Why are Rausch Coleman houses so cheap? Is it because they don't have gas?
"In northwest Arkansas, most of the houses this company offers do cost about 90 - 110 dollars per square foot.  The exceptions use the Whitney plan, which has the following design features (and/or problems) which happen to save the builder a lot of money: One very nice feature is the U-shaped stairway in the center of the house.  It is easy to find, and has an angled landing.  It might be a bit narrow, though. Does the builder bother to put rebar in the brickwork?  Arkansas is in earthquake country. What are the floors like?  Is the first floor a slab concrete floor with vinyl flooring (and/or carpet on thin pad) immediately above the concrete?  Is the second floor bouncy, due to using long-span joists of code-minimum size? Does the builder bother to make the rear windows look as nice as the front windows?  As mentioned earlier, the builder only bothers to have one side window. Where to learn more: Fernando Pagés Ruiz is a Nebraska homebuilder who wrote a book on Building the Affordable House: Trade Secrets for High-Value, Low-Cost Construction (The Taunton Press, 2005).  He has also written many articles in Fine Homebuilding, including ""Building Affordable Houses"". True North Consulting specializes in helping builders eliminate waste and ""value-engineer"" their designs.  True North often works with Tim Garrison, the self-proclaimed ""builder's engineer""." A 25% variance in price, in most markets, isn't so crazy as to require it be some sort of terrible scam, but that doesn't mean much else. It could be the inclusion of floor plans that are carefully designed to add square footage at minimum cost and thus reduce the average cost per square foot without actually being cheaper otherwise, less insulation, thinner walls, cheap piping, minimized wiring, or they are just efficient and competitive. As you pointed out they don't have gas, so that's certainly one way you know they cut costs - no gas lines to install! As the article from NAHB: Cost of Constructing A Home points out, though, what this figure includes can vary. Does it include the finished lot? If so then a smaller lot would mean lower square footage building price - because the land is smaller and cheaper, not the house!  Is any kind of financing quoted in the price? Compare also change-plan costs, any penalties for delays in construction, grade of materials, floor plans, customization costs, fees or premiums to pick colors/floors/counters/cabinets/fixtures, and so on. What about central cooling and heating - are they quoting an electric furnace? How does electrical heating in your area compare to the cost of gas heat? (relative pricing of electric and gas vary widely by region and climate) In short: often square footage price isn't the whole story of what it would cost to construct a home. Ensure you are comparing everything that's important to you and you are getting a full quote, not comparing small isolate sales-pitch figures with no clear details. If it turns out the price is 25% lower than other builders in your area and they give you what you are wanting, and you have the good sense to have a qualified home inspector and/or structural engineer inspect the home thoroughly before you take possession, then you might just have found a good builder! I'd encourage you to personally visit some of their past construction work, such as houses they build 2-10 years ago and ensure they are in the sort of condition you'd expect. I am a realtor and work for Rausch Coleman and can answer this question for you. We are a production builder. We build in communities with typically 5-9 Floorplan options per community and a select set of option and finishes that we offer. Because of the set options, we buy the materials in bulk and are able to receive cost savings on that from our suppliers which we can pass on to you. We use the same trades consistently through out our division which means they have our plans and process down to a science. They know the product, which means less likely to make mistakes and less likely to miss things. Our heart is affordability in that we understand that not everyone can afford granite, gas, hardwood floors, etc. so we allow you to be able to customize your monthly payment, and that you are not financing something you may not want or need or to allow you to get in to a home you may not be able to afford otherwise. We work a lot with the first time buyer and we want to provide the best quality for the best value. We start our homes at a base model and allow you to customize the way you want (adding granite, gas, hardwoods, fireplace, etc.) and in doing that we allow you to choose whether you want to pay $90 or $101 per square foot or whatever that may be. I can tell you in Northwest Arkansas we are the best value and the quality shows. I pull comps consistently and in fact have another builder in the same community as I sell in. Our homes in this community for single stories is about $88-$95 and two story homes are on average $78-$86.  