How Much Does It Cost To Build A House In 2020?

Many people have a dream house that they have wanted to live in since they were a child, but sometimes, that house either doesn’t exist or isn’t on sale; or maybe you are looking to build and sell houses to make money.

Whatever your reason, there are many costs to building a home and it can obviously be very expensive. Before we get started, it is wise to first understand what the expected costs are so that you can properly budget for your entire project. Obviously, there is a significant amount of variance in figuring out the cost for the project due to variables such as city laws, labor laws of your state, land prices, size, and design.

Given the range for what something may potentially cost when building a new building, it is difficult to directly state the cost of your project through blanket statements; however, getting a ballpark from online sources such as this one is a good start, and there is also further importance in having a checklist of expenses when getting started.

Related: Mezzanine Loans – Everything you need to know

What are the expenses you should expect when building a new home?

In 2017, the National Association of Home Builders (NAHB) provided the average cost to build a house $237,000.

Cost to build a house in 2017
Source: NAHB

They did this by conducting a survey that gathered information from 4,267 home builders of the average price each given phase of a house building project and also surveying for the average size of all the project.

This survey was conducted specifically on the construction of single family homes. They found that the average construction cost of all the projects was around $237,760. They also found that the average size of all the projects was 2,776 square feet, and the average lot size used was 11,186 square feet.

Though price varies between house to house, using the costing provided by the NAHB is a good benchmark for understanding the price of building a house. To answer the question of how much you should expect for the cost of building a new house, this NAHB average will be referenced several times.

Related: How Does Rent to Own Work in 2019?

Site Work Expenses are an Important Cost to Build a House

neighborhood top down view site work house building

Site work expenses include a bunch of potential different expenses that you must pay, usually as a result of some sort of regulation. This includes things such as building permit fees, impact fees, water inspections, sewer inspections, landscaping, land clearing, and possibly more depending on your situation.

Site work expenses have a massive variance as but ultimately is mostly reliant on the number of square feet that your property is using, and the amount of professional work needed. For example, if you are needing to clear land the average cost would be between $1.28 and $2.00 per square foot. If you have a special case such as having greatly uneven terrain to build on, it may cost you an extra $15 per square foot to even it out. We recommend you get a full site plan before building the house.

If you are in a wooded area, the price will also be increased considerably. If you have an abnormal case, it would be wisest to refer to your contractor to figure out any other unaccounted costs. To reference the NAHB study has noted that the costs of site work include, building permit fees, impact fees, water & sewer fees/inspection, architecture/engineering, and some petty cash used for miscellaneous items that may pop up. The NAHB study found that, on average, this portion of the project cost home builders $15,903.

Foundation Expenses

Framing will set up the skeleton of your house, effectively creating the physical representation of what a home’s blueprints would display. This will frame the outlines for all the spaces within a house and show the size of every given room that you are planning to have in the house. NAHB has classified this section of expenses to include framing (including roof), trusses, sheathing, general metal, steel, and once again a small section for miscellaneous purchases that may be needed.

Like everything else when building a house, square footage is a large factor in the cost of framing; however, the number of rooms, doors, windows, and walls will also play a large role in the overall cost of framing the house. All said and done, NAHB has found that the average cost of framing will total $41,123. So don’t forget to include framing in your cost to build a home.

Related: Best Places to Buy a Home in Southern California

Exterior Expenses

After the framing of the home is completed, there is structure provided by the framing that allows for the construction of the exterior to begin. Forming the outside of the house before the inside will allow the water system, electrical system, gas system, etc… to be given better structure when that part gets built. The NAHB’s exterior expenses include the costing for exterior wall finishes, roofing, windows, and doors (including garage doors).

The exterior expenses of a house are actually more dependent on the overall surface area rather than the raw square footage of a house. Furthermore, the price of your exterior expenses will increase with more doors and windows that need to be installed. For exterior expenses, the NAHB has found that on average, home builders should expect to pay $33,066 to get this part of the project done.

System Installation Expenses

brown brick building air conditioners installation

Once the exterior has been established, system installation can proceed to provide the house with modern necessities such as water and electricity. The system installation expense scales on the number of rooms that are expected in the final product of the house. The level/grade of heating, ventilation, and air conditioning (HVAC) that a building has will also make a substantial difference in the cost of system installation. Overall,

NAHB has included plumbing, electrical, HVAC, and small category of miscellaneous purchases as the factors that make up system installation expenses. The final cost of system installation should cost $32,746 on average.

