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Buy or Build a Home, Which is Cheaper?

• Posted by Opeyemi Quadri in Tenancy
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For those who live in the city and planning to have a home they can put their heads in, they are often at crossroads whether to buy or build their home from the scratch.

While some of them consider the stress involved in building a house from scratch like buying a legitimate piece of land, some are worried that they might end up spending more building than buying.

This year may be the year you decide to own a home. You have two options: 1) to buy a piece of land and build it to suit your taste, or 2) buy an already-built apartment from a reliable real estate company in your city.

In this article, we’re taking a closer look at the advantages and disadvantages of building a house and buying a home.

Advantages of Buying a House

1) The average cost of purchasing a home is between 20-30% more than building one.

2) Most established properties are located near amenities like schools, shopping areas, restaurants, major highways, or public transport.

3) Most homes with a garden and pool are already built.

4) It can take three months to buy a house. You will need to pay the deposit, secure the loan and arrange all documentation. The property will then be transferred to your name so you can move in.

5) You have the option to compare prices and search for a great deal when buying a house.

Disadvantages of Buying a House:

1) A house that is not in use may be an older structure, making it less energy-efficient or well-suited for modern technology.

2) It is possible to need to renovate your home to achieve the exact results you desire. This can be costly. You should budget upfront for energy efficiency, according to Andrea Tucker, the Director of MortgageMe, a South African-based mortgage company.

3) Some properties older than 10 years old are sold “as-is” without a warranty. This means that you have to verify what you’re purchasing.

4) The structure may not be your preferred choice.

Benefits of Building your House

1) You have the option to design your dream home exactly how you like it. You can even watch your dream home being built brick by brick.

2) It adds sentimental value to building your home. Knowing that you and your family will live there is special.

3) Maintaining a home that is new and modern will be easier.

4) Building codes and construction materials will meet the most recent safety standards.

5) New homes can include all of the most recent building trends, such as tech-friendliness or energy efficiency.

6) Because there is no transfer of property between owners, you will be able to save money on transfer duties and avoid the legal process involved in purchasing an existing home.

Challenges of Building a Home

1) Although the building is more costly, you can save money over the long term – on maintenance, renovations, and transfer fees.

2) If you don’t have the budget to hire a project manager you can expect to manage this project yourself.

3) You will need to schedule a time to check in on progress and make sure that everything goes according to plan.

4) Due to the delays in building, you might need to rent a house while your home is being built. This can cause financial problems.

5) Construction can be halted due to inclement weather, which can prove frustrating.

6) Many building projects go over budget and cost more than expected.

7) It is no longer a good idea to buy a pre-built house. The opportunity to purchase land and build homes from scratch in urban areas, where most people want to live, is decreasing.

Land availability in City

To get a legitimate piece of land to buy in the heart of cities like Lagos and Abuja may be challenging. The land plots available are limited and only wealthy investors can afford them.

Even the wealthy investors must take extra care to not fall victim to dubious land owners and sellers. In this situation, it is better to buy than to build.

Many of Lagos’ most desirable locations are home to vacant, yet completed properties that are ready for purchase. These locations are popular because they are close to office buildings where people love working and have many social attractions.

Lagos Island, for example, is a hub of commercial activity. It is home to many people and is full of vacant homes that are waiting to be occupied.

If you want to live in these areas and enjoy all the benefits, you should consider buying rather than building a home.

It is important to consider the costs involved in building and buying a home. However, the end result should be worth it. 

Consider the properties you have toured, the time frame for moving in, and your expectations for your new home. Building your dream home is an option. This guide will help you find the best mortgage rates if buying seems better.

Bottom line:

Above all, if you have saved enough to take care of the cost of building your own home, it is more affordable than buying a finished one. Or you may even buy land and wait for the land to appreciate if reselling land is your target.

If you don’t want to be under any stress if all you want is to buy and move in, then buying a home will be most suitable for you.

According to the U.S. Census Bureau, January 2022 saw an average home price of $496,900. This is up from the pre-pandemic $402,300 in January 2020. But you must warm up for the stress if you’re choosing to build a home than buy one.

Bottom line: buying or building a house have pro and con, you have to choose the one that best suit your needs.