Two stories are more cost efficient in that the square footage goes up and not out so there is less concrete, which is one of the most expensive parts of the homebuilding process. This other builder consistently sells their homes for $101-$105 per square foot, and uses the exact same materials we do. The difference? Yes granite and hardwoods and gas and custom cabinets come standard, you have no choice in that. Would you rather have the option for a lower priced home if you didn't want granite? Or if you'd rather have carpet? We build in 5 different markets over 4 states and are in our 61st year of business. I'd love to meet with you and can walk you through a community and show you our homes (at all stages of construction) where you can see the product and quality in our homes. I am in our Dixieland Crossing community here in Northwest Arkansas. You can check out our website for other information at www.rauschcoleman.com The reason Rausch Coleman homes are generally cheaper, is because they are a high volume dealer. Their communities usually have 5 to 7 floor plan options only. They get exceptional deals on their materials because of the volume of material bought. They have it down to a science when it comes to the numbers. As far as the quality of their homes, I cant answer that. I have never been in one or known of anyone that has bought one. Not only are they high volume but also most finish materials are very basic. For example lighting fixtures, most builders put ceiling fans in all bedrooms ($75) where Rausch coleman uses a flush mount ($15) in the spare bedrooms.  Same with flooring they use a vinyl plank where most builders use wood. This can be $1sqft or more cheaper. Cabinets, carpet, tile, countertops, faucets, all they same. These are all cosmetics and you can save a ton of money while building by doing this and still build a quality home. Rausch Coleman builds a quality home at an affordable price by keeping the cosmetics basic. They are cheap because they are made from cheap material.  All the homes in my addition are Ruasch Coleman and a lot of them are having issues (Oklahoma).  Several are around 5 years old and have already had to get new roofs.  On our neighborhood FB page there have been complaints with the plumbing system and flooding in yards that weren't leveled properly once the ground settled.  I know I regret my purchase.  You get what you pay for. Research the company that is all I can say this company has horrible reviews. They show on their Facebook page great reviews but if you really look through all reviews the high ratings are from past and current employees. All other reviews from actual home owners are bad. They make a lot of false promises and build very cheap homes that will not last without several costly problems within the near future. Most people that buy one of their houses sell it within a few years because they start having so many problems. They have outside vendors doing all the work and do not make these vendors very accountable. I know I was a manager with Rausch for several years. STAY AWAY! I have lived in my RC Home since 2008 and I have had ZERO PROBLEMS! We are in the process of building another RC home in a different community. The only thing I've done was replace the roof ONLY because of a very bad hail storm (baseball sized) that came through OKC. My mom also purchased a RC home in 2007 and didn't have any problems. What buyers have to do is be involved the whole time before, during, and after the build. Take lots of pictures of the entire process if you can. We went by our build daily (we didn't live that far), but if you can go by your build at least once a week, it helps. During my inspection, there was a hairline crack in the baseboard and it was corrected immediately. If you have a good inspector and sales rep that genuinely cares, you will be just fine and will love your home. Good Job RC HOMES! I walked into my sister's new Rausch Coleman house this afternoon to help her move in and told her to make sure that they put on the hot water heater room door in the garage on when they come back to take care of the final touch ups. I also said and don't let them forget to paint the garage because I noticed while driving through her neighborhood that everyone had taped and mudded garages but no paint. She told me that Rausch Coleman was not coming back to do any touch ups. I said what about this stuff?!?!!!!! My sister said the house does not come with a door for the hot water heater or the garage being painted. Are you SERIOUS?????? That's like not putting the covers on your electrical outlets...your kidding me that this does not come in the base package. Shame on you Raush Coleman. Your prices are not that cheap to not include that. That is what I call bad customer service and ripping off your clients. The paint job is hideous. Let's just say my 9 year old could do a better job than that. The mirrors in her bathrooms are not hung centered and is so obvious.  She went to open her dishwasher and it came out of the hole because it was never anchored down.  I could go on and on!!!!!! Do not use this builder!!!!!!!
