Lot Cost Vs. Build Cost

Lot Cost Vs. Build Cost

Author: Sam Chapman

If you are planning on building a home in Central Texas, do you know what to look for when looking for a lot? The cost of the lot may be more than you think it is. I’m not talking about the actual cost to purchase the lot, but what additional costs there may be when building. You need to know what to look for when buying a lot.

The first things to look for in terms of buying a lot should be fairly obvious, but they are not to people who have not built before. Does the lot have a source of water and sewer? If the lot does not have these things, the home may need a water well and septic system, both of which can be expensive. If there is water, but not sewer, a septic system will be needed. If a septic system is needed, what kind of footprint is available for the house when you consider the septic tank and drain field location. Or if you know where you want to place the house, how expensive will it be to install the septic system in the space that is left?

Another thing that may be obvious is the slope of the lot. In the Hill Country it is rare to find a lot with a perfectly level area on which to build. There may be significant excavation and or fill to do in order to prepare the land for the foundation. Concrete pours are generally charged by the square foot. Usually, any thickness over three feet will incur an additional cost per foot of height. The slope might not look like much, but even a gentle slope can add up.

One of the less obvious things to look for is the elevation of the lot compared to the road if sewer is available. If the house will be below the grade of the road, a grinder pump will be needed in order to lift the waste water and sewage material to the level of the pipes at the street. A grinder can add to the cost of building.

Another thing to look for, that you can’t really see, is the plasticity index (PI) of the soil. The PI is a measure of ground expansion and contraction when the soil is wet or dry. Much of the Central Texas Hill Country is made up of limestone and generally has a low PI, but there are areas of clay and sand that have a much higher PI. Land with a high PI will require additional reinforcing of the foundation, meaning additional steel rebar or extra thick steel. This can add to the cost of the foundation.

What about water drainage on the land? Any water that flows toward the house will need to be diverted away from the foundation. Depending on the topography of the lot and the location of the house, this can add some costs. If you have the money and creativity, consider turning challenge this into a water feature.

Look at the trees on the lot. Most people love oak trees. They are slow-growing, last a long time, don’t easily split or have branches fall in strong storms and provide great shade. You generally don’t want to remove many oaks, especially if they are large. If there are some good oaks, you may want to build the house around them. This can present design challenges and construction challenges that translate into additional costs. The other thing about trees is that you will want to clear anything you don’t want to keep. Some lot owners clear most of the unwanted trees in order to show prospective buyers what the lot really looks like. If not, there will be another small cost.

Of course there is more comparing lot cost to build cost, but this is a good start. The best thing to do when you see a lot you like is to have your REALTOR find a good builder to come out and look over the lot. A builder should be able to tell you what kind of costs you may incur when looking at the lot and the home you want to build.

Sam Chapman is a REALTOR® who has lived in the Austin, Texas area for 19 years. His speciality is working with buyers from outside of Austin. Sam works all over Austin, but also has expertise in Lake Travis and Hill Country real estate. Learn more about Central Texas Hill Country Real Estate