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Build Yourself, Buy New or Buy to Renovate - Best Housing Options

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Created on Monday, February 29, 2016
Updated on Monday, February 26, 2018
by Land Century

When you go to buy a home, you’ll find that there are three options available to you: build, buy new, or buy and renovate. The truth is that all of these are great ways to get into a home, but your own preferences will depend on how your home search proceeds.

If you have the money and want a truly unique home, you may want to build it from the ground up. You’ll likely save some money when you buy a new home, but it may not be exactly what you wanted in a home. The countertops may be granite instead of marble, there may be steps when you would have liked to walk directly into your home, or the entrance to the basement may not be ideal.

The truth is that no home is 100% what a person would want. And if it is, you’ll find that something could have been a little better a few years down the road. Renovating a property is also a great option. I like the idea of renovating because you can step into an old Victorian home and own a piece of history. You’ll find that the clawfoot tub is pristine while the intricate details on the banister leading upstairs is simply spectacular. There is a lot of potential in an old home, and if you have the money, this may be the right option for you.

Let’s take a look at all three types of housing options a little more in detail:

Building a New Home

Building a new home is fun. You’ll be able to pick out the type of flooring you want, the size of the rooms, where windows are situated and all of the fine details of your home. You’ll likely look through a bunch of different architectural drawings along the way.

A builder will need to be researched and secured (a very detailed process). You’ll then be shown a lot of preexisting plans for homes that can be built. Buying home plans is another viable option, or if you have the budget, you can hire an architect to design the home for you from the bottom up. Having a home built first needs to have proper architectural plans drafted and accepted by the builder.

Cost of Building a New Home

You’ll find that the cost of building a new home isn’t that bad in comparison to buying new in most cases. Data from 2014 from the National Association of Home Builders provides us with the following information:

* Building a home costs 20% - 30% more for a custom home.
* Prices range from $150 - $400 per square foot.

And what do these figures equate to in real world applications?

* A 1,000 sqft. home can cost $150,000 - $400,000 freshly built.
* A 1,500 sqft. home can cost $225,000 - $600,000.
* A 2,000 sqft home will cost $300,000 - $800,000.

The interesting tidbit that is missing is whether or not the price of land has been factored into the equation. You’ll also find that a modular home may be more affordable, or you can lower the price of the home depending on your needs.

But you’ll wait months and months for construction to begin, you’ll deal with unexpected fees and costs, and you’ll need to wait for permits. Building a new home is expensive and takes a lot of time, but it is the right option for anyone that wants to build their dream home. Financing home construction is also more difficult than buying an
existing home.

Buying a New Home

Buying a new home is more affordable, and less stressful. Maybe you can handle not having everything to your exact specifications. And you don’t want to have to worry about unreliable builders, unexpected fees or having to deal with architects or issues along the way. The average new home in 2014 sold for $259,000.

You’ll likely receive a warranty on the home, and you will be able to close in just a few months without all of the added stress involved. Buying a new home has several benefits, including:

* You don’t have to worry about mishaps, such as faulty roofs, foundation issues or purchasing the right piece of land.
* You can view the home instead of just architectural designs.
* You can negotiate a lower price in most cases.
* Financing is often easier because the home already exists.

But when most people buy a new home, they do not want to renovate it at all. This doesn’t mean that you can’t, but why spend the extra money for a new home and then put more money into it immediately? This is not an undertaking most homeowners want to do.

Plus, depending on what areas you want to renovate, you may be better off building a home. Kitchens are notoriously expensive, and may push the price of an existing home to levels close to having a new home built. When comparing a new to an older home, you’ll also want to keep in mind building practices. Homes built in today’s world use newer materials and building methods, which may be safer and more reliable. The main reason to buy a new – never lived in – home is security in knowing that you won’t have to replace a roof or other vital portions of the home in the near future under normal wear and tear.

Renovating an Old Home

Old homes have a mystic to them. Old can mean a lot of things, too. When someone says old, the home could have been lived in for a few years (it’s not new, really), or it can be a 100-year old Victorian home that screams opportunity. Renovating an old home is not for everyone, and here’s why:

* A basement remodel costs $61,000 on average.
* Bathroom remodels cost $15,700 on average.
* Kitchen remodels cost $18,500 - $53,000.
* Replacing a roof costs $18,400.

Keep in mind that these aren’t high-end remodels, which can cost significantly more. If you’re a handyman or handy-women, you’ll be able to do most of these remodels by yourself, which will cut the price of the projects down dramatically. When you go into a previously owned home, there is a higher risk of roof replacements, foundation issues, mold and a variety of other problems.

But there is a certain allure to renovating an old home. You can keep much of the home intact, and you’ll be able to keep the real oak floors, the beautiful architectural pieces and other parts of the home that simply aren’t seen in many homes today.

It’s a massive undertaking, and the amount of remodeling done needs to be considered before your purchase.
In most cases, you’ll find that these homes cost much less than new homes, with the national average being $228,000 as of August 2015. Now, if major remodeling work needs to be done, you can easily add $100,000 to this price.

You will find that it is possible to roll these remodeling costs into your mortgage, which is easier to do than to get a loan for a new construction.

Permits may be needed, living in the home during a remodel may not be possible, and old homes can need major repairs in the future. Ultimately, if you like the idea of fixing up an older home, just keep in mind that you want a home that has a good foundation, roof and doesn’t have mold.
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