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Homeownership Option 3: Building From Scratch
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Homeownership Option 3: Building From Scratch

When thinking about homeownership, you must research every step you take and think twice about every decision you make. The first choice you have to make when exploring homeownership is the path to choose, especially when cost is the biggest factor. And one such route to take is building your home from scratch. 

If you are specific about the kind of house you want or have the perfect picture of what your dream house should be, your homeownership routes are narrowed to only one option: build from scratch. Every other option, including the nine homeownership routes mentioned in a previous article, will involve you making compromises. 

In part 3 of the six-part series that will explore the common paths to homeownership in Kenya, this article will help you decide and understand if building a house from scratch is a good option for you, the pros and cons of this route, the pitfalls to avoid and everything in between. 

Financing Your Construction 

Construction demands high cash flow. Before starting, you must have enough cash to meet your budget. Any deficits will drag the project, forcing you to postpone deadlines. Here are some ways to fund your building. 

Construction Loan 

Using your land as collateral, you can apply for this loan to finance your home building. Before you apply, you will need to get a quotation from your constructors, a land appraisal, and building plans. You will submit these documents to a lending institution to get started. 

Liquidate Assets

You can also raise funds by liquidating and selling some of your assets. But before you do this, get a quotation and ensure the money you raise is enough to finance the construction. If it won't, you might want to hold onto the assets until you are ready. 

Compound Interest 

Once you receive a quotation, you can also start saving and investing towards a house construction goal. You could open a savings account that compounds your interest and choose investments that will mature within your timeframe and increase your income streams - factor in inflation and rising building costs when saving and investing for future goals. 

Read Also: Money Mastery: How to Set & Achieve Your Financial Goals

Jenga Pole Pole

You can also choose to build in phases. You start with the house foundation, take a month or several months off, and come back to erect the walls. If you pick this path, you should invest in dividend-paying vehicles and use the money you earn from your investment to fund your construction.

Read Also: Where Do I Keep my savings? The 7 Main Places to Put Your Savings

Joint Venture

Another option to finance your project is partnering with a real estate developer to construct a home for you. In return, you will pay the monthly rent until they recoup their investment plus profit. Alternatively, you can let them build extra units on your land to rent or sell in a joint venture partnership. 

Four Things to do Before Breaking Ground 

  • Have a Ballpark Budget: Although you should be guided by your budget at every stage of the way, putting a specific number on how much you will use might be impossible. Break down how much you want to spend on everything and be upfront with your constructors about your budget. You should also be ready to adjust your budget often. 
  • Know Your Neighbours: Before constructing a house, research your neighbours, especially if their plots haven't been utilised. Ask them how they plan to develop their land. You don't want to construct your house only for your neighbour to open a nightclub or garage next door. This is especially when you are building in an area that is not zoned for residential development. You may risk incurring huge losses if you have to abandon your house when your neighbours decide to build storeys of bedsitters sandwiching you. 
  • Hire The Right People: Perform extensive research on everyone you will be hiring, from the architect who will design your house to the plumber who will install your drainage. Get recommendations, read online reviews, and look at their previous work. 
  • Security and Storage: Before starting construction, hire a security guard to ensure your building materials and equipment aren't left in the open and exposed to thieves. Also, build a storage room on the construction site to keep all the valuable equipment under lock and key.

The Process of Building a House from Scratch 

The process of building a home can be a complex one, especially for first-timers. You will need to prepare for sleepless nights, arguments, missed deadlines, and all the confusion that comes with it. But in the end, it can be rewarding. 

Stage #1: Planning 

This stage states the moment you settle for this homeownership path and buy a piece of land. It covers everything from getting your finances in order, hiring your team of experts, designing your house, and getting all the necessary permits. 

Stage #2:  Groundbreaking and Execution 

This stage is the most vital and can be the most stressful. It will involve executing all your plans and building your home. How well the process will go will be determined by how well you were prepared. Nonetheless, prepare for disappointments. 

Significant issues you didn't plan for tend to arise here, and it is the most money-consuming of the four stages. You might suffer through everything from contractors experiencing supply chain issues, bad weather, or personal emergencies that will affect your schedule and budget. 

Stage #3 Tracking and Reviewing the Project 

You can't afford to leave all the work to your constructors, sit back and relax. Even if you have hired someone to oversee the construction i.e. a project manager, you will still need to visit the site to review the project, track progress, and ensure everything is on schedule and budget. 

Since most mistakes happen during construction, this stage will ensure you pick them up early and ask your constructors to rectify them. It helps keep the project in the direction you had visualised in your planning. 

This phase runs concurrently with the entire building phase. It begins when you break ground and ends when you move into your new home. 

Stage #4: The Closing Phase 

This is the final stage and the one you've been looking forward to. Your house is complete, and you are ready to move in. But before that, you will need to contact your local County government to inspect the home. You will be offered a certificate of occupancy if your house is up to standard and meets all the building codes and laws. 

Once you receive the certificate, you can move into your new home. 

Should You Build a Home from Scratch? 

With many paths to homeownership, it can be hard to decide which one to take. Constructing your house might allow you the luxury of deciding on all the minor details, but it's not the route for everyone. Understanding its advantages and drawbacks will help you make a more informed decision. 


1. You can customise your house and get the exact house you want. 

2. You get to decide where to build your house as you choose the land's location. 

3. You will pay less money in maintenance fees as a new home requires few repairs. 

4. You can build equity as a new house has a long lifespan and higher value. 

5. Construction loans can be cheaper to service compared to mortgages. 


1. Building from scratch can be more expensive than buying a ready home and will include paying a lot of fees. 

2. Getting a construction loan can be challenging, especially if you are building for a non-commercial reason or outside an urban area. 

3. Building takes time, and the whole process can last a year or more.

What to Consider Before Building a House 

Location: Your location will determine how much you spend on construction. For example, building in a rocky and rural area can be expensive as you'll account for transportation costs of building materials. Getting a construction loan can become a very uphill task when building in rural areas. 

Future Needs: You need to keep the future in mind when building. Consider your family size, career progression, etc. Factor in the resale value as well. How much will it fetch if you decide to put the house on the market? In the same breath, think long-term. Will the house you are constructing be your retirement home? 

Read Also: How to Plan for Retirement While in Your 30s

Your Career and Lifestyle: Will you be hosting guests or working from home some days? If that is your plan, you might want to ensure you build a guest room and home office. All this will help you determine how large you want the house to be.

Environmental Issues: Investigate how safe the neighbourhood is, if the drainage and sewage system works, proximity to amenities like hospitals, etc. This will dictate your quality of life after building your house.


Building a home from scratch can be a rewarding accomplishment but can also be time-consuming. If you choose this homeownership path, it might affect your productivity levels. 

You'll need to invest a lot of time in macro managing the projects and ensuring everything goes according to plan. Reducing your work hours or taking a break from work might help you speed up the work and prevent losses. 

While hiring only the best contractors is advisable, you should ensure you hire those you can afford or waiting until you can afford the right ones. Getting quotations and interviewing different contractors will help you save money in the long run.

Read Also: Homeownership Option 1: Buying a Ready House - All you Need to Know

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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