Budgeting for a Custom Home in Middle Tennessee: What You Need to Know

Why Budgeting Matters Before You Build

At AXIS Construction, we believe that a great custom home is built twice: once on paper with an honest, transparent budget, and then again in the field. Too often, buyers start with only a “price‑per‑square‑foot” number, only to find out mid‑stream that site costs, hidden fees, or overlooked details can add tens of thousands. By planning your all‑in number upfront, including land, site development, and construction, you’ll build smarter and with greater confidence.

Want to know what to look for when finding land to build on?
Check out Part One of this series!

Start With Your “All‑In” Number

The most important step in budgeting is defining your maximum total investment – not just home construction costs, but the entire project. Your budget should include the land purchase, all site prep, utility connections, permits, and even your landscaping.

A complete all‑in budget should cover:

• Land purchase price
• Site prep (clearing, grading, erosion control)
• Septic/sewer, water, and power
• Driveway/culvert(s) and access
• Permits, inspections, and utility fees
• The home itself (design, engineering, finishes, construction)
• Landscaping or outdoor hardscape
• A contingency buffer (3–5%)

How to calculate it:

1. Define the maximum you’re comfortable investing.
2. Subtract land cost (actual or expected).
3. Estimate site prep and utility/permit allowances.
4. The remainder is your construction budget.
5. Hold back 3–5% as a contingency.

This top‑down approach keeps spending aligned and prevents costly surprises halfway through the project.

Site Costs vs. Construction Costs

Separating your site costs from your construction costs is the key to keeping budgets on track. Too many homeowners fall into the trap of overspending on finishes, only to realize they’ve eaten into the money reserved for essentials like septic, utilities, or driveway installation.

Site Costs (Before the Build Even Starts)

These are often overlooked but unavoidable. Clearing, grading, rocky excavation, septic or sewer connection, long utility runs, driveway access, stormwater control, and county permits all fall into site preparation. Depending on location and topography, these expenses can range from modest to significant.

Construction Costs (The House Itself)

Once the site is ready, you move into the home build: foundation, framing, roofing, siding, windows, systems (plumbing, HVAC, electrical), insulation, drywall, trim, flooring, cabinets, fixtures, and final paint. Design decisions and architectural complexity will significantly affect cost per square foot.

Keeping these two “buckets” separate ensures clarity and avoids unpleasant cuts to must‑have site work when making design or finish selections.

Don’t Rely on Price‑Per‑Square‑Foot Alone

You’ll hear broad averages thrown around in conversation, like “custom homes are about $200 per square foot.” The truth? Those numbers typically only include house construction and omit land, site work, long utility runs, driveways, and permitting.

Architectural complexity, finish selections, and site conditions mean two homes with the same square footage can have very different budgets. That’s why we always recommend using total‑project, all‑in numbers instead of a per‑square‑foot generalization.

Plan for Land Development Early

Many buyers underestimate the impact that land development has on their budget. Even a “good deal” on acreage can create headaches if the site requires heavy prep.

Common budget derailers include:

• Long utility runs from the road to the build site
• Rocky excavation or blasting
• Septic system sizing tied to soil and bedroom count
• Steep or complex driveway access
• Drainage solutions for stormwater management

Understanding these factors before finalizing a purchase sets you up for success and helps avoid projects stalling—or ballooning costs—later on.

Always Include a Contingency

Construction is dynamic. Weather delays, market shifts in materials, and last‑minute design changes happen. By setting aside 3–5% of your total project cost as a contingency, you give yourself breathing room and keep the build moving without sacrificing quality.

Financing Options to Consider

Building a custom home often requires construction‑specific lending instead of traditional mortgages. The most common paths are:

• Construction‑to‑Permanent Loan (One‑Time Close): One approval, one closing. Funds draws during construction then converts into a mortgage at completion. Interest‑only payments during construction.
• Lot Loan + Construction Loan: Ideal if you purchased land separately before deciding to build. Requires two approvals and closings but offers flexibility on timing.

Axis Construction routinely works with local lenders familiar with custom building’s unique draw schedules and inspections, guiding clients through the financing step with ease.

Must‑Haves vs. Nice‑to‑Haves

Budget discipline isn’t just about dollars – it’s about priorities. Identify your must‑haves early: structural design choices, window quality, energy‑efficient mechanical systems, and the building envelope. These protect long‑term comfort and home performance.

Your nice‑to‑haves, like premium finishes, specialty trim, or outdoor extras, can often be phased later or upgraded over time. By focusing on essentials first, you stay on budget without compromising quality.

The Axis Desk Estimate (Free After First Consultation)

To eliminate guesswork, Axis Construction offers every client a free Desk Estimate after your initial consultation. This tool consolidates land, site, utilities, construction, and recommended contingency into one preliminary line‑item overview.

What you’ll get:

• Initial consultation to set land, square footage, finish level, and timeline.
• Site review using available data (topography, utilities, soil/perk results).
• A detailed Desk Estimate separating site vs. construction costs.
• Clear next steps: design path, budget alternates, or even land reconsideration.

The result: clarity before you commit, not costly adjustments after you’ve already started.

Frequently Asked Questions About Budgeting for a Custom Home in Middle Tennessee

Q: What’s a realistic contingency for a custom home in Middle TN?
A: We recommend setting aside 5–10% of your total all‑in project cost as a contingency. This buffer covers unexpected factors like weather delays, material price changes, or small design upgrades you decide on mid‑build. With the right contingency, you can handle surprises without compromising quality or your construction timeline.

Q: Is the Axis Desk Estimate really free?
A: Yes. Your Desk Estimate is complimentary after your first consultation with Axis Construction. This detailed report consolidates key factors – land, site prep, utilities, and construction – into one preliminary budget. It allows you to see your true all‑in cost before spending on engineering or plans, giving you confidence and clarity before moving forward.

Q: Does price per square foot include land and site work?
A: No. A “price‑per‑square‑foot” figure usually refers to just the house construction itself: foundation, framing, finishes, and fixtures. It doesn’t account for land purchase, site clearing, utility connections, driveways, or permits. For accurate planning, you need an all‑in budget that combines both site development and construction costs.

Final Thoughts

Budgeting for a custom home in Middle Tennessee requires honesty, planning, and a clear look at all the moving parts: land, site, utilities, and construction. With the right approach, and an experienced team, you can avoid pitfalls, build smarter, and create a home you’ll love for decades.

At AXIS Construction, our goal is to help you know your true all‑in number from day one. That’s why our clients build with confidence and why their projects stay enjoyable from initial planning to move‑in day.

Schedule Your First Consultation

Ready to budget your dream home the right way? Schedule your first consultation with AXIS Construction and receive a free Desk Estimate – your clear view of the all‑in costs before you commit.

Call us at (615) 985‑2222
Or reach out via our Contact Page