The ultra-stylish bloggers at PrairieMod turned me on to a story in Kiplinger’s, which details the process that a couple went through to get their dream prefab home. I liked this article for two reasons: (1) they talk about the prefab process in terms of tangible, financial figures, and (2) they go through some of obstacles and intricacies particular to prefab purchasing and construction. With many articles on prefab, authors glorify the design (which makes sense because many of them are extremely stylish) and harp on the price. With prefab pricing, it seems that the common wisdom is that prefabs are cheap for custom-built, architect-designed homes, but they are expensive when compared to a traditional home.
Regardless, I still believe that prefab has the power to revolutionize and commoditize site-build tasks that are wasteful, thereby producing cost savings in resource, labor, and design. I’m brainstorming a business plan for this right now. Here are a few points that this article makes:
- Prefabs Require Unique Financing – as opposed to the traditional mortgage loan and its many variations, prefabs require a construction loan or a construction-to-permanent loan. Why? Some banks aren’t educated on the value of modular, modern, factory-built structures and they’re worried about the note collateral.
- Factory versus Site Finish-outs – sometimes it may be more difficult to get contractors to do the work on site and they may charge a premium. Depending, it could be more beneficial to get as much of the home built at the factory as possible.
- Panelized versus Modular – there’s a difference. Panelized prefabs have sections stuffed with wiring + insulation; they are trucked to the lot, more customizable, and cost a little more. Modular prefabs are built in units of entire rooms or bigger and can be constrained by highway travel (12 x 12 x up to 64?). Modular prefabs are likely to be less expensive.
- Pricing – prefabs are 20-30% cheaper than custom homes designed by the same architect, but they’re more expensive than tract-type, suburban homes.
- GIVEN – prefabs are not on the same planet as manufactured homes.
The McGlasson Home: Pricing
The McGlassons purchased an Alchemy Architects plan for a 780 square feet prefab. Alchemy outsourced the construction to a Wisconsin manufacturing factory (6 weeks). The actual home: $95,000. Delivery + crane costs: $6,000. Contractors connected the house wiring to the grid, dug a well, and did the finish-outs: $59,000. Total cost: $160,000 (including fixtures + appliances, not including land). Not bad.
Fabulous Prefabs: Save $ With an Upscale Dwelling [Kiplinger's]
Wrap it Up + Make it Home (10 Popular Prefabs Comparison) [Kiplinger's]
Article tags: Development, residential