Interior Finishes Expenses

kitchen installation

Among all the categories of expenses, the expenses of the interior finishes are probably the largest aggregate cost of any section of a home building project. The interior finishes close up all the open wires and pipes. This part of the project allows the home to be substantially more aesthetic along with making it a much more livable space.

Obviously, a home should include rooms such as restrooms, kitchens, and most of the time a means to install a room for laundry and dryer. Interior finishes also complete the plumbing and electrical for the house as it installs all the light and water fixtures such as ceiling lights, sconces, faucets, toilets, showers, and other related items.

Some houses may be built with a fireplace which adds another extra cost. For interior finishes expense, the NAHB survey categorized the following as components of interior finishes: Insulation, drywall, interior trims, doors, mirrors, painting, lighting, cabinets, countertops, appliances, flooring, plumbing fixtures, fireplace, and miscellaneous purchases add to the cost of building a home. The NAHB found that on average, the interior finishes expense usually totals about $67,939.

Final Steps Expenses

Once a home is built, finishing touches must be added allowing for the house to be more presentable. These are usually additions that are done to the exterior of the house such as a driveway, mailbox, porch, patio, and lawn. According to NAHB final steps expenses are broken down into the categories of landscaping, outdoor structures (deck, patio, porches), driveway, clean up, and miscellaneous purchases. These final touches will cost the home builder an average of $16,591.

Is There More to the Cost of Building a Home?

In many projects, there are unique cases and instances that will require the home builder to make extra purchases that are not part of the standard categorical purchases involved with building a home. According to the NAHB, these purchases average out to cost about 2% of the total project with an average cost of $4,722.

Related: House Hacking Real Estate with an Airbnb Investment Property

The Other Costs to Building a House

The above explains the costs of building a house from a construction point, but when you are building a house, there are more costs involved that should not be forgotten. The cost of constructing a home makes up roughly 55.6% of the total cost of building a house, from production to sale. If you plan on personally living in this house, only some of these costs will apply to you, but if you are looking to build and sell a home, all the following costs should be noted (costs are based on NAHB averages):

Finished Lot Cost (including financing cost); $91,996:

This is the second largest cost to building a house. If you want to build a house, you must first find the land/lot to build the house on. Lot prices have significant variance and is hugely dependent on your state and area. It is hard for you to hold a lot of expectation with the use of this average.

Financing cost; $7,636:

Unless you plan on paying for your entire project up front in cash, you will likely need to finance the project. With that in mind, almost any time you decide to finance something, the act of financing will raise the cost of the purchase.

Overhead and General Expenses; $21.835:

If you are in any business, there are expenses that exist as the ongoing cost of operating the business. This cost, in respect to the costing averages made by the NAHB makes up about 5.1% of the entire cost.

Marketing cost; $5,314:

In order to sell your finished product, you must list the house and set up advertisements for it.

unfinished modern home with wood floors for sale

Sales commission; $17,448:

When selling the house, chances are you will be using a broker. Any time you use the services of a broker, they will take some commission based on a percentage of the sale.

Profit; $45,902:

Obviously, if you are trying to make a business off the building and sale of a house, then you are going to need to place a mark up on the final price of the sale.

When everything is said and done, the average sale price (combining all the above costs, construction costs, and profit) is $427,892; which is roughly $154.14 per square foot.

Related: How to Find Out Who Owns a House

Should you Really Build Your own House in 2020?

If you are trying to save money when building a house, using the services of Zumbly can be very helpful. Zumbly assist you in finding fixer uppers, calculating ROI, and also rating houses on their expected investment value. Fixer uppers can really come in handy incase of emergencies during or after the construction of your building.

Using Zumbly before building a house may allow you to do building comps on other high value investment properties so that you may try to imitate the successes of other buildings. Zumbly will also help you with figuring out what areas have stronger demands for houses allowing you to be able to locate the home you are building in a much more ideal location. Using these comps and ROI calculator, you will have a much easier time deciding how you want to invest your money as it will show you what is most optimal for you.

Related: The Ultimate Beginner’s Guide On How To Find Investment Properties Using Zumbly

What happens when you break a lease?

You need to move before your lease is up. The idea itself may make you break out in a cold sweat. You’ve always heard that it is a terrible idea to break a lease, but why?

