The Costs That Come with Home Building: New Construction or Established Property?
To buy or to build? That is the question many aspiring homeowners are asking themselves as they navigate the world of real estate. On one hand, buying a home that is already built means that you can move in much faster and it requires much less work on your part. On the other hand, if you’re handy and you want to add more personal touches to your new place, you might opt to purchase a plot of land and build on it or hire contractors to build on it using your designs. You will need to do your research and evaluate the market in order to decide which path is best for you.
How Much?
The average single-family home is approximately $300,000, and the average DIY build ranges from $150,000 to $450,000. The price of your home or new construction will change depending upon a variety of factors such as the area you live in and how many extra or fancier features and appliances you wish to include in your build. Not to mention, the cost of an HVAC system ($3,000-$12,000), proper plumbing (up to $10,000), and electricity (up to $10,000) are expensive on their own. The price also depends on how much square footage is in your home and the quality of the building materials that are used. The costliest region to build a home in is the Northeast region at $161.53 per square foot. Make sure to look into the rules and specifications for your area before you begin construction. Many buyers opt to bring on a real estate agent to help them navigate this process, which is a good idea, particularly if you are new to the home or land buying process. Your agent will be able to guide you on the best path and assist you in making the best decisions with your budget.
New or Established?
The choice between designing your own home and buying one that is already designed and built for you is not always an easy one for new buyers to make. You will need to consider how much you care about the minor details in your home and how much of a personal touch you wish to implement. If you are not someone who cares about the details, you might opt to purchase a home that has been built for you. If you do care about the details, you need to factor in the cost of bringing on an architect to help you out with your design. On average, an architect will charge anywhere from $1.50 to $2.50 per square foot. Labor for custom builds is around 75% of your average total costs which also include the land itself, financing, landscaping, etc.
Appliances & Features
What kind of preferences do you have? The interior design options and appliances you opt to put into your home can really begin to add up if you are not careful. Foundation can range from $4,000 to $21,000 depending upon the material you use. Concrete is one of the costliest elements of building a home. Countertops and flooring can also be expensive if you are going for more luxurious materials such as marble, real wood, or granite. Another pricey element of a home build is the roof; a new one is around $7,000; however, this is for basic asphalt. If you request anything else, the price will rise accordingly. Perhaps you want to be more environmentally friendly and opt to get solar panels installed instead. These can be as expensive as $15,000 and you will have to get them professionally installed. Appliances such as washing machines, dryers, refrigerators, and ovens rise in price the more modern they become. If you want the most up-to-date, stainless steel appliances, it will cost much more. You also need to account for the wiring and plumbing costs that come along with your new home, whether you build it or purchase it built already.
Is It Less Expensive to Buy or Build?
Generally, it is much more cost-effective to buy a home that has already been constructed since you know more or less what to expect financially from this situation. Established builds can also surprise you with unexpected issues, but you can minimize this risk by hiring an inspector before closing on a place. This way, if any repairs are out of your budget, you can look elsewhere for your home. You could also look at new homes, considering that it would be a while before they needed any major work done on them such as roof repairs, and they shouldn’t have faulty wiring or plumbing issues. A custom build that you are constructing from the ground up comes with a set of challenges. For instance, you will need to get approved for a land loan, which is extremely difficult unless you put up the full market cost of the land for a construction loan to offset the lender’s financial risk. Land loans on their own are typically rejected; lenders need assurance. This means that you are going to be coming out of pocket quite a bit for your home build no matter what. To buy or to build? This depends largely on how much time you have and what you are willing to spend.