t2

Monday, January 27, 2020

Is Building a Home More Expensive Than Buying One?

When we purchased our house 3 1/2 years ago, it was as part of a building project. A construction company already was in the process of building a large amount of apartments, and they were approximately a year and a half away from completion. We bought as part of the project instead of buying something already built, because doing so was the lowest cost way to buy a house locally, and we were able to make changes in the plans before it was fully built to our specifications. Buying as part of a project is cheapest here, and the earlier on in the project, the cheaper it is to buy. The down sides, though, are that you have to pay for the house before it is ready to move in, which can be taxing on the budget, especially if you are paying for rent while also paying for the house being built. Other people build not as part of a project, but completely on their own, and that is much more complicated. This post sent in by a reader expands on the issues and expenses that may come up when building your own home.



Many people want to build their own homes instead of buying one. While some enjoy the laboring and toiling involved in building their own homes, others do it as a sort of romantic gesture. Some will actually do it because it’s cheaper, especially in an economy where acquiring a home is expensive. So, is it actually cheaper than just buying your own home?


Time

When you’re considering whether building a home is cheaper or not, think about time. If you consider time to be a currency, then you may as well stop reading and start looking for a house to close on. However, it is a matter of perspective. Time can be a currency and still make building a home cheaper, as you will not be caught with the troubles of a mortgage and may instead spend this time elsewhere. This will make building your home cheaper, as the price is unaffected by time.

Costs of Building Your Home

When you build your own home, many things come into the equation. However, one thing which you’ll surely capitalize on is not having to worry about adjusting your lifestyle to fit someone else’s preferences, as you’re building your home from scratch. If you want to plant roots in Australia, the home building wizards at Novus Homes explains in a very helpful home building guide that the experience doesn’t have to be stressful, as long as you have a solid plan and vision, the whole process can actually be quite painless and enjoyable.

Other factors to keep in mind and you need to know are:

Buying Land

When you just buy a home, the troubles of having to look for a lot to build on become nonexistent. However, building your own home requires finding land to build on, which can be exhausting and expensive, depending on where you’re looking to get your house built.

Building Loan

Unlike a mortgage, a building loan will have you only pay interest on the amount you use, sharing more in common with a credit line. So, if you take X amount, and only end up spending Y amount, you will only pay interest on Y, while the rest of X sits in your account.

Installations

You will install everything when you’re building your own home. This includes sewage, electrical systems, HVAC and anything else you may need. You’ll also have to connect your home to the town’s or city’s water supply and then work on landscaping. A ready home will seem to be free of these expenses, though they’re all added into the price at which it’s sold.

Further Needs

If you’re going to build a home in a secluded, ‘off-the-grid’ area, then you will need to make preparations accordingly. This includes all sorts of supplies, which may encompass such things as a solar panel, backup generator and a few batteries among other things.

Whether or not building your own home is more expensive than just buying one is very difficult to decide. It greatly depends on the hopes you have for your house. However, while some homes are inclusive of these costs of building with an additional margin for profit, others may actually be less expensive. So, it all falls down to where you’re building your home, the tools and equipment, and if you’re hiring a contractor or not. All in all, building your own home can be less expensive, but expensive still the same.

Share This