Diana Kliukovska, the development manager of the company “Plote.lt” engaged in individual house development business, says that people often start with the desired house area and luxurious interior solutions, and think about the budget later. Then it becomes clear that overlooked expenses can inflate the budget even twice.
“It is important to agree right away on what we call a house worth 200 thousand euros. Is the plot included in this amount? To what level of completion will the house be built? Do we count interior finishing, terrace, fence, and yard? Until we have these answers, the budget size itself does not say much,” says D. Kliukovska.
Much less remains for construction
According to “Plote.lt” calculations, the plot on average accounts for about 22% of the total individual house budget. So, if the total project amount is 200 thousand euros, about 44 thousand euros would go to the land.
Design, documents, and construction up to 85% completion usually make up about 65% of the total amount. In this case, it would be about 130 thousand euros. The remaining budget portion goes to construction management and financing if a person hires a partner to oversee the entire process.
“Many clients calculate simply: I have 200 thousand euros, I want a 140 sq. m house, so I can allocate more than 1400 euros per square meter. But this would only be true if the person already had a plot, project, permit, and did not have to pay for other works. Starting from scratch, about 130 thousand euros may remain for the construction itself,” explains D. Kliukovska.
If the plot already belongs to the family, the situation is much more favorable. Then more money can be allocated to the house itself or its finishing. However, even an owned plot can present surprises: poor soil, difficult terrain, electricity connection, drilling, or a local sewage system cost extra.
What kind of house can be expected?
Based on contractor competitions organized by “Plote.lt” over the past 12 months, the construction of a simple architecture house up to 85% completion currently costs about 1100 Eur per sq. m. The price of a mid-range house with more individual solutions is about 1250 Eur per sq. m.
The cost of building more expensive houses starts at about 1450 Eur per sq. m and, choosing non-standard architecture, large windows, high ceilings, or more expensive finishes, can exceed 2000 Eur.
Thus, having about 130 thousand euros for construction itself, one can plan a simple architecture house of about 115–120 sq. m. Choosing more individual solutions, the real area would approach 100–105 sq. m.
However, D. Kliukovska emphasizes that the price per square meter is only an initial guideline.
“Houses of the same area can cost very differently. A simple rectangular 120 sq. m house can be cheaper than a 100 sq. m house with several volumes, a complex roof, and non-standard windows. Therefore, it is important to evaluate not only the area but also how much the chosen architecture will cost,” she says.
An additional 20 square meters is not a trifle
According to the expert, families usually start designing a house from rooms: three bedrooms, a living room with a kitchen, a study, two bathrooms. But adding corridors, vestibule, technical room, wardrobes, and walls, it turns out that the planned 120 sq. m house has grown to 140 sq. m.
With current construction prices, an additional 20 sq. m can cost more than 20 thousand euros. Later, a larger house will also need to be furnished, heated, and maintained.
“Reducing the area does not mean reducing the living room or children’s rooms. Usually, one should first look for poorly used spaces: long corridors, oversized auxiliary rooms, or rooms with unclear purpose. A well-planned 115 sq. m house can be more comfortable for a family than a 140 sq. m house where part of the space is simply lost,” says D. Kliukovska.
The building shape also strongly affects the budget. Every additional corner means longer foundations, more exterior walls, a more complex roof, and more work.
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According to the expert, with a limited budget, it is better to choose one or two important solutions for the family, for example, a larger living room window or a convenient exit to the terrace, and design the rest of the house as simply as possible.
The plot price can be significantly higher than it appears in the ad
The 200 thousand euro budget can also be disrupted by an insufficiently evaluated plot. Before buying it, one needs to check not only the designation but also building possibilities, protection zones, easements, access, soil, terrain, and communications.
D. Kliukovska recalls cases when people planned a house of about 130 sq. m on a plot, but due to existing restrictions, they could actually build only about 80 sq. m. There are also plots where the access road belongs to several owners, so approvals for construction take months.
“Sometimes a more expensive plot with clear access and nearby communications ultimately costs less than a cheap plot that still needs to be prepared for construction. If raising the plot, soil improvement, and network installation require an additional 20 thousand euros, the amount left for the house decreases by the same,” she says.
Therefore, before buying land, it is worth at least preliminarily checking whether the desired house fits on it and how much it will cost to start construction. The plot and house should not be planned separately.
85% completion can be misleading
When calculating the budget, it is important to distinguish between house construction up to 85% completion and a fully finished dwelling. 85% completion allows registering the building and performing property valuation but does not necessarily mean the family can move in yet.
There may still be wall, floor, and ceiling finishing, interior doors, plumbing fixtures, lighting, kitchen, and other furniture left. This amount usually does not include the terrace, fence, paving, and landscaping.
“You need to have two clear numbers: how much it will cost to build the house to the planned completion and how much more will be needed to live in it. If the entire budget ends at 85%, the house is built, but the family still has to look for money to finish it,” notes D. Kliukovska.
Some works can be postponed. For example, fence, terrace, or landscaping can be taken care of later. But their cost should still be anticipated so that it does not become a surprise at the end of the project.
It is important to clearly know when the money will be needed
When building a house, it is important to plan not only the total amount but also when it will be needed. Payment for the plot, project, surveys, and initial construction works must be made before there is suitable collateral for the bank.
Therefore, a person may earn enough to get a 200 thousand euro housing loan but not have funds to finance construction independently for a year or more.
“When buying an apartment, usually a down payment is made, and the bank finances the rest of the price. Building a house is more complicated because the property value is created gradually. Even before starting, you need to know who will pay for each stage and when bank financing will be available,” explains the expert.
Models are already offered on the market where intermediate payments are taken by the company managing the construction process, and the client pays most of the amount after the house is built. However, according to D. Kliukovska, in any case, it is important to accurately assess the contract terms: who is responsible for deadlines, contractor work, defects, and possible price changes
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