When deciding to build a home or buying a pre-built home, these are the things you want to consider. We have outlined this page into an FAQ style so that you can understand what the most popular questions are and help guide you in your decision. Depending on when you read this information the prices and process my have changed so verify the information with other resources.
Q. What is the cost to build?
The quick answer is anywhere from $150 per square foot to $200 per square foot on the Hilo side. On the Kona side the costs can be anywhere from $200 to $250/per square foot.
A home of 1000 square feet will cost about $150,000 to $200,000 for basic labor and materials. This does NOT include land.
Remember this is just a basic home. Prices can be different depending on roof design, floor plan, bathrooms, and fixtures (lighting, plumbing, fans.). Other costs that can increase the build are higher end flooring, doors and windows. A garage door or carport, driveway or gravel parking spot can also increase the cost. You may want to factor in landscaping, premium paint or a solar system if you choose to go that route.
Q. How long does it take to build?
Right now the typical permit process is anywhere from 4 months to 5 months. Additional time will be needed for purchasing land, obtaining financing, choosing contractors and fitting into their schedule. As of lately, getting materials and supplies can be challenging and time consuming. If you’re financing the process can take 8 months to a year. Paying with cash, you are not held back on the lender’s approval process.
Q. Should we finance or pay cash?
If you can afford to use cash that would be the fastest way to build the house and then refinance after. If a loan is required, note that you will need to hire a licensed contractor. With cash you can do owner builder, which means you can be the contractor for the overall home build. You will still need to use a licensed plumber and electrician.
Q. What is the difference between an owner builder and using a licensed contractor?
In the state of Hawaii a homeowner may be their own contractor and hire out the overall construction of the home. They can pull the main building permit and manage the subcontractors or do the majority of the work themselves. For example: the foundation subcontractors, framer subcontractors and roofing contractors. **Note: this does NOT allow you to do your own plumbing and electrical work. You still have to hire licensed plumbing and electrical contractors.
Also note that if you do an owner builder permit you are NOT allowed to rent out or flip the property for one year. If there is a hardship a home owner can file an exemption. Exemption Form
Additional: Risks and Responsibilities of Being an Owner-Builder
Q. Are there qualified tradespeople?
There is always a horror story about bad builders or subcontractors that do bad work, don’t show up or steal. The best is to get word of mouth from people that you trust. Get formal bids and request a contract. If they accept credit cards even better. Get referrals or recommendations. Get licensed professionals that have a legitimate business. They might cost more but you have a higher chance of working with professionals.
Sometimes hiring a contractor is money well spent as you won’t have to manage many people and you only have the contractor to manage.
Q. What type of home should we build?
Find out what your budget is. If you can only afford $50,000 your budget will likely be a tiny home/shed or a yurt. If your budget is a traditional home but you want to stay on a budget the best bet may be to buy a kit home that is ready to build as you will save time and cost on preparing the plans.
Q. Should we build a home or buy one?
The question should be what is your budget and timeline. If this is your first time building a home. Everything will be more costly and take longer. Unless you have good finance and time management skills there is still a learning curve and there is a cost to that learning curve. The chances are you will go over budget and it will cost more than you expect. As of this writing in April 2022, there is a high demand for building, builders and supplies. So, prices are higher to build but resale value of homes are just as high. The best way to value a home is to divide the selling price by the legal square feet. This would be considered the replacement cost calculation. What is it going to cost to replace that house at the current market value. For example, if the house is selling for $100 a square foot and doesn’t have much in the way of repair costs then in the current market it would be better to buy a house if the cost of building is $150 a square foot. You would save $50 a square foot by buying over building.
Q. What are the reasons to build?
Sometimes you want to live in something unique or experience the brand new house feeling. Other factors can be cost and value. Everyone has different reasons and can approach home building in their own unique way. What does not change is the process and the level of stress you may have.
Anything can be a major undertaking if it is your first time, but the reward can be that you build something for you or your family that is customized to your personal tastes. Building is not easy but there are just as many upsides as there are downsides. Building your own home can be just as romantic as finding your perfect home.
Q. Why should I build?
You should build if you want something you had a hand in creating. You want to build because you can do something basic or have the patience to hire the right people. You want to build because you can save money if done right.
Build only if you’re willing to take on the level of stress and learning curve involved. The biggest skill set is the willingness to be patient and open to the process. Even hiring a contractor doesn’t shield you from making a ton of decisions on a daily basis.
Q. Any other additional tips?
Anyone can build a home. All it takes is patience, willingness to learn and money. Not to say you can’t build a tiny house with basic amenities without needing a ton of money. Money is just a tool. Think of it as if you were going to use a hammer to frame a house, money is the tool that allows the whole project to come out as planned. No one uses a screwdriver to frame a house. So using money as the right tool will make the job way easier and hopefully more fun.