My husband is not yet ready to retire to our ranch house so we started out with a building plan of 4 years. We would start the construction in two years’ time. That’s now changed as we thought why not let our new ranch house become a second home for vacations. We can live in our current home until he is ready to retire and enjoy the second home as much as we like each year for vacations.
Our Retirement Ranch House For Vacations
The reality is we cannot wait to get there. Both from a retiring point of view but also wanting to enjoy the area we have chosen before then. We cannot wait to take our dogs to the huge lake to swim every day. There’s a mountain to climb, trails to hike, areas for skiing and trails for snowmobiles. To us it’s the ideal vacation spot so what are we waiting for?
We’ve already started looking at ranch house plans and have identified a few we like. A random thought came to me, why not build our ranch house now and use it for vacations? Ok so it’s a 15-hour drive but we’ve done more than that and if we share the driving and make one overnight stop on the way, it’s not that bad at all.
We spend the next few days discussing the idea and decide to reach out to the professionals to see if this is a viable option. We’ll need a builder and a lender.
The Second Home Plan Takes Shape
If this was to be a full-time vacation home we would likely look at smaller ranch house plans. However as it will become the primary residence in time, it needs to be a larger family home with considerations for many things:
- I always think of re-sale because I am in real estate.
- The style should conform to the neighborhood.
- Western ranch or mountain ranch plans are more in style, as are log cabins and Craftsman.
- I don’t like the log cabin style ranch house designs. My husband does, I win!
- Although a mini ranch, we are not going to have cattle! A garden is more my style.
We reach out to a local builder with a few questions and the ranch house that was taking shape literally gets tossed in the trash. We need to start over.
The issue is we live in the midwest, we’ve also lived in Florida. We combined our favorite plan into a slab-built ranch house. We have a full basement in Illinois that is just not used. We don’t need it. Here’s the problem.
A slab-built ranch house in Wyoming weather almost guarantees the slab will move, crack or both. The reason being the amount of snow that stays on the ground. We have the same weather in Illinois but the snow does not hang around for as long, and most houses here are built on a basement.
There were a couple of other issues but essential we needed to find a ranch house plan on a crawl or with a full basement. He also recommended a stick frame built property, so we could make last-minute changes easily.
Searching for a New Plan
When you search online house plans to find the perfect choice, believe me when I say it’s impossible. Every one of us considering a new home build is going to have a list of things you must have, the things you want and things you wish for. Just like buying a home on the resale market you can never have everything.
Note: We built a custom home from scratch including the plans. An architect drew what we wanted. When we moved in, guess what! Still, things we missed or wanted to change.
We are looking at online plans as a way of saving money. There are thousands of choices. The plan may need some changes and will not have everything your town or county needs, but that’s for good reason. Every location has different rules and types for HVAC, plumbing, heating. So online plans do not include those things. Your permit will need them. So when you have your plan you’ll need your chosen builder to add them before submitting for a permit.
This may sound counter-intuitive. What’s the point of buying plans online if you need them changed? Simple. Cost reduction. To start from scratch with an architect is expensive, much more expensive than finding an online plan and editing it. Modern ranch house plans should not require too many changes.
We review several new ranch house plans and decide for us the full basement option is the best. We get a smaller footprint above ground but end up with an additional family room or TV room in the basement and hoards and hoards of storage space. We want our ranch house to have an open plan stairway to the walkout basement.
How Much Does it Cost to Build a New Home
There are no simple answers. In my area, the rate is $150-$400 a square foot. That’s a huge swing. It all depends on what and how you are building and the level of your trim, type of basement, size of the house, types of windows and so on.
In different areas in the country, it can be cheaper and higher. The only way to find out is to ask a local builder with experience building a residential custom home and tell him everything you want. You can add or remove things to fine-tune it later. For now, you need to know a house plan you like and rely on local builders to guide you on the best products to use for the climate.
If you are going to finance your new residence, this is the first step. You need to understand the cost to make sure you can get approval.
Other items to factor into a new ranch house build are the cost of:
- In Process Permit Inspections
- Utilities that need to be run to your ranch house
- Well to be drilled if in a rural area
- Septic system to be installed if in a rural area
- Any specified items per any HOA
Tip: One thing I also learned was that the cost of a house type in one area may be the cheaper option, in another it may be more expensive. So never assume anything!
Financing A Second Home
Unless you have the cash to cover the cost of buying land and building a second home, you’ll likely need to find financing. This can be either:
- Taking out a HELOC on an existing home to fund the new one.
- Financing the second home just like you do any home purchase.
- Refinancing an existing mortgage to reduce your costs to help pay the new mortgage.
Mortgages on second homes are considered the same as for your primary residence. They are not the same as investment properties that you want to rent out. Conventional new construction loans are available now in 2019, the years of them being hard to find appear to have passed. However, you’ll need to have funds for the down payment. With excellent credit in 2019, you should be able to find a 10% down payment, with good credit you’ll need 20% for a down payment.
If you already own your land outright and have excellent credit, your lender may take the cost you paid for the land into account as your deposit.
For lenders, it’s all about the risk, so ask around, see what programs are available to you.
Our Ranch House Builder Needs to Be Approved
Remember the real estate crash in 2007/8/9? Remember the economy tanked, banks went bankrupt and took big loses in unpaid mortgages, and let’s not forget short sales? I do because I work as a real estate broker and survived the crash.
New construction took a huge hit with unfinished subdivisions, unfinished houses, foreclosures on half-built homes. The banks became very cautious and although lending rules have relaxed, some of the risks remain high on the list. New construction loans are one of them.
If you are going to finance a custom home, your lender may want the builder approved. They usually have a list of approved builders but don’t be surprised that your builder is not on the list. For us there are no builders on the approved list, so whoever we choose is going to need to be approved. We have been warned, this can take 120 days.
The result is we have started our process even earlier than anticipated. We have chosen our plan and reached out to local builders for advice and estimates.
Planing Your Ranch House Build Timeframe
Having a plan for your ranch house build is recommended. Even though we know nothing ever goes to plan, it’s easier to follow something rather than nothing.
Our ranch house build was brought forward at least one year because we decided we wanted to use it as a second home for vacations. Then it got brought forward another 5 or 6 months because the lender was going to need to approve our builder and there were no approved builders in the area. We had to factor in the approval time and breaking ground in a cold-weather environment.
On top of that our ranch house build needs input from both myself and my husband. As he travels a lot we realized his next quarter was loaded with travel overseas. We would miss breaking ground in spring if we waited any longer. So we jumped on some of the things we had to do immediately to get our ranch house build started.
It’s time to interview and pick our builder, no later than October 2019 if we want to break ground in spring 2020.
A custom ranch house build needs input all the time. It’s easier to change the schedule than not have a clue what stage you are at.
It’s also wise to know who is taking care of what so there’s no confusion. I have told my husband I want him to select the builder for our ranch house build. Everything after that falls into my responsibilities. This ranch house build is going to be fun, with a fair amount of travel as we are 1,500 miles away from the building site.