Many new homeowners choose to purchase an existing construction from a previous owner, especially if it is located in a busy urban area where you cannot find enough space to build your own. However, very few homeowners choose to purchase a piece of land where they can build their home from scratch. While this approach may raise several concerns about the costs involved in putting up a new construction, it gives you the freedom to customize the home to your desired style and individual preferences. This article discusses whether building your own home is cheaper than purchasing an existing home.
Factors to Consider Before Building Your Home
- A Piece of Land
Building your own home means that you will have to buy land. If you are thinking of building a home in densely populated areas, then you might as well look for an existing construction to buy. Not only will you find it difficult getting enough space but you also pay a significant amount of money to have your land in an area that is densely populated. Because of this reason, it is always cheaper to purchase land in rural areas than secure plots in the suburbs of busy cities and towns.
- Getting On or Off the Grid
Purchasing an existing construction can save you time and money when it comes to managing your utilities. You only have to make your monthly payments, and you get access to lighting, water and sewage systems. However, this job can get expensive if you are building on raw land since you need to take care of the electrical systems, HVAC, sewage, and landscaping. If you choose to stay off the grid, it means that you will not have to rely on local services for your utilities. If you choose to make your home a self-sustaining environment, you have to install solar panels, batteries and an inverter to run your home power needs.
- Hire a Contractor or do it yourself?
It is possible to do things like painting the walls, refurbishing the HVAC, and changing the flooring when it comes to fixing up an existing home. However, building a new home from the ground up requires the expertise of professional architects, electricians, and engineers. If you lack all of those skills, then consider hiring a professional to have your structure well done. It is also important to keep in mind that top-quality contractors may have expensive hourly fees and can have a huge impact on your budget.
Older homes may require high maintenance as they have more wear and tear. It is important to know the age of the main structural components before purchasing an existing home to avoid the high costs of maintenance. Building your own home comes with less upkeep since everything from the HVAC system to major appliances is new with a warranty. There are times when an entire home is protected for more than 10 years because the warranty covers any problems that may arise after the construction is complete.
There is some context to purchasing an existing home since you can research its previous sale prices and that of similar homes in the area to get a glimpse of whether prices are rising or falling in the real estate market. On the other hand, new construction can be more of a gamble, particularly in up-and-coming neighborhoods. There are not enough data points to validate what could happen in the future without a proven track record of the housing trends.
Buying vs Building a New Home – Which One is Cheaper?
The decision to purchase an existing construction or buy a new home depends entirely on your goals, ambitions and financial capability. The upfront costs of constructing a new home can be higher than purchasing an existing home since you have to start by purchasing land and building from the ground up. Although there are plenty of factors that go into building or buying, many real estate studies show that buying an existing home is cheaper than building a new one. However, the choice between the two options comes down to where you plan on living and your expectations for the future.
There is no doubt that building a new construction allows you to customize your home based on your style and preferences. While this may seem like a good idea, it comes with a great financial burden and requires professional skills and expertise to meet your desired expectations. Purchasing an existing home may have its downsides but is cheaper and you can always make improvements to suit your style and standards of living.