I converted my downstairs of my house to a suite with an eye to AirBNBing.  But I also make money renting it out (I live in a resort town with ridiculously high rents).  So far, I haven't tried AirBNB because renting it out on yearly contracts seems like less total effort and I make 1100 gross per month (net is probably closer to ~800)  I have no idea if I could make more on AirBNB.  Maybe one of these years I'll try it for a few months. I live in suburban Washington DC.  The houses in my old neighborhood that  used to sell for $500K to $600K were renting for about $2,500 because that's all the market could bear.  My mortgage was about $3,100 but I could never have rented it out for that.  Owners were taking a loss every month just to keep the house.  Like I said earlier though, that same house is now only worth $328K.  They're still renting for the same $2,500 per month that they did before the value plummeted.   I did downsize a bit when I moved to my new house.  Went from 4 very large bedrooms to 4 moderate bedrooms (1 is kinda small) and went from 3 bathrooms to 2.  But the plot is much larger now than my previous house.  Before felt like a McMansion and now it feels like a cozy cottage but I'm sure a lot of that is my perception of the whole situation. I lucked out and bought a beat little 640 sq. ft. bungalow in S.E. Mass for short money in 2008 hoping that I'd be able to build up some equity and upsell into a nicer house (i.e. one with more than three rooms and a roof that doesn't leak).   The good news (I guess) is that I'll be paid off in just a few years, but the bad news is that this little bungalow will have to do for a long time. House prices in the places that I'd like to live are through the roof, and if you're not a cash buyer you're pretty well fucked. I can't afford to sell without the hope that I'd be able to actually buy another house. So like any market, the housing market will *on average* trend upward. But the extreme prices we're seeing in Toronto or San Francisco are not part of the normal market growth. There's a lot of factors that can affect housing outside of just increased demand. Here's a few of the big ones.  1) Low-Interest Rates: Since (2008? I think) interests rates have been really low, meaning mortgages are really low. If you can borrow money at 4% and the inflation rate is 8%, you've borrowed expensive dollars and are paying back in cheap dollars.  2)NIMBY (Not in my back yard): If you have enough land to build 10 houses or one 100 apartment building, what do you build? Theoretically the apartment building, but in reality, the people that already paid for their million dollar house, don't want a giant apartment complex bringing down the value of the neighborhood and ruining their views. So they pass laws preventing new and bigger buildings, meaning higher prices for the homes that already exist. And as a bonus, it's easier on the city to have 10 people who make a million dollars a year than a 100 people who make 100,000 a year.  Foreign investment: So there's a lot of places where people have money, but because of corruption or shaky economies, it's not safe to hold it there. So you buy properties in the U.S. or Canada because you know no one's going to seize it and it's (generally) not going to lose value. So you end up with foreign dollars competing with the local markets for housing, driving the price up. Houses depreciate. Period. Things break: the hot water heater explodes, the AC cuts out in August, the roof leaks, the basement floods, toilets back up, raccoons dig up the garden. Each time something breaks, the house loses value. Every year the paint fades a little, the house loses value. Every time GE comes out with a more efficient washing machine, the house loses value. The only reason a house appears to maintain its value over time is because the money you spend repairing and improving it offsets this unavoidable depreciation. Even then, over extended periods of time it will typically just track inflation--so you're treading water. Not that there's anything wrong with that. You need to live somewhere. The market can only bear so many high-priced mini-mansions. It's like a car dealership trying to sell Lexus and BMWs in a neighborhood where everybody can only afford a base model Honda.  There is plenty of housing, but not enough housing that is affordable. There was a house for sale at around $400k or $500k if my memory serves me posted to /r/Boston a little ways back that was from a poorer city in Massachusetts that was covered in bullet holes and was totally trashed inside. It had been spray painted and was missing a raised porch from one of the upper floors so this door just opened up to nothing. Yeah, the federal gas tax has been 18.4 cents per gallon since I think 1920's and states add another 20 to 55 cents per gallon, but it is nowhere near enough to cover costs.  And I grew up in Illinois, nothing has changed much (I don't remember when we didn't have a former governor in jail). Thanks for the feedback obelus,   The cost is $20,000 to 50,000 sqft.   Ya I am just looking for a rough idea of what a similar newer building is costing I figured what we are paying is really high as the building is extremely old and designated as a heritage site so we can't just knock it down. Beautiful building just not very efficient.   