Building a House For Under $200k: Costs & Money-Saving Tips

Upgraded Home Team
by Upgraded Home Team
Home prices in America are rising every year and the median price doesn’t seem like there is any sign of it slowing down. Just about any homeowner would build a house for under $200k if the market made it easier. Luckily, you can build a house for under $200k, so follow along as we explore the easiest way to do so.

Designing and building your dream home is an exciting prospect. It can seem unattainable and overly expensive to many people, but it does not need to be. You can build your dream home for under $200k.

The average selling price for houses today is $300k. If you carefully choose your floor plans, square footage, location, materials, and the property it sits on, you can build a house for under $200k that will save you money.

If you want to build a house for under $200k, there are several things that you need to do, such as:

  • Minimize the square footage
  • Choose cheap materials
  • Keep it to one story
  • Build simple

More than anything, the biggest expense in building a home is the labor and materials. If you choose a lot that is already developed, that can save you a fortune that goes towards materials and labor.

Let’s take a close look at everything that goes into building a house on a budget.

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Where to Begin

What region are you located in? Depending on where you are located, building a home can vary greatly in cost. That comes down to everything from lot costs, local regulations, and the average cost of square foot in the effected region.

The location of the lot that you are trying to build on plays a key role as well. If you want the costs of your new home to be under $200k once all is said and done, choose a developed lot.

More often than not, developed lots are already in prime condition for a house to be raised. That includes easy plumbing set up, gas lines and ease of access for the workers building the house.

If you are dead set on building your new house on an undeveloped lot, it will be extremely hard to stay on budget due to added cost. That is because you will be paying for labor for a longer period of time. Undeveloped lots require excavation which can cost up $4,000 for small lots.

Floor Plan Pricing for Your 200K Budget

Building a home will cost at least $153 per square foot, which means you’ll be right under the 200K budget. This means you can expect to build a home that’s around 1,200 square feet.

1,200 square foot home floor plan

The Design Phase & Cost Per Square Foot

How many square feet do you want your new house to be? The average cost per square foot differs depending on where you are located. On average, the cost per square foot is $153 when building a home in the United States.

With that number in mind, consider how much of your budget you want to go towards square footage. If you wanted to build a 1,200 square foot at $153 per foot, for example, it would cost $183,600. It could be more or less varying state to state.

That would leave you room in your budget to spend money on furnishing and new appliances. However, going with 1,000 square feet instead leaves you with more room to put the remainder of your budget towards settling into your new home.

Going down from 1,200 to 1000 square feet could trim around $30,000 on building your house.

Square footage also affects the cost of the design. On average, architects’ cost $1.50 per square foot in the design phase. If your new house you are planning is going to be 1,200 square feet, that will cost you at least $1800.

Building Cost Per Square Foot (By State)

StateBuilding Cost Per Square Foot
New Jersey$162.64
New York$165.01

Choosing the Right Materials

Considering that labor and materials account for the majority of the costs of building a new house, it is important to choose wisely. There are several cheap materials that are also durable and aesthetically-pleasing, including:

  • Reclaimed wood
  • Prefabricated materials
  • Brick
  • Bamboo
  • Concrete

Not only are those materials big money-savers, but they also each have a distinct look. More and more, homeowners have been building houses built with concrete. It creates a modern look while also saving money.

Prefabricated materials may just be the biggest way to build a new house for under $200k. Modular homes are wildly popular today, and it is because of how cost-effective it is.

A modular home is one that is mostly constructed section by section at a different location then brought in and installed on site. There are many possibilities for style and layout without modular homes and it does not only limit you to one story.

You can even have a modular home built atop a basement if you want to add value to your new house. Besides modular homes, choosing materials like reclaimed wood, classic brick or bamboo can save you as well.

Building a Garage

Do you want your new house to have a garage? Building a garage costs roughly $49 per square foot but can vary based on materials. A one car garage can cost up to $14,200.

If you want a two-car garage, however, the least you will spend is likely $19,600, with $28,200 or more being the highest. To be cost-effective, you could choose to build a one car garage and if there is room for a driveway or street parking, park the other car or cars there.

Spending up to $28,200 or more for a two-car garage is more than 10% of your budget and may not be worth it.

Every Choice Counts

If you want to stay on budget, stay simple with all of your design choices. Each decision adds to the cost, whether it be those extra square feet or the roof that you choose. The roof alone will cost you roughly $7,200 minimum on average, if not more.

Every single choice in building a host adds to the price tag, right down to the foundation. There are only a few options for foundations, but the cheapest one is the classic slab foundation.

Typically, you only spend $5-$7 per square foot for a slab foundation. If you want a basement, however, you will need a costly full basement foundation. A basement foundation costs anywhere from $10 to $25 per square foot.

Basements add cost besides just the foundation, such as plumbing and electrical work, so you should consider whether or not you need a basement for the budget. Basements can cost up to $30,000 or more when all the costs are totaled.

Be Frugal With Finishes

Your new house can look great without having to overspend. One of the big costs that comes late in the process of building a house is the finishes.

