If you’re in the market for a home, you have two main choices: either you buy land and build a new home on it, or you buy land with a preexisting home. Is one of these options better—and cheaper—than the other? Though the choice is ultimately yours, we cover the main financial, quality, and customization differences below to help you decide.
Financial Differences
You’re probably most interested in knowing which option is cheaper, but the truth is that it can vary. If you buy cheap land, use affordable supplies, and/or do a lot of the work yourself, it’s very likely that building your home from scratch will be cheaper.
However, there are a few other factors at play. Permit costs can vary, as can the expenses for hooking your new home up to municipal utilities. If your home is rural, this will cost more.
Additionally, unless you’re paying for everything up front, you’ll need a construction loan, not a mortgage. These loans typically have higher interest rates.
Finally, there are so many variables and obstacles that show up in the building process that it’s unlikely your project will experience zero setbacks and failures. You’ll probably have to pay more for these unforeseen costs as they arise.
Conversely, if you buy a preexisting home, all of these varying and unexpected costs are partially absorbed by the building company. The price you see is the price you pay—save ongoing maintenance and repairs.
So here’s the crux of the financial issue: building a home can be cheaper, but it rarely is.
Quality Differences
By now, you might be thinking that buying a preexisting home is better. However, building your own has a lot going for it.
In terms of quality, building a new home grants future homeowners the opportunity to select high-quality materials and choose a reliable home builder they trust. Having an eye on the process from start to finish gives you more control over your new home’s quality. This can result in fewer repairs and maintenance issues down the line.
Conversely, the quality of an existing home is often questionable. Older homes have plenty of outdated features and systems that are likely to break down soon. And if you think new construction is in the clear, think again—rapid development and supply chain issues have made new construction homes worse than ever.
So when it comes to quality, building your home yourself is the way to go.
Customization Differences
Finally, let’s discuss customization. Perhaps obviously, customization is one of the most enticing aspects of building a new home. Homeowners can choose layouts, finishes, and fixtures that align precisely with their personal tastes and lifestyles.
This level of personalization is nigh on impossible to achieve in an existing home. However, some buyers may relish the opportunity to renovate a space, bringing their vision to life within the existing framework.
Making Your Choice
Ultimately, deciding whether it’s better to build or buy a new home depends on your priorities. If you’re fine with paying more, then building a home from scratch gives you more control over its quality and makes it unique to you. However, if you’re just looking for the cheapest path to a roof over your head and a space to grow, then buying a preexisting home is probably better.
Again, however, the choice is yours. This information is simply here to help you decide. Best of luck!
