Is it cheaper to buy land and build the house or buy an existing one?
The discussion on whether it’s better to buy or build a house can go for decades. Both options definitely have their ups and downs. Building a new home from scratch eliminates the necessity to change anything in the house in the nearest future - everything is brand new. On the other hand, there are so many costs associated with building your own home that you should never forget. To build or to buy is totally your decision but here is some information that can help you make up your mind if you are still unsure.
How much does it cost to build a house?
The cost of building and buying depends on a variety of factors, some of which you can’t even control. The median price for a new house in the United States is about $300,000, while the marine price for an existing home is $212,000. This difference can be explained by the fact that people, building new houses, want to make them bigger and better than the existing ones. The size of the houses was gradually rising since the 1970s. However, building a new house will cost you more than buying for more reasons:
- Builders profits - the building is like a business project and someone needs to profit for it. You will be paying those profits.
- More stringent energy policies or building codes- some policies might have changed over time and you might need to pay higher costs.
- The cost land - when buying an existing house you already have the house and the land. However, when building a house you have to hunt for the good land which can cost you more as you will have more competition.
- Rising costs of materials - when that house was built the materials might have cost much less than they do now, plus taking depreciation into account.
In addition to costs, you expect to have when building and house there are some articles that might come as surprise but still will cost you enough, completely ruining your budget. Those are so-called hidden costs of building a house. Here are some of the examples you should take into account.
- Window coverings- don’t underestimate those!
- Landscaping - when thinking about the house project most people omit the landscaping costs, however, those might add you app thousands of dollars.
- Some unexpected costs
- Furniture, driveways, fences, upgraded finishes, etc
Depending on the different factors of your soon to be house this list can go on and on. There is no limit in such “extras” when you are building a house from scratch.
Overall, the difference in costs between building a new home and buying an existing one depends on a variety of factors. Sometimes building a house can be the better option as you get exactly what you want and need, sometimes buying a house is much cheaper and more efficient. Do your research before making this important decision, consult with people who are going to live with you, find out what is available and the prices on the market. Don’t listen to any realtors, builders or friends, at the end of the day you are the one living in the house and paying for it.