Is it expensive? Does it affect your credit? What if you have a good reason?

Don’t want to lease anymore? See how much homes for sale in your area by signing up for Zumbly.

Keep reading to find out all about what happens when you break a lease. The consequences might not be as dire as you first thought.

Related: Best Real Estate Tech Startups

How Do Leases Work?

a sign that says rent

Leases can be long-term or short-term. Year-long and 6-month leases are common, but some can run for several years and others can be month-to-month. Sometimes a lease will start out for a year and then turn into month-to-month at the end of that year.

Even if the lease is month-to-month, your landlord will still require notice when you want to move. Usually, you have to alert them at least 30 days before your next payment is due. In other words, you usually can’t give notice for partial months.

What happens if you need to leave your lease early? This will depend on the terms of your lease.

Make Sure You Read the Lease

First up is to find out what your lease says. There are general guidelines that most leases follow, but they are not all exactly the same.

To find out what happens when you break your lease, look for the “lease termination” or “early release” section. Some leases may state this is not possible, but even so, you may have options.

Related: House Hacking: Live for free with an Airbnb Investment Property

Potential Consequences of Breaking a Lease

With prices going up leasing can get very expensive. Here’s an infographic showing renting prices skyrocketing.

Source: Apartment List

Let’s look at some common consequences that you could face for breaking a lease early.


Most commonly, breaking a lease will cost you money. When you break a lease, the landlord loses money, so most contracts are set up so that you take the financial hit rather than them.

Some leases contain a set fee you have to pay to break the lease. In many cases, this fee is quite expensive to deter you from breaking it. Plus, the fee makes it worth it for the landlord if you decide to break your lease anyway. The fee you pay will cover their expenses to find a new tenant and make up for any lost income.

In other cases, you may have to agree to continue to pay rent until a new tenant is found. The landlord is also obligated to make a reasonable attempt to find a new tenant, but it could still take a month or two, or even longer.

A Lawsuit

By breaking a lease, you’re breaking a legal contract. This means that the landlord has the right to bring a lawsuit against you if you don’t handle things well.

Most of the time, this doesn’t happen, especially if you’ve been a good tenant. Your landlord typically won’t want to waste time in court any more than you do.

The best way to ensure that this doesn’t happen is to abide by your contract and follow whatever the landlord is willing to agree to allow you to do.

Sick of leasing? See how much homes for sale in your area go for on Airbnb by signing up for Zumbly.

Trouble Renting Anew

Many landlords will call up your previous landlords to get an idea of your track record. Discovering that you’ve broken a lease makes them wary of renting to you. They don’t want you to do the same thing to them.

This is where good communication with your landlord can make a difference. Explain your situation. Get on their good side. Then when a potential new landlord calls up, they’ll have only good things to say about you.

A Credit Hit

It’s also possible that your credit score could take a hit if you break your lease. However, this usually happens in cases where the tenant doesn’t pay the required fees. Then those fees become an unpaid debt that can be sent to collections and appears on your report.

Don’t want to lease anymore? See how much homes for sale in your area go for on Airbnb by signing up for Zumbly.

Break a Lease with No Consequences

a plate breaking

There are a few instances when you can break a lease and not be held responsible in the eyes of the law. These include:

Active Military Members

All states have laws that allow tenants to get out of their lease if they enter military service or are deployed before the lease ends. As soon as the tenant receives word of their deployment, they are to give notice to the landlord along with a copy of the orders.

Month-to-month leases then end 30 days after the next rent payment is due. Longer leases end on the last day of the month after the month in which you give notice. For example, if you give notice on April 14th, your lease will end on the last day of May.

Domestic Violence Victim

Not all states recognize being a domestic violence victim as a legal reason to break your lease, but many do. You usually have to provide at least 30 days’ notice and something that proves you’ve been a victim of domestic violence within the last 3 to 6 months. A protective order or something of the like will do.

Breach of Quiet Enjoyment

Landlords have the duty to ensure that you have a peaceful, safe place to live, known as “quiet enjoyment.”

Many landlord behaviors can be considered breaching the tenant’s quiet enjoyment. These include:

  • Entering the premises without warning
  • Allowing illegal activity (or engaging in it) on the premises
  • Not addressing the poor or dangerous behavior of other tenants under the landlord’s control

Of course, what constitutes a breach of quiet enjoyment is subjective. For that reason, you shouldn’t just break your lease citing this as your reason. Consult with an attorney first to see if you genuinely have a case and learn how to proceed legally.

