End the Moving Target: Modular Homes and the True Cost of Construction

By: Rich Allen


I like watching those half hour reality shows where an amateur house flipper purchases a house and expects to flip it in a week. Almost 99% of the time, their budget and timeline shift. In part it's because of their inexperience, but partly that's the nature of home construction. There is the expected cost and the real cost. The estimated cost is derived in an average-case state of affairs and the true cost is frequently much higher because of delays and interest rates.
Building a home from scratch onsite is an exercise in costing a moving target! If the home builder takes out a construction loan, the interest is ticking by with every day… whether the schedule is on time or not. (And the schedule is rarely on schedule!). Delays cost money in interest, but they also cost money in wasted people-hours (for example, if you employ a team of people but they can't do the job because of the conditions, you likely have to pay them anyhow).
Modular homes decrease the risks related with the moving target of cost. When someone purchases a modular home, they select a floorplan with a price. That cost is carefully calculated and agreed to, with no surprises.
Next, the home is built in a controlled environment where rainy weather doesn't hinder construction.
Then, the home is delivered and erected in just a couple of days, which eliminates the costs linked with renting equipment (and having it sit idle during downtime).
Because of these reasons, and additional reasons also (which you can read about on my blog and throughout the site), modular homes are a great deal more
effective to buy than stick-built homes.

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Michael Zenga, the Modular Building Specialist, founded ZN Custom Building www.zncustombuilding.com, in 2002 which specializes in building modular homes in the Boston, MA area. He holds a Bachelor's Degree in Business Administration from Boston University and Master's Degrees from Boston University, Harvard University, and Bentley College.

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