After living at your parents’ house, being crammed in a college dorm room or being creative with space in your tiny apartment, getting your own place can be a wonderful thing. For many, it’s a true definer in pursuing adulthood.
But when you’re looking at the housing market and finding out which housing price point best meets your needs, the decision to build your own home or buy an existing home is an important first step.
With the trends in home improvement shows of flipping houses and building new ones, a massive demo project has become increasingly popular in making a place your own. At first glance, it may seem that building your own home is a cheaper option. You believe you’ll save a ton of money in purchasing a home at a very low price and making improvements to the home on your own. You get to decide what kind of wood cabinets your kitchen has, the backsplash in the bathroom and the color of the master bedroom.
But is building your own home from the ground up – or even major renovations – in fact the cheaper option?
In answering this question, there isn’t a clear yes or no answer. So how are you to decide? Here are some factors to keep in mind as you discover the housing avenue for you.
The Upfront Costs
Whether you choose to buy or build your own home, there are obviously some upfront costs. Existing home prices can fluctuate greatly depending on the area you’re looking into. Factors such as location, amount of land and much more. Other considerations such as demographic trends and economic growth also affect the prices of the homes you’re looking into.
When looking into building your own home, the upfront costs may at first seem to bring on a great deal of savings. After all, you’re basically just starting out with the property. While the price you pay for constructing your own place also depends on the location of the land and the amount of it, much of the additional costs that get stacked on are from construction materials and the other components that actually make up your house. A great part about this method, though, is that you pay exactly what you want in a house and not for those components you don’t actually want. In building your own home, you’ll also have to determine whether you are going to be the substantial effort of building or if you will more rely on building and construction companies to follow your floorplans. However way you work with a construction company, that partnership adds to the cost of building your own home.
The Maintenance Costs
Typically, when you buy a home that’s quite a few years old, there’s bound to be some substantial upkeep and repairs you may experience in the near future. Whether those improvements are included in the home purchase or not, you can expect to shell out some additional cash to keep your home purchase in working order.
But when you build your own home, the materials, appliances and other components you include are probably brand new, or close to it. The dishwasher you just purchased for your new home will probably last longer than the existing one that’s been in a house of a few years already.
Included in maintenance and usage costs includes energy efficiency, particularly during times of heat and cold when you’ll need your air conditioning or heat working properly. In an older, existing home, the level of energy efficiency may be significantly less than the potential of a brand new home. These costs of effectively heating up or cooling down your living space should also be taken into account when determining if it’s cheaper for you to buy or build your home.
Just like it’s important to know details about a vehicle’s history before buying it used, knowing the history of an existing home is equally important. With existing homes, you can see the past selling prices it has gone for as well as comparable prices in the area in which you’re interested. But with a brand new home, you’re starting from scratch. Particularly if you’ve purchased a larger portion of land without many other homes around, you may be more relying on your own intuition and research into home values rather than a set record of home values.
Buy or Build? The Choice is Yours
The decision to buy or build your own home comes into the value you place in making your space exactly how you want it. Depending on key factors such as these, there is no clear cheaper option. Things like upfront costs, maintenance costs and the ability to track the history of a home are all important aspects of making this decision.