Constructive Eviction

The law also gives tenants the right to livable housing. In legal terms, this is called the implied warranty of habitability. Basically, the landlord is responsible for providing a decent place to live. Standards include:

  • A structurally sound building
  • Functioning electrical, plumbing, heating, and other systems
  • Addressing known environmental hazards (mold, asbestos, lead paint dust, etc.)
  • Addressing rodent or insect infestations

Though the list of what it covers differs, almost all states give tenants this implied warranty of habitability. Landlords cannot ask you to waive these rights or put anything in the lease contract negating any part of this. Even if they do, and you sign it, that piece of paper will not be legally recognized.

Looking to buy instead of leasing? See how much homes for sale in your area go for on Airbnb by signing up for Zumbly.

If the landlord fails to fulfill this duty, they have in essence “evicted” you. They cannot force you to live in a subpar home. You can then break your lease and claim constructive eviction.

Again, don’t do this on a whim. Talk to an attorney first, not only do the laws differ from state to state, but the conditions for constructive eviction can also be subjective. For example, you cannot see one rat and claim that the unit is infested with rodents, and you must leave immediately.

Ask Nicely

Asking nicely isn’t a legally recognized method of getting out of your lease, but it can be effective and is worth the try. Particularly if you have been a good tenant, your landlord may be willing to work with you if you need to break your lease.

Conversely, if you’ve been a horrible tenant, your landlord might be thrilled to get rid of you, but let’s hope that’s not the case.

Leasing is cool and all, but buying a home is where it’s at. See how much homes for sale in your area go for on Airbnb by signing up for Zumbly.

How to Get on the Landlord’s Good Side

There are a few tricks you can use to get on your landlord’s good side and make them more willing to work with you. Let’s look at a few tips here.

Give Notice

As soon as you know that you need to move, notify your landlord. Giving them a couple of months’ notice is far more helpful than only a couple of weeks.

Pay for Advertising/Find a New Tenant

Additionally, you can offer to help fill your place. It’s not always easy to find a new tenant, and advertising is one of the costs the landlord can incur. Being proactive and taking that task off their plate will make them more willing to work with you.

Plus, remember that we mentioned you might have to pay rent until a new tenant is found? Offering to help find a new tenant ultimately is good for you too. Marketing your apartment will probably be far cheaper than paying rent for a couple of months or more.

Clean the Property

Give the property a deep clean and keep it picked up and clutter-free. It will be easier for the landlord to find a new tenant if they have a nice-looking property to show.

On top of that, be willing to allow the landlord to show the apartment while you’re still there. With luck, you can time your move-out date with a new tenant’s move-in date, and you won’t have to pay much extra.

Related: How much does it cost to build a house?

A Home of Your Own

Now you know what happens when you break a lease. At the very least, you’ll have to pay your landlord’s expenses for finding a new tenant. In other cases, you’ll have to pay the rent for the remainder of your contract.

Regardless, it is all money down the drain. In fact, renting is always money down the drain. You’re helping somebody else pay off their mortgage rather than working on paying off your own.

If you want to find a great home then sign up for Zumbly.

Renting is nice for when you know, you’ll be moving around a bit. But nothing beats having a home of your own. When it’s time to leave, you get to sell it and recoup some of those monthly expenses. With a rental, you’ll get your deposit back if you’re lucky. If you have to break your lease, you could be on the hook for a lot more money.

The 10 Best Real Estate Tech Startups in 2020

Real Estate tech startups are ready to shake things up in both residential and commercial real estate ventures, and in this article, we’ll be taking a look at ten of the most innovative companies in the real estate sector.


It’s estimated that Americans move every 5 years. While you could rent your home if you decide to move to another one later, will it really be worth doing? The truth is that sometimes a property is just not worth renting, and if you find that out too late then it can ruin your future plans.

Zumbly wants to help buyers to make better home choices. Their site generates a real-time score which will tell you important information that can help you determine how much your property could be worth both in the long term and the short term.

This allows you to more easily turn your starter home into a profitable Airbnb or long term rental when you decide to upgrade, helping you to build wealth rather than debt.

