For many people, the decision as to whether they should buy a home or have one custom built, comes down to cost, and naturally, there are some difference between the two.
With house properties rising in many areas of the country, having a home built instead of moving into a readymade one, is becoming more of a viable option, but folks still want more clarification on how much more or less, one is likely to cost over the other. With this in mind, here is a rough and very brief breakdown of the costs associated with both buying a home, and building one:
Cost breakdown for buying a home
- Taxes, interest and insurance – for first-time buyers, there is more than just your monthly mortgage payments to consider, such as homeowners insurance and taxes on the property.
- Small remodeling projects – it’s almost inevitable that at some point, you’ll want to make adjustments to the home you’ve bought to personalize it and match it to your needs and desires.
- Upgrades and repairs – even if you’ve bought a newly constructed home, there will come a time when repairs or upgrades are required, and for older homes, some of these may be relatively costly, particularly if they involve plumbing, roofing or windows, for example.
- Replacing failed appliances – newer homes may have these inbuilt and ready for you to use, but for older homes, it’s likely that you’ll need to buy new appliances, or upgrade existing ones.
- Maintenance to the exterior – depending on the condition of the exterior of the property, or size of the attached land, landscaping, maintaining of path and driveways, and new siding, for example, can mount up annually.
Cost breakdown for building a home
- Land costs – building a home on land that you already own will of course reduce your outgoings, but if you need to buy a plot of land, this can be costly depending on its location and size.
- Upgrading and finishing touches – if you’re planning to have a luxury home constructed using prime materials and featuring superior finishes and extra touches, this will of course cost more, and availability of each material will need to be checked prior to construction.
- Materials and labor costs – with the price of wood haven risen dramatically in recent months and years, and many other construction materials either more expensive than they were, or unavailable due to demand or a lack of supply, you’ll need to carefully budget for your materials and labor.
- Complete build, or left unfinished – a lot of new construction homes are being built without the basement being finished, for example, but if you want this to be complete before you move in, you’ll need to pay for the privilege.
There are of course, many more costs associated with buying and building homes, and some of them may crop up when you’re least expecting them! But, by at least carefully considering all of the costs above, you should be able to decide which is the more affordable option for you and your needs, at this particular moment in time.