While marble and granite tops do look great, they are also extremely expensive. Marble alone costs between $125 and $200 per square foot and depending on the size of the kitchen, that can get quite pricey.

You would be spending at least $1,000 and $10,000 depending on the size of the kitchen with premium materials like marble or granite.

A great alternative to granite that can save you a fortune is tile. Tile costs between $5 and $30 and has a classic yet modern look. You are usually not going to spend more than $3000 for tile countertops including the cost of labor.

Another great countertop finish option that is inexpensive is laminate. Laminate countertops are a little bit more expensive than tile, coming in at $25-$50 per square foot, but they are still a great deal.

The best thing about laminate besides the price is that there are many designs to choose from. Laminate countertops can look just as great as granite or marble countertops.

Installation and materials together won’t cost more than $2000, on average, and your counters will look gorgeous.

Plumbing Costs

Plumbing is one of the bigger costs in building a house. If you want to build your house for under $200k, consider the plumbing when choosing your square footage. The bigger the house and the more sinks, bathrooms, and showers it has, the more costly the plumbing will be.

Plumbers and contractors charge you per sink, toilet, water heater, shower, washer/dryer, bathtub, and water line. Typically, you will have to spend between $600 and $1,600 per sink toilet, shower, etc., etc. Keep that in mind when you are deciding on floor plans.

The type of piping that you choose for your house’s plumbing affects the total cost. Copper is the most common and popular type of pipes for plumbing. That is because copper is durable and long lasting and can cost up to $5 per square foot.

When compared to PEX pipes that cost $1.50 per square foot on the low end, copper is not an ideal plumbing material to stay on budget. The cost of PEX plumbing is rarely more than $6,000 at the high end.

Copper piping, on the other hand, costs between $8,000 and $10,000. PVC is another cheap alternative to copper that costs $1.25 per square foot on average and can save you up to $5,000 when compared to copper.

Flooring Costs

Floors, much like countertops, are only as expensive as the materials that you choose. There are several budget floor materials that can keep your building costs under $200k, such as:

  • Vinyl sheets
  • Vinyl planks
  • Oak wood
  • Laminate

Laminate flooring, for example, only costs between $2 and $8 per square foot. If the house you are building is 1000 square feet and you wanted laminate floors throughout it all, materials would cost no more than $8,000 at the most, excluding labor.

One of the cheapest flooring material options available is vinyl sheet flooring. You can spend between .50 cents and $2.00 per square foot for vinyl sheet flooring. It is a cheaper alternative to vinyl plank flooring which costs roughly $5.00 per square foot.

Vinyl plank flooring may cost more than vinyl sheet, but it is still much less than the $10 to $20 per square foot that marble would cost.

While it may seem expensive because of how great they look, oak wood flooring is a great budget option when building a house. Regular oak wood floors cost $2 to $6 per square foot. If you want to go with a different, brighter style, you could go with white oak floors that cost $5 to $8 per square foot.

Painting Costs

When your house is finally built, it is time to get it painted. Interior and exterior painting costs are different. If your new house is 1,000 square feet, for example, painting the exterior could cost between $1,000 and $3,000.

To paint the interiors of the same 1,000 square foot house could cost between $1,500 and $3,000. Prices vary depending on labor, type of paint and how much is being painted. Depending on the materials that you chose, the exterior may not need to be painted.

If you went with classic brick, stone, or prefabricated materials, you probably do not need to paint the outside at all. The interior is more expensive than the exterior because generally there are more surfaces to be painted inside.

Because of that, the painter or painters have to spend much more time priming and preparing the walls for the paint. The paint itself is fairly inexpensive ranging from $25 to $70 per gallon roughly. In general, two gallons of paint is considered enough to cover 800 square feet.

If your house is 1,000 square feet, that means you would be between $50 and $140 for the necessary paint. That is not as expensive as the labor which makes up for $1,200-$2,860 cost of having a 1000 square foot interior painted.

Electric Costs

Electrical work is a huge expense in building a house. Generally, workers will charge you between $40 and $100 per hour/100 square feet. That is before the costs of materials, parts, wiring, or individual fixtures, such as lights.

Outlets and lighting fixtures cost up to $150 to have installed by an electrician. To have a 1000 square foot house wired can cost you between $2,000 and $6,000. If the house has a garage, it will be an additional $1,000 to $4,000 to get it wired as well.

Do You Need to Hire an Architect or a Builder?

Get free, zero-commitment quotes from pro contractors near you.

What Did We Learn?

Building a house for under $200k is easier than it seems. All that you have to do is carefully consider the square footage and materials.

Cutting back on unnecessary frills like granite or marble and choosing to build on a developed lot can save you a fortune.

You can truly build a beautiful home for $200k with a little bit of ingenuity and careful planning.

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Upgraded Home Team
Upgraded Home Team

We are a team of passionate homeowners, home improvement pros, and DIY enthusiasts who enjoy sharing home improvement, housekeeping, decorating, and more with other homeowners! Whether you're looking for a step-by-step guide on fixing an appliance or the cost of installing a fence, we've here to help.

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