Related: How to Start an Airbnb Business With 5 Easy Steps Using Zumbly


Finding a place to rent, especially if you’re moving to a new city for work, is beyond infuriating. To help ease this pain, Rentberry has created a platform that helps to streamline negotiations between landlords and potential tenants.

The platform’s transparency has made it popular with renters, and its ease of use has attracted busy landlords struggling to manage their properties. Rentberry has grown past its US offering and now operates internationally, but they still have plenty of room for growth.


Reali pays their real estate brokers a salary rather than have them work on commission. That means that sellers pay a flat fee, potentially saving themselves $20,000 in fees that would otherwise be lost to a real estate company.

How can they do this? By using technology to allow buyers to perform self-guided tours and other services themselves, freeing up the agent’s time and allowing them to do more for less.


Real Estate agents are expected to be a lot of things, including professional photographers for their listings. Unfortunately, they aren’t, and taking amazing photos is not as easy as it looks. Not to mention the time involved in creating the type of masterpieces that sell houses.

That’s where Virtuance comes in. This company is actually an all-in-one photography company that vets and dispatches professional photographers, does image quality control, uploads the images to the MLS listings and even provides traffic stats for the listings.

Related: 10 Best Real Estate Investor Websites in 2020

Modern Message

Any landlord knows that good tenants are worth their weight in gold. So, how do you retain those tenants? By offering them exceptional experiences with Modern Message.

This platform allows landlords to incentivize their best renters who pay their rent quickly and online, advertise their properties on social media and offer reviews. These renters earn rewards for doing so, and landlords gain valuable interactions.

Thanks to this useful tool, Modern Message was named one of 2017’s fastest growing startups by Inc, and they aren’t done innovating yet. They continue to ink reward deals with other startups, like Wag, which will offer dog walker rewards to renters.


Everyone wants to be a landlord until they realize how much work it is. Even if you employ the help of a property management company, it’s possible that you’ll end up at a loss once all your expenses are tallied, but what if you were guaranteed a profit?

Rented offers that guarantee. They are so sure of their product that they promise you a guaranteed annual income. If they don’t meet it, they’ll cover the difference. Plus, Rented takes care of everything, making owning a rental property a truly hands-off experience.


For many homeowners, upgrading from their starter home to a new property is a tricky dance. Most will need to sell their current home first and then scramble to close on the new property. It’s enough to make you want to rip out your hair, but Knock has the solution.

This company will give homeowners looking to “trade in” a cash offer, and allow them to move into their new home before selling their old one. This company helps buyers every step of the way and eliminates a major paint point for moving to a new home.

Related: House Hacking: Live for Free With an Airbnb Investment Property


For many Americans, getting a loan can be increasingly difficult, especially when you need a large down payment. While “rent to own” is nothing new, in many cases, it was previously fraught with worries over shady landlords and deceptive deals.

Enter Divvy, a startup that allows you to purchase any home on the market as a rent to own deal. They require only 2% down and they cover any other costs involved with the deal, making it a great option for families who have income but don’t have a down payment. Plus, if you end up getting a mortgage at the end of the lease they’ll give you $10,000 for a down payment.


Most leases are for a minimum of 12 months, and you could end up owing some big fees to your landlord if you need to move unexpectedly for work or personal reasons.

Flip removes that headache for you by assisting people with finding qualified individuals to sublet their rentals and even negotiating with their landlord for them! They even have automatic payments to make sure their sub-letters are paying.

Flip raised $2.2 million in their seed round last year, and they’ve processed thousands of dollars in rentals every month. They are currently operating in New York, San Francisco and Los Angeles, but they have plans to extend to more locations soon.

OJO Labs

AI is everywhere, and soon it will likely be taking over real estate as well. Thanks to the internet, it’s easy to buy or sell a home without the need for a real estate agent at all.

However, if you’re looking to buy, then you’ll be missing a key component of that relationship. A real estate agent gives you personalized recommendations and helps you find the perfect home, but could a chatbot do that job?

OJO Labs thinks so, and they’ve raised $45 million to develop their real estate chatbot. This software not only gives recommendations based on your preferences, but it can also answer questions about the listing.

You can ask it details about the house’s layout and features, or you can just sit back while OJO delivers the perfect home to your phone via push notifications every time a new home comes on the market that matches your criteria.

OJO labs also acquired WolfNet, which gives the company access to 100 million property records, greatly expanding the reach of the tool.

Related: What is a Good Cap Rate for Rental Properties in 2020?