Guide To Kit Homes: Pros And Cons, Types, How To Get One

With its manicured lawn and spacious build, the McMansion has long been upheld as an aspirational ideal for prospective homeowners. However, with the rise of nontraditional homes and a growing emphasis on affordability and energy efficiency, building your own house kit could be the perfect choice for you.

Kit homes, also known as prefab homes, allow homeowners to be as hands-on – or off – as they choose, while still achieving a custom build at an affordable price. There are many things to consider when it comes to building, and living, in this type of home, and in this article, we’ll explore just that.

What Is A Kit Home?

What if you could design a home of your choosing and add it to your cart?

Though a bit more complex than that, ordering a home kit isn’t too far off. A kit home is a customized, mail-order home that’s built off-site by a manufacturer and assembled on your property upon arrival. A cheaper alternative to building a house from scratch or buying a house outright, these homes can be a smart way to save some cash or allow homeowners to achieve a custom build without too much micromanaging.

Like modular or manufactured homes in concept, kit homes differ by providing more flexibility and customization options for the home buyer. While most modular or manufactured homes come in blocky styles that tend to err on the smaller side due to their mass production, house kits can accommodate most any home style since they are custom ordered. Whether you want a cozy cottage or a sleek contemporary home, a home building kit should be able to meet your aesthetic wants and needs.

How Much Does A House Kit Cost?

The same way that the cost to build a traditional home will vary in price based on the size, layout and location, so will kit homes. Though any kind of prefab home will cost you less than a standard home purchase or outsourcing all of the materials for your own build, there are still notable costs to consider before buying your own house kit.

When shopping for a kit home, home buyers will typically look at different floor plans offered by a manufacturer. And while many bare-bones house kits could cost you as little as $10 per square foot, this figure doesn’t factor in many other essential costs. It’s likely that the cheaper your kit home price, the more work – and money – you’ll have to invest down the line.

An average kit home will likely cost $40 – $60 per square foot, which is still much more attractive than a typical home’s $90 – $150. However, here are some of the other fees and costs that are essential for a safe and happy kit-built home: 

• Labor: While this number can vary depending on the complexity and size of your build, and where your site is located, you can expect to pay around $130 per square foot for labor. However, it’s not unusual for labor to cost twice as much as the kit itself.
• Land: It may seem obvious that once you have your home, you’ll need a place to put it. Like traditional homes, lot prices vary on size and location, but you can expect to pay about $4,420 per acre. Purchasing land, though more affordable than purchasing a home, can still be costly. Luckily, you can purchase a lot with a land loan, which is similar in nature to a mortgage loan.
• Utilities: When browsing kit homes, their prices do not reflect the additional costs of gas lines, sewer mains, water and electrical services. Each of these are separate jobs you’ll need to contract out to ensure a high-quality and safely completed job – these costs can run you anywhere from $550 for a natural gas line and up to $3,200 for a sewer main installation. Prices will vary based on your location but it’s best to invest in a job well done.

The Pros And Cons Of Building A House From A Kit

Whether a kit home will be well-suited to you and your lifestyle boils down to your own unique preferences, situation and vision for the future. To better understand what this type of home has to offer, and where they might fall short, let’s look at some of their pros and cons:

Pros

A few pros associated with building a house from a kit include:

• Save money: Since materials are ordered in bulk and delivered to a factory, building a kit home is generally more affordable than building a traditional home. In fact, house kit floor plans for bare-bones designs can come as cheap as $30 per square foot.
• Move in faster: House kits are generally delivered in a matter of weeks, meaning your home can be quickly and efficiently built. Furthermore, since all necessary materials arrive together with instructions for every step of construction, build time for a kit home tends to be fast. Considering these factors, you could move in faster than you would with a traditional home being built from scratch.
• Fully customizable: Customize your dream home on a budget with a house kit. By purchasing a prefab home, you are in control of the layout, materials used, etc.

