Planning to Build a House


My wife and I have a goal to build a home in 5 years in northern Utah.

We're hoping that gives us some time to save up some cash to have on hand.

We know what land we'd like, but don't have the money to do it now.

In any case, how early is too early to start planning things?

I know material, land, and labor costs change over time so what I find out now, may not be what I get closer to building time.

Do you have general time-line recommendations for how early to start some of the initial leg work and research?

Thanks a lot for your great information on your site and for "Ask Carl".


Hi J.P.

How early is too early to start planning things?

It’s never too early to dream and dreaming IS planning.

Planning is a wise thing to do for just about every endeavor.

I’ve seen people take longer than 5 years!

Good planning helps prevent mistakes down the road and saves you money in the long run, especially when building a home.

First of all, guesstimate what your total budget will be in 5 years. (Cash + borrowing power = budget…see Home Building Budget)

Figure that at least 25% of that total will go for land and the balance for your house.

Always plan on fitting the house to the land, not the other way around, so looking for a building site in that “land you like” should be a little higher priority.

Perhaps you could even find a (land) seller who is willing to finance the land cheaply…it is after all, a “buyer’s market”.

But first, talk to a local lender to see if you can use land equity as your down payment when you get ready to build.

Your land equity should be the difference between what the land is worth, or what it cost (the lesser of the two), and what you still owe on it.

Paying for land has been a great way for people to save for building a house…it is sort of a forced savings plan…and, you lock in the land cost.

Land will certainly appreciate over 5 years and cost more, whereas building costs should remain a little more stable as the housing industry recovers.

If the cost of your building site rises too much before you are ready to buy land, you can adjust the house size to compensate for the higher land cost.
(Remember-Size & design = cost)

Good luck,