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Building a house can take a while. It can take a year or more, depending upon size.
I prefer buying in a desirable neighborhood. They have better schools and lower crime rates, in a very general term. If there is a blend of age groups, rather than a large proportion of retirees, you won't have major turnover from people trying to downsize in their stage of life.
A new house in a new neighborhood is a crap shoot. If the developer folds, you may not see another house for years. I know of a neighborhood that has only 4 houses with dozens of available lots. Another development has 1-2 houses in a sea of empty lots.
If this will be your first venture into home ownership, and if you do not have any 'do it yourself' skills, buy the brand new house. Definitely do not build a house on your own lot as it will take too long of a time and it will require informed decisions that you are not able to make yet.
And, if you are only interested in the cost/investment aspects you would be better off renting a nice place and investing your down payment money (or keeping it for your 6 months emergency fund).
How about not purchasing a lot and building a custom home but have the builder build one of their model homes in their lot over the next 4 to 6 months.
How about not purchasing a lot and building a custom home but have the builder build one of their model homes in their lot over the next 4 to 6 months.
Thanks!
I would budget AT LEAST 6 month for a new build, assuming minimal delays. I finally had to back out of my contract when after 5 months my builder told me it'll be another 11 months. I ended up going to another builder and bought a house that someone else spec'ed but backed out before completion.
Generally you can only lock in your rate 60 days before completion. By then the rate might have gone up. I have a friend whose house is building right now, and he is worried about interest rate volatility before he can lock in his rate. Keep that in mind when considering what to do.
all the new construction in my area is part of an HOA. i'm not a fan of that -the added costs and restrictions- so I would never have a new house, unless i had the time and money for a custom build. I like buying in established neighborhoods for those reasons.
You could be even richer if you didn't have to pay for food. There are dumpsters all over the city with free food. (wink) I'm not sure many people would want to live in their car to get "rich" Money isn't that important.
True. To tell you the truth I cut my food bill at work. I go in early most of the time and would have breakfast as well as lunch at work. The cost was over $100 a pay period. I switched to healthier food choices, stated drinking free water from the many water coolers, and found that many break rooms and the Doctor's lounges all have free food that is always left over. Yup your doctor will eat the donuts in the Doctors lounge but leave the fresh fruit. Now I am spending less than $15 a pay period for food.
As far as living in the car, I knew a guy that lived at the beach and I don't mean in a beach house. He did this for 2 years while he was going to school. He was working part time, going to school, and lived on the beach. He used the college gym to work out and shower for the day. I know another couple that are renting out there Santa Barbara home and living in both a boat and a van. They have a small boat off the coast of Santa Barbara that they "live" in. I know tough life, but it fits with their desire to pay off the debt and home faster. Another guy I read about was living at the Yahoo offices. He was part of a research group and when the funding ended he stayed on. He had been there so long that everyone just figured he was an employee. They also thought he was a dedicated employee because he would be there before anyone else and stay later than anyone else. Like me he would eat what was left over in the break rooms, food that was provided by Yahoo.
Money is very important to me. You can try living without money and I bet that you will have to start using the local dumpster to survive. For me, I will have a 7 figure or higher net worth, a home that is paid off, a couple of nice cars, a boat and an airplane. You do what you have to do to get where you want to go.
With building a new home, as long as you understand your specs and the costs of upgrades, there shouldn't be any hidden costs other than landscaping and a deck/ patio.
Ah, no. Window treatments are a BIGGIE. Painting the interior walls. Changing out the light fixtures. New furniture because the old stuff doesn't fit, or you have more rooms to fill. Getting rid of the builder grade plumbing fixtures. And on and on.
Don't buy in a new development if there is any chance you will want to sell while the builder is still putting up houses in that neighborhood.
I built a home in a new development and had to move for a job 3 years later. Sold the house for $10k less than I paid for it...and that didn't count the upgrades I had done after I bought it.
Bought a 15-year-old home and loved it....but as the years went by everything looked dated. Ended up putting in $20k to redo the master bath and kitchen. Sold after 6 years for $10k over what I paid for it (the market had tanked here).
Bought a 35 year old home....money pit.
My current home was the model home in a new neighborhood. We waited a few months from contract signing to closing so the builder could finish out the neighborhood. We got a significant discount on the price since the home is actually 3 years old, but it has all the upgrades.
If you think you might relocate, I wouldn't build. You'll put a lot of time and energy into a build. It would be a shame to do this and then have to move a few years later.
If moving would make your life better, then I'd try for a new home. That should give you a better return, I think, if you have to move. You might want to move anyway after five years, which is about right for a first house.
If moving would not make your life better, then you would have to consider renting. But everyone is different. You get a nice tax deduction on a home, if you are making payments. And you can arrange the home to your preferences without worrying about a landlord. And you can have a yard.
I don't think owning a home is best regarded as an investment, but rather a choice in lifestyle.
In my town I can get homes built in the 70's which have better construction quality and more finished square footage for the same price as today's 'new constructions' ... basically a 1700 finished square foot home in (my opinion) the better, more centrally located part of town can be had for similar prices to a new 1025 square foot 2 bedroom, 1 bath "spec home" often even without a basement, only a crawl space. To me it's a no brainer.
Reading a book on home inspection is as useful as knowing what 'fuel trim' and 'fault codes' are on a OTB reader for a car though. Check to make sure the wiring is not aluminum, get up in the attic to check for leaks, things of that sort.
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