Making a house location

Hello! I have a question because this is my first time when I’m designing a location with a house with interior. I just don’t know how to start with modelling, how is it done in games like RE7 for example? Do I have to model each separate wall and then arrange the whole house like a jigsaw puzzle or can I model the whole house as a single mesh and then texture it in substance (or Unity if it’s a better idea)?

Less parts = less draw calls is always faster. Create a texture atlas and apply it to the model.
If you want to get up and running the fastest too id even suggest creating the overall shape of the house, and then compound boolean the rooms, windows and doors, that way you wont get any seams or cracks. You can always adjust the vertices after you finish to fine tune the sizes of things. Add window frames ect later from a clone.