Home ownership is quite possibly the most important part of the American dream. Few people would tell you that at some point in their lives, they haven’t seriously considered the benefits buying a home over renting, and though there are many, many renters in our country, many happy with their situation, there are likely quite a few of them who would love to be putting aside some equity in the form of a home investment. Of course, affording that dream is tough, and when you can afford it, all too often, people find themselves buying and dealing with someone else’s dream, hoping that the house or condo can be rearranged, repainted and remodeled to fit that vision we’ve had in our heads all along. Our own personal version of the American dream, if you will.
It costs money to renovate a home, though, and many homeowners would find themselves using up every nickel of equity they’ve got making their dream come true. The alternative, of course, is to have the house built to your personal specifications. Clearly, there are some down sides to this, notably the cost and time involved, but at the same time, there are some pretty significant upsides, as well. We’ll look at a few of the benefits of each, and hopefully that will pave the way for you to come to a decision that will be of the most benefit to you both financially and personally.
Older homes typically cost a little less per square foot than building a new home. This stands as the single greatest advantage to buying an older home, as opposed to building a home, so it has to be asked, is it possible to find your version of a dream home already on the market? If you’re like most folks, you’ve got an idea of the general style of home you’re interested in, the neighborhood, lot size, and the local schools. You may not have given much thought to the interior dimensions of the home, the size of the kitchen, or other details. Consider this, though: If the house costs you $250,000, and you want to renovate one bathroom and the kitchen, you’ll likely spend in excess of $300,000 once all is said and done.
The cost of building a new home, right now during 2014, averages between $95-$150 per square foot of living space, depending on the quality of the materials used, the area in which you live, and the labor cost in your market. Now, that doesn’t mean that your dream home will be $95 per square foot if you just cut back on this and that. You will find that little things cause the price to go up more than you might think. Corners, for instance. In every case, the more corners a home has, the more complicated it is to build. This goes for the inside as well as the outside. Odd angles (meaning anything other than a 90-degree angle) complicate the build, and will cause the price to go up. Additionally, there is added expense for homes that could be considered “totally custom.”
A less expensive built home would be one that you pick out of an existing catalog. It is a home that has already been designed by an architect, and will likely already be proven as a quality home. A more expensive home might be one that you’ve sketched out on a napkin and which requires the services of an architect to work out how the thing can be made feasible and constructed within the financial and time constraints. This isn’t always easy, so if this is the case for you, expect a high price tag!