Cheapest Ways to Build a House: 11 Tips to Save Money

Posted by Dave Kotler on Thursday, April 3rd, 2025 at 10:50am.

The cheapest way to build a house is to make a careful budget, plan extensively, and make savvy choices. From simplifying your layout to thinking long-term, there are many ways to cut costs without sacrificing quality. If you’re eyeing new construction homes but need to keep costs low, use these practical tips to save money when building a house.

This is general advice. Always consult with a professional builder for cost-saving strategies tailored to your specific project.

4 Quick Tips For Building a Cheaper House

Create detailed plans: Include land costs, materials, permits, and labour in your budget. Construction loans require a detailed cost breakdown for lender approval. If your planning takes a while, update your numbers when you get close to starting the project.
Monitor spending: Use a live budget document to track expenses in real-time.
Prepare for changes: Leave wiggle room in your budget for unexpected costs because they’re guaranteed to arise.
Research local codes: Avoid delays or fines by understanding building regulations early.

Make a Plan & Stick To It: Avoid Change Orders

Change orders can be a major budget-buster during construction. These modifications to the original plans often involve extra labour, new materials, and delays, all driving up costs. Depending on what’s being changed and when, you might pay twice for parts of the project.

To avoid giving change orders, thoroughly plan your home’s layout, materials, and finishes before construction begins. Ensure you’re satisfied with your choices so you won’t need to make changes later. If surprises do arise, address them quickly and efficiently to minimize disruptions. Sticking to your original plan will help you stay on budget and complete your home on time.

DIY As Much As You Can

Doing some of the work yourself can save you a significant amount of money during the construction process. Tasks like exterior painting, installing fixtures, and landscaping don’t typically require advanced skills and can be completed with patience and practice. If you’re willing to learn, you might even take on more complex projects by watching tutorials or attending workshops, such as tiling or building a deck.

However, you want trained professionals to handle your home’s mechanical, electrical, and plumbing systems. Other tasks like carpet laying can be tricky or require specialized tools. Before saving money through DIY, honestly evaluate whether you have the time, skills, and energy to do the work properly.

In addition, you’ll want to check with the general contractor to see what tasks you’ll be allowed to do. Depending on the task, local building regulations may require you to obtain a license. Contributing to the build could also be an insurance liability for your builder, and allowing a non-expert to do tasks like tiling can cause delays in the build timeline, ultimately costing you money.

One way to circumvent the timing issue is to stipulate in your build contract where you want the work to stop. For example, you could ask the builder to deliver a bathroom roughed-in, leaving you to do the tile after the contract is complete. Ask the builder to leave these final touches out of the bid.

Simplify Your Home's Layout

A simple layout is one of the easiest ways to reduce construction costs.

Stick to straightforward designs: Choose a floor plan with square or rectangular shapes to reduce labour and material expenses.
Build up, not out: Building a second story is usually cheaper than building a larger footprint due to foundation and roofing costs. Similar rationale for why condos are cheaper than houses.
Keep it compact: Limiting your home’s depth to 32 feet or less avoids pricey roof truss designs.
Opt for standard sizes: Ready-to-assemble cabinets, countertops, and doors are less expensive than custom options. They may also be available in surplus or salvage stores.
Keep the roof simple: Multi-layered roofs look good but are harder to clean, maintain, and repair.
Put plumbing fixtures together: By keeping, say, a bathroom and laundry room near each other (horizontally or vertically), you’ll require fewer pipes. This saves materials and labour while reducing the risk of leaks and water damage.

Simplifying a smaller layout will save you a lot of money on construction and later maintenance. Even though some repairs are covered by home warranties, you don't want any surprises.Tiny homes and manufactured homes exemplify this, but they may not be eligible for the same kinds of loans as more traditional homes.

Choose Stock House Plans

Stock house plans are an excellent alternative to avoid the high costs of custom home designs. These pre-designed layouts are readily available online or through architectural firms and are significantly cheaper than starting from scratch.

If you need changes, stick to minor adjustments to keep costs under control. With stock plans, you can skip the lengthy design process and move straight into building, saving time and money.

Choose a Lot That Won’t Require Extensive Site Prep

Finding vacant land for sale can be one of the most expensive aspects of building a house. If the land isn't already build-ready, the cost of preparing a lot for construction can quickly escalate. Selecting a flat, level lot is ideal, as it eliminates the need for extensive excavation or grading. Lots with existing access to utilities like water, electricity, and sewer lines are also more cost-effective, as adding these connections can be expensive and time-consuming. If you’re buying land in British Columbia, research the property’s soil conditions and zoning requirements before purchasing.

