Many new homeowners choose to purchase an existing construction home 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, other homeowners may choose to purchase a piece of land where they can build their home from scratch.
Building a new construction home may raise several concerns about the costs involved but 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.
Building a new house can be exciting as you wait to move into your dream home. However, if you are not careful, the feeling can overwhelm you such that you end up making decisions that are not cost-effective. For instance, you may be tempted to add features that were not previously budgeted for.
Factors to Consider Before Building Your Home
A Piece of Land
Building your own home means that you will have to buy land. The benefit of working remotely and not having to travel daily into an office allows people who want to build new homes to procure land that doesn’t have to be very close to metro areas. It’s often cheaper to purchase land in rural areas than secure plots in the suburbs of busy cities and towns.
Getting On the Grid
if you are building on raw land remember that you’ll need to set up and rely on local services for your utilities. Call the municipality to find out the process of setting up electrical systems, water and sewer access. HVAC and landscaping will also be part of the home build.. To save some money in the long run on your electric bills, you may want to plan on installing solar panels to generate power to offset your energy needs.
Stick to Your Budget
It is very easy to stray out of budget when building a new home. This is very often evident especially when you realize that you could add some features that were not planned for in the budget. However, this will not resonate well with the budget since it will cost you more. You can sit down with the family to come up with a favorable budget. You will need to agree on the design and space of your dream home, as well as the features you need.
Hire an Expert Contractor
Building a new home from the ground up requires the expertise of professional architects, electricians, and engineers. Unless If you lack all of those skills, then you must hire professionals to have your structure done well.
A good contractor with expert knowledge is the key to saving money when building a new house since they will advise you on the most favorable designs and features that resonate with your budget. To find a good contractor you can go online and look up local home builders with good reviews and ratings. Alternatively, you can reach out to those contractors who built homes for homeowners with a similar design to yours.
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.
Do Some Good Research
Getting yourself into a large, high stakes project like home building without appropriate insight into the cost of the design may cost you more money than it should. Discuss with your loved ones and agree on the design and the size of your dream home. Then you should research to find out how much similar homes in a similar area cost other homeowners in the same real estate market.
As you strive to save money when building your new house, don’t lose sight of the quality of your dream home. Cutting corners may result in some huge savings but you’ll end up having a substandard home, which may cost you more money in repairs and maintenance in the future.
It is also advisable that you maintain open communication with your contractor so that they fully understand your needs in terms of design and features.
Buying vs Building a New Home – Which One is Cheaper?
The decision to purchase an existing construction or buy a new construction 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.
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.
Although there are plenty of factors that go into building or buying, real estate studies show that buying an existing home is cheaper than building a new one. In today’s market, with inventory in such a limited supply, the choice between the two options comes down to where you plan on living and your expectations for the future.