There are a lot of people buying homes out there, many of whom are trying to become homeowners for the first time. With the 2008 financial crisis still close in the rearview (and perhaps a new one brewing), it’s a buyer’s market for houses in many parts of the world. But many of these are old homes that weren’t constructed to meet all of our modern-day needs and lifestyles. So, new buyers are faced with the question: should I build or should I buy? It’s a complicated consideration, one with many factors to look at. Here are the main points.
Building a house lets you be sure that you are getting exactly what you want. Many older homes are functionally obsolete, meaning that their layout and amenities were meant to serve people in a time gone by. You may be looking at large houses with only a single bathroom, or cramped layouts with little room for improvement or expansion. Building from scratch fixes all this, but there’s usually an added cost.
It can often be more expensive to build than to buy, though not always. Land for sale in Perth by Lend Lease is an example of building projects made to be affordable, especially for those coming into the country from without, to take advantage of a weak Australian dollar. But for those who are staying within their home country, building a home may be more expensive than it is worth. Still, much of this investment will be recoverable, as newer homes resell for more than older homes, generally. So, if you want to build, be ready to pay more upfront, and to wait for months while your home is constructed from scratch.
Buying an existing home is (potentially) convenient and affordable by comparison. If you’re not too picky about layout and design choices already built into the existing home, you will likely find a home in a good location for an affordable price. The downside is that these homes can be more expensive in the long run, unlike their newly built counterparts. Old homes have problems. You might have to replace the electrical system, fix the plumbing, deal with pest infestations, make large-scale renovations, and many other factors.
Your home may end up being worthless (as explained above) than a newer home when you decide to sell. Of course, it’s possible to pack equity into an old home by making intentional, well-chosen upgrades. But there’s your additional cost over the years that you own the home, one that you wouldn’t likely incur by building a home from scratch.
It’s really up to you, what you want, and what you can afford. If you want to move into an established area, like a city, it’s probably easiest for you to buy a cheap house and renovate it to meet your needs. But if you want to move into an area without good home contenders, it may be worth your while to build from scratch, creating the perfect home for you and your family, wherever the location might be.
4 thoughts on “To Buy or To Build: A First-Time Homeowner’s Guide”
It is really a case-to-case basis. When it was our first time to get a house, I and my wife preferred to buy an existing house as it was cheaper and we just did some renovation and had to be more creative. Building a house is ideal but our budget was limited, which brought us to this decision to buy an existing house.
We’ll probably build it or do some very big changes to an old property. We have our eyes on some near villages here, with some great large spaces for houses and we’d love to get a house there in 10-15 years. We’ll see how it goes.
Here in central Illinois, it is definitely cheaper to buy as opposed to build. We are currently building our dream forever home and houses that are about 10-20 years old in the two most prestigious subdivisions in the city are easily half of what we are paying to build ours. However, we have a lot we want, the design is custom for us, all the mechanicals are the most energy efficient, newest style you can get, It will be mega-super insulated with 2×6 outerwall studs. Few of those other houses have all that. I love the look of an old home but the maintenance can be horrendous. Our house should need little maintenance for 10-20 years.
I have always loved the idea of building a home. To your point, you can get exactly what you want. I would like it built in an old style but with a modern layout. Often fully renovating old homes reveals major problems and can be more costly than building new and much more stressful. However, looking for land to build a home can be difficult. We would always want to be in an established, urban neighbourhood, so for us, buying an existing home was what makes sense. But if I could have the perfect location, I would love to build!