Building a home versus buying?

[mad_planter]

Case in point.....we have 62 acres in NE Ohio we were planning on building our retirement home in a few more years. Speaking with a wise older friend of ours, he asked why would we build when we can buy a place these days for much cheaper per sq ft than building, and I do think he has a point.
Whether it be a foreclosure, or a property that someone needs to sell, it's most definitely a buyers market.
The biggest advantages I can see with building is you get it designed the way you want, and it's new......buying used, you sacrifice these but spend quite a bit less on an existing home. (paid off sooner) The wife and I are currently discussing this, and trying to figure it out.....
I'd be interested to hear some opinions on this!

I am currently going through this. I built instead of bought because we were looking for a piece of property that had a bunch of particular qualities not available with a house already on it. Too me its pretty simple. Build and get exactly what you want, and pay a premium, or buy existing, save probably a lot of money, and make some compromises. That said, I'm not sure I'd make the same decision that I did the first time, due to a crooked contractor and various other headaches I wouldn't have had if I had bought a existing property.

 

[IndyIan]

I think one advantage of buying is that you can get out buildings almost for free. Especially old timberframe barns. Now you have to make sure the buildings are an asset and not a liability, but I don't think older out buildings really add nearly as much to the price as they do to build later.
We built, in a nice location on our property, but getting a decent shop built isn't that high on my wife's list of expensive things to buy...

 

[dmccarty]

Things can happen. We built our first house in 1980 on 10 1/2 acres, lots of extras and upgrades, thermo wood frame windows, upgraded cabinets etc. We were going to live in it for the rest of our lives.
Sold it 5 years later for a good loss.
Once that money was gone, well it's gone.

Events can also swing the other way. One can wait too long to minimize risk or waiting for the "perfect" place then an accident, divorce, job loss, health issue, etc., ends the dream.

It is a balance of risk. To a certain extent it is a roll of the dice because nobody knows the future and the best one can do is to stack the dice in your favor. In the end, you roll and see what you get.

We thought long and hard about what we did. A dozen years later we are somehow still pulling it off. We have had some real tough times that I will be danged if I know how we did what we did. We had a car accident which could have drastically changed EVERYTHING in an instant. Drivers training and experience kept me from getting seriously hurt. A fraction of second is what kept me from being killed or seriously injured.

I am real glad we have taken the risk. We have minimized risk as best we could. Things have NOT turned out as planned due to the economy and health issues but at least we had the dream.

Later,
Dan

 

[2manyrocks]

Amen. None of us can predict what the future holds.

One of the first estates I handled was for a retired airline pilot who had worked to build his dream retirement home and then found he had a brain tumor. His wife found the house too big to manage and ended up moving to a smaller place.

It's been many years, but I still remember his handshake and trying to communicate with him about what he wanted to do because the tumor had affected his speech before he passed.

 

[bdeboer]

If your largest investment in your life decreases in value over time, your financial situation is in trouble.

I had a friend who had a 1 1/2 storey modular home. I had no idea his house was modular until he sold it and told me it was modular. I had visited the house many times and could not tell any difference between it and a stick built house.

When building our stick built house, I discovered that very few of our subs knew the building codes. None of them owned the building codes book and I doubt any of them had ever read a line out of the building codes book. We bought a building codes book and learned more about the building codes than the subs and probably more than the county inspector.

I now have a new respect for modular houses. A modular home has a better chance of being built to code than a stick built home in my opinion because the modular house workers are building the same building over and over and learn how to know how to handle the issues surrounding that particular house design.

On the other hand, there is the "perception" of quality of stick built vs. everything else. The cheap double-wides that are built with the same materials and standards of single-wide trailers hurts people's "perception" of the modulars. The differences between a modular home, manufactured home, double-wide, and a "trailer" are very fuzzy. There seems to be no established, agreed upon standards that define which is which.

Trailers ALL depreciate in value. A modular home will depreciate in value if potential buyers "perceive" it to be a double-wide, whether or not it really is a double-wide (whatever a double-wide is).

Because of the depreciation factor, if I were to build/buy a modular home, it would have to look nothing like a double-wide. Inside and out, the house would have to be indistinguishable from a stick-built house. The only way you could know it was a modular house would be if you looked at the land deed.

In Ohio the Building department aproves "Modulars" there is a stamp that is not on the traditional double-wide or single wide. This stamp makes a difference in the insurance rates etc.

 

[bdeboer]

A couple of reasons I would build from scratch if staying in an area long term are:

1. Control of insulation details, like behind receptacles, in corners, the foundation etc., areas that can't be seen. These are rarely inspected.
2. Foundation Drainage can be done up front and properly.
3. Door sizes etc.

 

[scgargoyle]

I'm glad someone mentioned the whole modular/manufactured terminology. A modular is nothing like a manufactured, which is the old 'mobile home', which is the old 'trailer'. We looked into modulars, but for a quality one, the cost savings wasn't all that great, and the fact that people still somehow equate them to mobile homes made me worry about potential re-sale. The only big advantage I could see was in speed- they do go together much faster than a site-built home.

For your 'gee whizz' file: Thomas Edison's winter home in Ft Meyers FL is modular, being built in sections up north, and shipped to FL on barges.

 

[newbury]

I think one advantage of buying is that you can get out buildings almost for free.

I second that. In my previous post I showed a picture of my 5,500 sq ft of "out buildings" these are all metal buildings on thick concrete slabs, with a large driveway (asphalt) in front of them. They all have lot's of overhead 4' and 8' fluorescent lighting, electricity, and are "piped" for an air compressor that came with the setup. The big one in the center also has a 1 bedroom apartment running across the back. They will require some upkeep but suit me just fine.

For some reason the APPraiser valued the shops, the 18x36 pool, the 80x40 deck (in good condition w/ hot tub) surrounding the pool at $14,000, while appraising a 600 sq ft detached aluminum carport, like the VersaTube Two-Vehicle Steel Shelter at Northern Tools, at $15/sq ft. for $9,000.

My smallest workshop, where I stuck my Woodmizer

is 20x40, fully enclosed.


For some reason they don't value "outbuildings" very highly.

 

[Alan L.]

Case in point.....we have 62 acres in NE Ohio we were planning on building our retirement home in a few more years. Speaking with a wise older friend of ours, he asked why would we build when we can buy a place these days for much cheaper per sq ft than building, and I do think he has a point.
Whether it be a foreclosure, or a property that someone needs to sell, it's most definitely a buyers market.
The biggest advantages I can see with building is you get it designed the way you want, and it's new......buying used, you sacrifice these but spend quite a bit less on an existing home. (paid off sooner) The wife and I are currently discussing this, and trying to figure it out.....
I'd be interested to hear some opinions on this!

My experience has been that building costs the same as buying, and you end up with a new house built the way you want it. Unless you buy something run down.

 

[Cat_Driver]

Go to a tax Lein sale in your area. I'm not kidding when I say I saw homes sell for under 10K.

Many acres of land sold for a few hundred an acre...AND IN CA.

Do your sue diligence and you can buy some great stuff. DO a search on the internet. I never believed it till I went.

No need to say here what I purchase but know this, I'm heading back on the next sale and looking at other states as I type.