If you’re thinking about owning your own home, you’ve probably been researching the options of either buying or building one from the ground up. The two options have their own merits and demerits and it is important you do some serious research before making the important decision.
You can always take a look at House and Land Package – Reward Homes to see if building your own home is the right solution. Building a house could seem expensive, but compared to the current high-priced homes in the market, which one is the cheaper alternative?
The Type of House and Budget
If you can afford to splurge, saving money will be the least of your concerns. In the current real estate market, it will take a miracle to find a house that needs minimal fixing that is below $150,000. That means you have to spend more in order to get the ideal house. The good thing about building your own home is you can do it with a modest budget provided you’ve done thorough research and you’re working with the right contractors.
Thinking About the Land
You will first have to get land before you can think about building your own home. Buying a lot in urban areas will be expensive but you can get them cheaply the further away you move from the city. If you really want to live off the grid, but don’t have the money or the savings, you may want to explore the option of vacant land loans in Hawaii although they can be harder to get compared to mortgages.
Construction Loans
These loans will not only allow you to buy the land but will also facilitate the building of the home. You can think of it as a line of credit and not a mortgage. The loan will only be available when you need it and the interest is charged when it is used.
Such loans will typically last a year or depending on the duration of the construction project. You first need to decide what the loan is going to be used for before you begin your project. The best solution would be to search for local credit unions as they will are in a better position to analyze and decide how much you’ll need for the construction project.
Raw Land Loan
This kind of loan will finance the buying of land that doesn’t come with any utilities on site. You will have to pay a higher down payment because of the risks involved in such a loan. It is easier to work with a local lender who is experienced in issuing such kinds of loans.
Utilities
This where the costs could skyrocket depending on the location of the land. Here are some of the basic utilities that you will have to factor when building a house.
Septic: According to Home Advisor, the national average cost of installing a septic tank is $5462. It might not be that expensive from a broader perspective but could inflate the total cost of the project.
Heat: You’d be lucky if you build in an area that doesn’t require a heating unit. You might have to install an air conditioner but that is not as expensive as installing a heating system. Installing a new HVAC system can be costly and you will have to pay an experienced professional for the work. The installation could cost up to $14000 depending on the size of the house.
Electric : This is another cost to consider that could potentially have an impact on the total cost of building the house. You will likely need to hire a professional as electrical work could be dangerous.
Doing It Yourself
You could save a lot of money should you decide to build the house on your own. Labor cost inflates the total costs and that is why some people will prefer building on their own although it is not recommended.
Cheap House Styles
If you’re on a budget, building a mansion might not be ideal given the cost implications. There are alternative housing styles that are cheaper and don’t compromise on the aesthetics. The A-frame design, in particular, is popular because instead of having bedrooms, it has lofts. It is ideal for those people who live in cold places and shoveling the roof is an additional expense.
To sum it up, does it cost more to build a home than to buy? The short answer is it depends. One way you can determine is by looking at how much it will cost for utilities.