How do you start to price building a home?

[Nick Hawthorne]

Hi - I'm looking into different options to buy or build a luxury vacation home that can be used primarily as an STR to cover the costs and then be a getaway for my family several times per year. One idea we've been discussing is purchasing land by a lake and building a new home on it. How does one even start to calculate the cost of building a home? Talk to a builder and architect? And would a loan work fairly similar to a conventional mortgage, with a down payment and then conventional payback period? Thanks for any thoughts!

[Bruce Woodruff]

Unless you get a set of approved plans and have a GC bid them out for you, then you're just guessing. You can always use the $.x per SF method, but once again you're just guessing. 

Guessing is fine if you can afford to be off by $100k.....

A really good, old, experienced GC could possibly walk the site and with some drawings, provide a closer 'guess' bit you're not going to get within $50k of the final number without those plans....and note I said approved. You can use all the $.x per SF you want to , but when the city (plan-check) changes one little thing, you're screwed. Ask me how I know......