What’s More Economical – Buying a New House or Constructing on Raw Land?
There are pros and cons to buying an existing house or building one yourself. When you add up all the costs, which approach will take more of your financial resources? Current data seems to show that building a house costs more on average than buying one but there are many factors that go into deciding this and it isn’t an exact science. Here are some factors to consider when deciding whether to buy or build.
Buying an existing house
One of the main reasons you may want to buy rather than build is because it is more convenient and takes less time. The main disadvantage of doing so is that you’re unlikely to get exactly what you want and an existing home is also likely to need some updates or renovations.
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Benefits to moving into an existing house
Once you’re pre-approved by a lender, you can look for the best house within your budget and make an offer. The whole process of buying a house involves a number of steps but the convenience of being able to move in fairly quickly is a compelling benefit for many people, especially those on a tight deadline, such as having to start a new job.
Another reason buying an existing house may be a better option is if you want to be in an established neighborhood near to work, school or family/friends.
Benefits of building a new house
If you build a new home, you can build to your exact specifications. You can also put energy-saving measures in place, which is not only better for the environment but can save you money on your utility bills.
You will save on transfer duty and on some other legal processes home buyers need to go through. Building a new house means fewer maintenance issues and there is less competition for buying a plot of land than for buying an established home.
Cons of building a new home
One of the main disadvantages of building a new home is that it can take a long time to build, and there are often delays and unforeseen construction costs. Some of the necessities homeowners may take for granted can become major expenses for builders, such as connecting utilities.
As the time to build increases, so the costs increase too. If you’re renting while a new home is being completed, any time delays can cause issues. Creating a garden from scratch when you build a new home can also be time-consuming and expensive.
In building a new home, there are often unforeseen construction costs but when buying older homes, there are often unforeseen repair costs.
For example, older homes may need roof and siding repair or the replacement of wiring and plumbing. In St Louis plumbing repair may be necessary for an old home. Any unforeseen costs can result in going over and above your budget and making either choice a more expensive one than you bargained for.
Which is more expensive?
Accurately determining the difference in the cost involved in building a new house versus buying one isn’t easy and will largely depend on your list of must-haves and the location. It is less financially risky to buy an existing house but if you have the land and a reliable builder, constructing a new house maybe just as affordable.