Cons

Like all things good, there are drawbacks associated with purchasing kit homes including:

• More coordination for the homeowner: Since your home is being built from the ground up, you will likely find yourself getting calls from contractors for coordination plans.
• Manufacturer shipping limits: Most manufacturers have a delivery limit of 750 miles, give or take. If you prefer the floor plans offered at a manufacturer in Utah but you live in Texas, you’ll have to pay expensive delivery fees to receive the kit.
• Not regulated by HUD: The industry is in a new boom, which means nothing has been standardized industry-wide or regulated by HUD. A full kit may include a foundation and interior design for one company, while for another, it won’t even include drywall. Do a lot of research before making your final decision.

Types Of Kit Homes

Like traditional homes, prefab homes come in different shapes, sizes and floor plans. Here are just a few ideas to get you started:

Cottage

These small, single-family homes can be placed almost anywhere – from quaint suburban neighborhoods to private wooded areas. These lumber-sourced kit homes typically range from $20,000 – $30,000 for a one-bedroom floor plan or $50 – $80 per square foot, but just for the bare-bones materials. For those of you who want to feel closer to nature, log cabins can be a great secondary home getaway or help you take steps toward a more sustainable lifestyle.

Studio 

Although kit homes are great for primary residence, they’re hardly exclusive to full-time dwellers. If you’re interested in making a passive income through rentals or subletting, want a guest house to accommodate visitors or you simply want to expand your home in a unique way, a studio home kit can be an economical place to start.

These small, detached additions to your home can be built custom for your space and needs with single room studio kits starting around $10,000 and larger builds starting around $30,000.

Contemporary

Visually modern as the name might suggests, these sleek floor plan options offer sizable, open spaces that can be great for new homeowners with families or fur babies or those who just want room to spare! These larger builds are probably most similar in size and style to a traditional home and their base price starts around $40,000 for the kit alone.

How To Get A Kit Home

While every journey looks different, the process of purchasing a kit home generally resembles the following:  

1.Obtain Financing

If you do not have cash on hand, you may need to finance your home. Since most manufacturers do not offer financing options, homeowners can turn to mortgage lenders for assistance. Getting a mortgage on a kit home is no different than building any other house, but some lenders will not extend a loan offer unless you have plenty of equity in your land. Also keep in mind that unless you can pay for labor upfront, you might have to consider using a construction loan to finance the costs of building your home.

Rocket Mortgage^® does not offer kit home mortgages at this time.

2. Choose Land

Of course, you’ll need a piece of land to build your house on. Buying land to build a house is no different than any other large purchases, as you can pay upfront or obtain a loan. Keep in mind that you can purchase a lot with a land loan, which is separate from the mortgage you might use to purchase your house kit.

3. Choose Your Kit Home

Just like purchasing a traditional home, it’s crucial that you take your time choosing the kit home that works for your family. Take your time, weigh your options and make the choice that just makes the most sense.

4. Research Companies

There are several different kit home manufacturers to choose from. Do your research to determine which can provide you with what you’re looking for.  

FAQs On Kit Homes

You might still have a few questions regarding kit homes, so here some answers to the most commonly asked.

What is a modular home vs. a kit home? 

Most people use the terms modular home and kit homes interchangeably, but they are completely different housing choices. Most notably, modular homes are built in a factory and delivered to a plot fully assembled. On the other hand, kit homes are delivered to a lot in pieces to be assembled.

How long will a kit home last? 

Contrary to popular belief, kit homes are actually just as durable as any other house. You can expect prefab homes to last for 50+ years.

Are kit homes considered sustainable or green? 

Generally, yes. In fact, most prefab homes are built with sustainable, eco-friendly materials.  You can certainly create a green home by taking extra steps, like adding solar panels or using an energy efficient HVAC system.

Do kit homes come with a warranty? 

It depends. Some manufacturers offer up to a 10-year warranty for prefab homes, while others may not. It’s important you do your research to learn what your chosen manufacturer provides.

The Bottom Line: Build Your Dream Home On A Budget

As values like energy efficiency and affordability have grown increasingly important to homeowners over time, kit homes have become a real contender for many first and forever homes. Whether you want to save money or get your hands on a custom home without breaking the bank, this house style could be a great fit for you.

Remember to do your homework and research both your local ordinances and local kit home manufacturers before taking the plunge, and connect with an agent today to get started on your home purchase journey.