On the other hand, you may be able to find cheap land that’s considered a “problem site,” such as an infill lot or a sloped lot, and acquire plans designed to accommodate it. Depending on the cost difference, this could enable you to live closer to an urban area at a lower cost. Land closer to metropolitan areas tends to cost much more per acre than land in rural areas.

Hunt for Deals on Materials

Finding affordable building materials can greatly impact your overall construction costs.

Online marketplaces and discount stores often have overstocked or returned items at significantly reduced prices. Discontinued construction materials may also be sold more cheaply. If you’re not concerned about minor scratches and dings, consider asking stores if you can buy floor models of appliances for a discount. Some suppliers will offer a builder’s discount if you’re buying an entire house’s worth of materials, so take advantage.

Salvage yards and auctions are excellent places to find reclaimed wood, bricks, or unique architectural pieces that can add character to your home without breaking the bank. You might even be able to walk away with free materials just by asking permission at a demolition site.

A word on reclaimed wood: while this is a sustainable option, it doesn’t necessarily save you money. The major cost of reclaimed lumber is processing it for reuse, so if you can prepare it yourself, it’s much more feasible. It’s possible to get desirable old-growth hardwood this way—just be sure you’re not reclaiming a treated wood that can have toxic off-gases indoors.

Buy Your Own Materials

Your contractors will often have connections with local suppliers, enabling them to get discounts. However, they’ll likely be working on more than one project at once, and buying multiple houses’ worth of materials is a significant financial burden. Consider negotiating with the builder and supplier to pay for the materials yourself.

Your builder may be willing to lower their bid for convenience, and the supplier may offer a discount if you pay cash upfront. Either way, you’d end up paying for the materials, so doing things directly can result in savings.

Be Flexible on Finishes

Budget Finishes Means Saving Money For What Matters

When building on a budget, choosing more affordable finishes upfront allows you to focus your resources on structural necessities. For example, opt for laminate countertops instead of quartz or granite or basic light fixtures and cabinetry. These choices can always be upgraded later when your finances allow.

Starting with budget-friendly finishes ensures that your home is move-in ready while leaving room for future enhancements. Focus on essential elements, such as durable roofing and windows, while staying flexible with less critical features.

For example, vinyl flooring makes a good underlayment for tile or wood flooring. Install vinyl now to save money, then upgrade later by installing better flooring. This approach helps you strike a balance between affordability and long-term satisfaction.

Act as Your Own General Contractor

Taking on the role of your own general contractor can significantly cut costs, often saving you over 10% by bypassing contractor fees.

You can save money by managing the building process while gaining direct control over construction costs and timelines. You can select each subcontractor rather than choose a builder’s preferred contacts. In addition, you’ll have more control over where and what materials are sourced, potentially leading to further savings.

However, be sure you know what you’re getting into. Successful project management requires understanding the construction process and choosing and coordinating with skilled subcontractors.

You'll need to obtain building permits, although some subcontractors might include this in their services. Securing builders' risk insurance is crucial to safeguarding investment and meeting legal requirements.

While acting as your general contractor demands effort and organization, the financial benefits can be well worth it.

Opt for Energy-Efficient and Durable Features

Making your home more energy-efficient from the start will help you save money in the long run. It’s true that they may cost more upfront, but you may be able to recoup your investment faster.

Insulation and windows: Proper insulation and energy-efficient windows lower heating and cooling costs.
Solar panels: Federal tax credits can offset upfront costs, making solar power more affordable.
Efficient appliances: Reduce electricity and water bills with energy-saving appliances.
Sustainable features: Rainwater systems and low-flow fixtures cut water usage by up to 30%.
Durable options: Metal or slate roofs are more expensive than asphalt shingles, but they can easily last twice as long without replacement.

These features save you money and make your home environmentally friendly. If you design your home to meet specific environmental standards, you could even be eligible for rebates.

Consider Modular Building

Modular homes are an innovative and budget-friendly option for constructing a house. They are built in sections, or modules, within a controlled factory environment and then transported to your property for assembly. This efficient process can save you time and money compared to traditional construction methods.

One of the biggest advantages of prefabricated homes is their shorter construction timeline. Since the modules are built indoors, work can continue regardless of weather conditions, avoiding costly delays. Simultaneously, site preparation—such as laying the foundation—can occur, further streamlining the process. This overlap can reduce construction time by 30% to 50% compared to conventional builds, leading to significant savings on labour costs.

Modular homes also benefit from economies of scale. Factories purchase materials in bulk, lowering the overall cost of construction. Additionally, the factory setting reduces waste and ensures precise measurements, saving on materials that might otherwise be wasted on-site.