When you think of a million dollar home, what exactly do you think about? Home theater rooms with plush seating? A refinished basement bar stocked to the brim with alcohol? A massive pool that a college frat house would be the envy of? Or do you just want the simple peaceful life of a house with a mountain or water view?Regardless of what your dream million dollar house is, there is one thing we can all agree on when it comes to mind: can we afford it?
What is the true cost a of a million dollar home?
Believe it or not, all of what we mentioned isn’t actually the true cost of a million dollar home. Well okay, that’s not exactly true, the amenities mentioned certainly do help to rack up the value of a property, but when it really comes down to the actual cost there are three major things: location, location, location.
What we just said might only actually be one thing, but it’s so important that it should count as three. The location of your million dollar home could change it from the amount just said, to just $100,000—well, not $100,000, but certainly far lower.
Yes, if you plan on using marble to grace the entire layout of your 5,000sq ft. home, then maybe it won’t really matter exactly where your million dollar home is. But, if you use finishes and materials in a million dollar home that are typical of one—high-end of course, but not ostentatious—then you will see your home’s cost, and even value, drop.
For those of us that are considering a custom built home, we aren’t all that surprised about that: for the purchase of a plot of land is the first thing we consider when going in that direction. But for those of us that haven’t been considering that route until now; welcome to the Matrix. And no, you can choose the blue pill instead, it’s already too late; you know too much.
How do you afford a million dollar home?
The simplest answer? Make a million dollars. But of course, that’s not the only way to afford a million dollar home. Whether you choose to buy or build, financing is the way that most people purchase their home. Whether it’s a mortgage for a pre-existing home, or various types of loans—construction, contractor loans, etc.—the process may seem different, but purchasing either types of these homes isn’t all that different in the grand scheme of things. In fact, about two years into building a home, most loans—particular construction and contractor ones—are predetermined to turn into a fixed 20-30 year mortgage.
So, whether or not you can afford a million dollar home comes down to three reasons—and no, it’s not only location this time. How much money you make, the amenities in your home—or in a custom built home’s case, the materials and labor going into it—, and of course the crowd favorite: location.Believe it or not, you don’t have to make $1 million to afford a million dollar home, but you still have to earn quite a bit.
As far as the amenities or materials and labor, that all depends on your personal preference. Whether you want to have a frugal million dollar home (does that even exist?) or one that King Louis the XIV would envy, that all depends on you. But remember, if you splurge on what goes in your home, you’ll need to offset somewhere else. In most ways, this ends up being your location. As with most areas, some of the most wanted locations tend to also have the best school districts, best public transportation, best; just: everything.
But, so long as these things don’t matter to you—and if private or boarding schools are an option for your children—then sometimes setting up roots in an up and coming neighborhood with a nice plot of land might be the way to go. In this way, you’ll be able to not only help make a neighborhood better than it once was, you’ll be able to have all those amenities and materials you only dreamed of having before.
Kanler is a tech-savvy, design and service focused builder with projects in 7 US states. With a suite of online tools, providing customers the best in convenience and transparency, Kanler stands out from other general contractors. Find out more about these new designs, trends, and technology, and the Kanler advantage at www.Kanler.com, or call us at (844) 208-9300.