starting construction the second, and moving in the third year?

In our next post we’ll walk through evaluating your options. In the meantime here are a few great resources on:

Buying a home upstate

Evaluating land

While no longer functional: The Catskills4sale.com has a wealth of interesting articles still available on the internet wayback machine