With a lack of adequate reasonably priced homes and the growing ability to work remotely, I’m fielding more questions about financing “Barndominiums”.
I spent 24 years in the commercial and residential construction world prior to jumping into banking, and I love construction and renovations. I love conspiring with clients for their construction financing needs. They get so excited about designing and building a home that truly fits their lifestyles.
But I also see the disappointment as they develop and design a home that suits their needs and lifestyles, only to have the design come in over budget – and have to literally “go back to the drawing board”.
That’s why I love Barndominiums. Fewer variables than custom stick built. They can be a GREAT affordable option for many homebuyers. And they can be built quickly and at very reasonable costs. (here’s a link to a recent publication by ListReports for “The Cost of Barndominiums” )
HOWEVER, while the $90,000 price tag of a Barndominium Kit can be incredibly appealing, keep in mind that other construction activity costs ARE NOT included in that price tag.
And these additional construction activities and general conditions can add significantly to “the kit” price tag. The biggest cause of cost overruns is simply overlooking the cost/activity – simply forgetting to include it in your construction budget.
If you’re considering a Barndominium, here’s a very general checklist to help you at least identify the additional major construction activities (and there’s a lot). I hope it helps.
In addition to the “kit”, you also consider the following costs/activities:
- architectural/engineering,
- plans/specs,
- permits/inspections,
- site clearing/grading,
- Dumpster & debris removal
- temporary utilities,
- Kit Freight, delivering, unloading/staging
- supervision,
- builders risk and general liability insurance (also collect worker’s comp waivers from uninsured subs),
- interim construction loan closing costs and interim loan interest,
- permanent financing settlement charges,
- survey to determine property lines and setback and easements,
- another “forms up” survey,
- and a “final survey”,
- Soils test
- foundation/piers/footings,
- mechanical/electrical/plumbing,
- septic system (including design) or sewer lateral tap,
- water meter, water connection or well, (distance from service at the property line to the house deep in the lot ,
- Kit erection
- Weather proofing (calking, dam proofing, flashing, etc.)
- Interior framing (blocking, partitions, soffits, stairs, ceilings, etc.)
- Exterior framing (porches/decks, stairs, facia, soffits, trim, blocking, etc.)
- Insulation
- Sheetrock including taping/floating/texture
- Interior/exterior doors
- Windows (sometimes included, but you may have a preference)
- Garage door and operator
- Interior/exterior wood trim (door casing, baseboard, built-ins, closets, etc.)
- Decorative cladding (stone, stucco, wood, etc.)
- countertops
- Interior/exterior paint
- Wall tile,
- Flooring (carpet, tile, wood, finished concrete, etc.)
- Fixtures (door/cabinet hardware, electrical, plumbing)
- Appliances
- Driveway & Culvert, walkways
- Fencing, gates, etc
- Landscaping (topsoil, grass, shrubs, edging retaining walls, etc)
Side note: Construction Financing can be complex. There are MANY financing options for financing, but some will be far more restrictive or far more expensive than others. If you’re leaning towards building, your average loan officer can’t handle it. Find a lender that specializes in new construction strategies.
So, if you need a home, and can’t find one that suits your needs, and conventional stick-framed custom construction is too costly, run the numbers yourself! A Barndominium on your own spacious lot, could be an affordable option.
Jay Atterstrom
📧 [email protected]
📞 (214) 377-0033
(this may not pertain to many of you but it's a growing segment of the new residential construction market and it addresses a lot of questions i've fielded recently)