Building a House vs. Buying a House: Which is Better?
One of the most common conundrums experienced by those in the market for a new place of residence is whether to buy or build a home.
The decision is not one to be taken lightly, as building or buying a house is likely to be one of the biggest investments you make in your life. Both options require a substantial amount of time, energy, and money, but each has certain benefits that may appeal to different people depending on their financial standing, family size, needs, and overall lifestyle. A few other factors you should weigh during the decision-making process is location, market trends, property taxes, and homeowner association fees, among others.
Build Versus Buy
The two primary advantages of buying an existing home, according to an article on Investopedia.com, are cost and convenience. After being pre-approved by a lender, you can work independently or alongside a real estate agent to sift through the market in your desired location. Depending on current market trends and your financial situation, you may be able to locate a property, close a deal, and even move in within the course of a few months. That sort of convenience can be appealing for buyers on a tight schedule or those who simply do not have time and energy to invest in the process of building a new home.
Additionally, if you need or want to move into a particular neighborhood, you may not find land upon which to build a home, which means your only option would be purchasing an existing house.
Building New Home Benefits
The process of building rather than buying is often more drawn out, as it includes buying land to build a home and working alongside an architect or home builder to choose a floor plan and design the house. Constructing the home will also take several months. On the flip side, you have the opportunity to customize the house. Some old homes are functionally obsolete and with any existing home, you are likely to wish certain aspects were different. When building a new home, you have more freedom.
You also have the ability to make your new home more energy efficient in terms of heating/cooling, ventilation, and insulation, which will impact your energy costs in the long run. You also can avoid the toxic materials that exist in many old homes and instead use those which are better for your health and the environment.
As you design your home, you can include infrastructure for other features that benefit your lifestyle, such as home automation or solar panels. In general, you will have fewer repairs to make and less maintenance for several years with a new home.
When deciding to build or not to build, cost is likely to play a major role. Citing data compiled by the National Association of Home Builders, the Investopedia articles states it is generally cheaper to buy an existing home as opposed to building a new home.
Home costs are heavily dependent on the local real estate market, though. The true overall cost of buying also depends on whether you want to keep an existing house exactly as is or if you plan to make upgrades or adjustments. If a property needs work to be livable or comfortable, you should calculate those additional expenses, as well as 10 percent for unexpected issues, into the cost.
Depending on the condition of a home, housing prices in a specific area and other factors, building a home may not only be cheaper but also provide you with a home that meets your specifications from the start and has a better resale value.
As you decide whether you want to purchase an existing home or build one that is customized to your individual needs, you should seek consultation from industry professionals, such as qualified general contractors. Kroll Residential can offer their expertise to help you determine if now is the right time for you to consider building a new, customized home.
Investopedia. Accessed online at https://www.investopedia.com/articles/personal-finance/062614/should-you-buy-or-build-home.asp
“Building a House? The Pros and Cons.” Dave Ramsey/Ramsey Solutions blog. Accessed online at https://www.daveramsey.com/blog/building-a-house