Home Equity Loan Montana Resources
If you’ve read my first article, BUDGETING YOUR LOG HOME: Where do you start?, you’ve got a very basic overview of the process. However, there are still a number of questions I’d like to address. Again, many of these questions will come up if you build any custom home, but I’d venture to guess the log home owners find themselves deeper in the decision-making process than someone dealing with a custom builder. After all, the differences become apparent immediately as the owners have to find their own manufacturer.
Unless you have a pocket full of cash, you’re going to have to follow the construction loan mindset throughout the budgeting process. I plan to devote a whole article to the construction loan, but this pursuit will serve as a preliminary step before going to the bank.
The biggest part of your budget will be the purchase of the land. With today’s new construction market - especially in New Jersey - the raw land constitutes 30%-40% of the total project (of course, in other states the land won’t be so much but your overall costs will be less, too). It helps to purchase the land first so you know how much money you’re going to have left over.
Then you need to figure out how much to set aside for your excavation, your driveway, and your septic system. Before you can get to this number, it helps to hire a civil engineer to draw up a survey and plot plan (you’ll need the survey for the mortgage company anyway). This will cost you a few hundred dollars. The plot plan will diagram where the house will go (and footprint of the house), the length of the driveway, where the septic and well will go. With this document, you can go to the excavator for a quote.
Since most log homes tend to be built in rural areas, you will probably have to install your own septic and well. The excavator who does your driveway will most likely be the one who will dig your septic. The well driller will probably be a different company. These are both “wild cards”, because the cost of the septic will depend on how well the land percs (short for percolate), and you don’t know how deep your well will go.
Once again, the engineer will design a septic plan which will have to be approved by the county (in most states). The cost of your septic could range anywhere from $10,000 - $30,000. If you are setting the house way back from the road, you must budget for that extra-long driveway. And if your lot is heavily wooded, you will have to pay extra for tree removal; remember that you need to clear plenty of space to accommodate both the house and a large area around the house for the machinery to maneuver. You also have to consider a space to put the logs after delivery.
Once the location and footprint of the house is determined, you may need to use a different contractor for the foundation. Foundations are not provided by the log home manufacturer (with rare exceptions). There are several ways to go: you can build on a slab, a crawl space, or a full basement. You can use a block foundation, a precast foundation, a poured concrete foundation (these are the main choices). Poured concrete is the most expensive. These days, many people choose precast foundations for log homes, because they are so accurate and don’t require a footer. If you go this route, you’ll have to hire a mason to pour the floor after the precast foundation is erected. Remember that if you choose to build on a slab, you’re going to have problems routing your wiring, because this is normally done from the basement.
Your log home manufacturer is going to give you a quote for the package. Many people want the manufacturer to quote on a “turnkey” house or at least a weathered-in shell, as a matter of convenience. However, this might not be the way to go if you live in a different state from the mill. Do you really want to pay shipping for plywood? In the end, having your contractor purchase lumber locally could save you thousands of dollars, even it it’s a little less convenient to calculate it initially. Your local builder will gladly give you a quote as long as he has a good set of preliminary plans to work from.
I started with a simple check list to sort out my budget. Luckily, I found a contractor who was willing to take over the project and hire his own subs; his itemized quote helped me visualize all the elements that went into the project. Then I added subs that I hired separately (excavator, mason, landscaper, etc.). Here are some line items that went on the checklist: Air Conditioner, Appliances, Builder’s Profit, Doors (interior), Doors (exterior), Driveway, Electrician, Fireplace, Flooring, Foundation, Furnace (or Boiler), HVAC Installation, Insulation, Interior Trim, Kitchen, Labor, Landscaping (Grass seed), Lift equipment, Lighting Fixtures, Logs, Lumber (plywood, joists, 2×6s), Mason, Permits, Plumbing, Plumbing Fixtures (sinks, bathtubs, toilets), Roof, Sanding and Staining, Septic, Staircase (if not included in log quote), Tiles (kitchen & bath), Utilities, Well, Windows.
Depending on your job site, you may have other expenses. If the flatbed truck carrying your logs cannot make it to the site, you’ll have to make provisions to off-load the logs elsewhere and have them brought in. If you are set way back from the road, you may have to pay for telephone poles, or pay for the trenching. Also, your builder may require that you bring power to the site for his tools (most allow you a few days of generator power, but not for the whole job).
It took a while to fill in all the blanks on my check list, but once I started looking at each task individually, the project as a whole made sense. Actually, the log package was the easiest part to deal with. In our case, the manufacturer provided the logs only (and the design), which came out to less than 1/6 the total cost of the house (not counting the land work). For the rest, the costs are like any other custom home; then the question becomes “Who does what?”. After all, a little sweat equity goes a long way.
