The Big Finish
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You’ve worked up plans for your new home. You’ve found a log style you like. You’ve even set an overall budget. The hardest part of creating your dream home seems to be over.

Yes, some of the tough decisions are behind you, but what about the cost of outfitting your home?

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Beyond the basics like walls, wiring, plumbing and labor, you have to decide how much you’ll be able to spend for essentials such as windows, and niceties like a whirlpool tub.

Because log homes are custom homes, it’s impossible to find a universal budget equation that you could easily apply in any market and for any floorplan or log style.  For example, one person might spend far more than the average home buyer on top-of-the-line kitchen cabinets or appliances, but choose relatively inexpensive flooring. Still, there are some steps you can take to get closer to a realistic number.

1. Look at Averages
One way to figure how much you can allocate for finishing your home is to look at what others have spent. To get a sense of average costs, we turned to Peter Rosi, owner of Jim Barna Log Systems Midwest in Brookston, Indiana. The company sells nearly 50 log homes annually and completes turn-key construction on many of them.

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Peter provided an example of a budget developed by a recent Illinois client. “The products we specified weren’t top end and they weren’t low end,” Peter says. “They were right in the median—good quality products that weren’t too expensive.”

The bid worked out to $120 per square foot, for 2,742 square feet of living space with a full log garage of 576 square feet and an unfinished 1,884-square-foot basement.

The projected total cost for the home was $400,214, with a $25,000 contingency for a general increase in material costs because the client won’t be building for another two to five years.

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Peter provided an example of a budget developed by a recent Illinois client. (See Cost Breakdown at right.) “The products we specified weren’t top end and they weren’t low end,” Peter says.

“They were right in the median—good quality products that weren’t too expensive.”

The bid worked out to $120 per square foot, for 2,742 square feet of living space with a full log garage of 576 square feet and an unfinished 1,884-square-foot basement. The projected total cost for the home was $400,214, with a $25,000 contingency for a general increase in material costs because the client won’t be building for another two to five years.

2. Consider Labor Costs

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Labor costs can vary greatly, by geographic location (the closer to urban areas you are, the more expensive labor rates are), by time of year (spring and summer are busy construction months with a corresponding increase in rates) and by access to tools and talented craftsmen.

Upscale amenities and materials also affect labor costs, because they usually require a more talented craftsman to install and complete them.


Think of the cost in labor between installing a pre-hung, steel-front door that two workers can install in an hour versus a handmade 6,000-pound, Brazilian hardwood front door that will take a team of 12 to install.
 

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Is there any way to gauge labor costs in a particular area? 

“Generally, the labor cost for a log home in a given market will parallel the labor costs for creating any conventional custom home,” advises Lynn Gastineau of Gastineau Log Homes in New Bloomfield, Missouri.

 “I would suggest that buyers begin by contacting custom home builders in their area to determine labor costs on a per square foot basis for a ballpark estimate.”


3. Assess the Options
Costs also vary according to the quality of the materials you use.   Equipped with all the bells and whistles, a 1,200-square-foot log cabin can run three times as much as a larger home that is modestly appointed.

What’s important is to realistically assess the factors affecting cost, notably the prices of the features and materials you want.

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There is a huge spectrum of products available: Do you want an $800 Frigidaire refrigerator or a Sub Zero that costs $15,000?

Unless you specifically request a certain quality level or a product by brand name, your contractors will deliver “builder’s grade,” which is the least expensive material that is acceptable to the majority of buyers.

Contractors do this to be as price-competitive as possible.

However, before you accept builders’ standards, discuss the work to be completed with each contractor and ask for a clear explanation of their standards as well as other options you may have. In this way you’ll know what to expect in the finished product.

4. Prioritize and Pare
Even when you have a rough plan for allocating your budget, you will likely end up wrestling with choices on amenities and options. This is where you’ll need to make the tough choices.

To help in your decision process, start by making a list of the five

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things that are most important  to you–based on your lifestyle today. Then try to figure out a way to incorporate them into your new home.

This process also will help you identify features that you are willing to sacrifice. If, for instance, you think you’d like a home gym, but you don’t currently work out on a daily basis, it’s questionable whether your habits will change enough when you move to warrant the expense. That money might be better spent on an activity in the home that you currently enjoy—like a home theater system, a library for quiet reading or a sauna in the basement.

“I call this process the ‘rather thans,'” explains Shanna S. Sheppard, an account representative with M&T Mortgage Corp. who previously built custom log homes for 25 years. “Home buyers have to decide whether they, ‘like to have this in their home, rather than that.’ It’s a matter of weighing their lifestyle and priorities and coming up with solutions that are right for them.

“I advise them to trust their contractor and do their research and comparison-shop on every item that goes into their home. That’s the best way to come up with an accurate budget.” 

Charles Bevier is editor of Building Systems Magazine, a nationwide trade magazine that profiles innovative construction technologies.

The Multiple Myth

Some log home producers suggest that the cost of completing your home will be a multiple of the price of your log package. Depending on which company you talk to, that multiple can run from three, to four, to five times the cost of the package.

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However, these multiples rarely translate from one company to another. They also aren’t an accurate way to predict what you will be able to afford, simply because they don’t take into account your personal taste in options and amenities.

This said, to provide an idea of the percentage of the costs that go into completing a log home, we contacted M&T Mortgage Corporation of Lancaster, Pennsylvania. M&T has a special division for handling construction loans and mortgages for log and timber frame homes.

Loan officers at M&T selected 15 construction loans at random and analyzed draw schedules to determine how buyers allocated their resources. The figures from M&T include the labor and materials for everything from initial site work, to buttoning up the house and obtaining a certification of occupancy. No land costs are included.

The home packages were from 15 different producers. In seven cases, the home buyer hired a general contractor to complete construction; the other eight buyers acted as their own general contractor and hired subcontractors to complete the home. On average, the homes were 2,200 square feet. An analysis of these 15 homes reveals the following averages:

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Home package alone:  40 percent of the total construction cost

Site work: 35 percent of construction budget. (includes clearing the site, excavation, and installing driveway, foundation, utilities—electric, water, sewer—and landscaping)


Rough mechanicals:
12.5 percent of total construction cost (includes plumbing, electric, and heating and cooling systems)

Finish work: 12.5 percent of total construction cost (includes stairs, kitchens, baths, flooring and trim work)

Click here for information on Finding Your Piece of the Rock.
Click here to learn about Financing Your Log Home.
Click here for your lesson in Logs 101.
Click here for advice on how to conduct a Wood Care Check Up