Tyrone

So now you have survived escrow, packed up your things and moved into your new home. But the buck does not stop there. Now you have bills to pay, furniture to buy, maybe some repairs to make and then there is the mortgage. You are starting to think, Hey, I paid $225,000 for this house. Where on Earth did that money go?

If you were to build a home instead, what would you have to do? Lets say you buy some raw land outside of California for $30,000. Before you can start building you need to deal with processing approvals, remove trees, level the ground, pave it and prepare for building. This will probably cost around $11,000. Next you have to get environmental assessment which will be around $750. Then lay water and sewer lines and maybe deal with sediment control another $5,700. After the lines are down, there is water-electrical hookup for around $1,250 plus tree preservation, planting and wetland preservation for another thousand. On top of that you have financing, bonding fees, escrow, and other costs totaling to $4,000.

Now you have to buy you building permit, sewer and water inspection, steel for foundation and maybe even impact fees. Together this will cost around $4,900. Before construction, you have already spent $57,600 just over 25.6% of the cost of your bought house.

Now you are ready to build. Construction expenses will be 54.8% of the total purchase price ($123,300). Nearly 10% of that money will go for excavation, backfilling and foundation; 6% for plumbing; 20% for framing, sheathing and trusses. Then there is tile and carpeting, cabinets and countertops, drywall, heating and air conditioning, and siding which together will take up 23.5% of your budget. Another 20% will include windows, exterior and interior doors, patio, stairs, roof shingles, gutters and downspouts, driveway, landscaping, trim materials, appliances, painting, electrical wiring, light fixtures, insulation and other costs you might encounter. The rest will go to overhead and general expenses, the builders profit (9% of the total purchase price), sales commission, marketing and financing.

Sounds like it is much easier to deal with your monthly mortgage payments for 15 to 30 years then have the headache and hassle of dealing with all the small costs and worries of building your own home.

To learn more about how Real Estate Investments can help secure your family's financial future, go to Dr. Alan Rosenthal's website at http://www.FinancialHealthRealEstate.com where you can find more great investment information. And while you're there, please sign up for your FREE Financial Health Real Estate Starter Package full of tips, newsletters and much more. Plus, you are cordially invited to attend one of his real estate investment workshops by visiting http://www.FinancialHealthRealEstate.com/UpComingEvents.html For additional information listen to one of Dr. Alan Rosenthals investment talks at http://www.FinancialHealthRealEstate.com/InvestmentTalks.html