The newer building is the route I think we are gonna end up going not sure what we can do with the current building as not too many options for resale. We can't adjust the lease rates to compensate for the cost as the tenants are all seniors and it is an integrated care home. A change to apartments would prove difficult as there are no kitchens in 90% of the suites.  We are currently paying approximately $0.40 psf a month to heat (All electric) and the estimate for the new building is $0.1425 psf (Geothermal) so it is a pretty huge impact in comparison if it is possible but I haven't heard of a real building actually costing that little before.   Thanks for the suggestion for the IR I think I am gonna get some one in after the holidays to do a inspection to see if there is any short term fixes we can do with our system. How do prices of an apartment/house correlate to prices becoming more manageable in manufactured goods?  I could also say that  housing is not a good proxy seeing as how prices in housing differ depending on where you live.  I can also point out that more is going into buildings like double paned glass and better materials which would also raise prices on your home.  Yet a computer is much better than today than 35 years ago, and the exact opposite thing happened.  I can also say that there is less timber today than 35 years ago, making the price of wood go up.  I can also get into boring things like Bid Rent Theory, but what's the fun in that?  Nearly all manufactured goods have gone down in price.  Thanks to more open robust trade. This is the exact reason I don't live in an expensive city.  I turned down a job offer in DC paying 60k right out of school because I could get a similar salary in the midwest and pay about half as much in living expenses.    --Sent from a 2 bedroom apartment in an urban area with included laundry facilities for $750/month. "It depends on the area, but right in Toronto there's not a whole lot of development, but like starter townhouses (3 storey, modern/executive look, around 2000sq ft) start around 750k. Older and run houses, depending on area can go from 600-1.4 million, but it's heavily dependent on area. In a ""good"" area, you'll see completely run down shacks going for 1.4 million. I'm not sure exactly who's buying these houses, but banks aren't giving as many loans now, so I assume people are going private for mortgages. There are incentives for first time home buyers where you don't need much of a down payment (it was around 10%, but I think it's gone up), however something called ""mortgage insurance"" is required, in the case of a default. Rent is sky high as well, and rentals are just as expensive as mortgages, however without the ""commitment"". Cheap rentals never come up, and there is sort of an internal issue with realtors who essentially hike up the prices, however things have cooled off as of late.  I always remember my parents saying that we good do down to the states and buy a house for less than 100k, especially after '08. Houses just seem to have more value in Canada, even in less sought after areas more north" It's tricky to calculate what us Europeans pay equivalent to US 'gas' (petrol) prices.   I currently pay about €72 for ~42litres of petrol.   Heard on the radio that we pay the equivalent of ~$9/US gallon for petrol.   Why haven't the Germans gone all electric with their Mercs and Beemers? With the prices we pay it would make even more sense over this side of the pond. It's strange to wait for Tesla to mass-produce the electric car.  Shorter average distances too mean shorter commutes, so the range issue of batteries is also more favourable to European geography. Chances are since college is your next likely step I would recommend saving up for it.  Start building an emergency fund. Recommended $1,000 minimum. To start building your credit rating (when 18) get a low interest low limit credit.  Pay off the balance every month. Starting to build your credit rating now can save you hundreds of thousands when buying a house over the course of paying it off.  ie. cheaper interest rate. As for investing, the sooner you can get started the better.  Acquire preferred/stocks/bonds/REITs/ETFs/etc that pay you to own them (they pay you dividends monthly/quarterly/etc).  Stick with solid stocks that have a history of consistently increasing their dividends over time and that are solid companies. I personally follow the work/advice of Derek Foster.  He's not a professional but he retired at 34.  His first book (Stop working - Here's how you can) is great and recommend it to anyone who is looking to get started. Also check out Ramit Sethi's blog I Will Teach You to be Rich. He focuses on big wins which save you a lot over the long term.  He's also got some great advice for students as well. Best of luck! While volume per trade is higher at the open and to a lesser extent at the close, the overall volume is actually lower, on average. Bid ask spreads are widest at the open and to a lesser extent at the close. Generally, bid ask spreads are inversely proportional to overall volumes. Why this is the case hasn't been sufficiently clearly answered by academia yet, but some theories are that