When considering the price of building a home, there are many factors to consider. When you consider the energy savings, over an existing home, or the wasted expense of renting, building a home can easily become a great option. One option to consider when considering the price of building a home is not to built at all. Another option is buying an existing home. Let’s quickly look at both.
The Price of Building a Home Options: When is Renting a good Option?
The cost of rent is rising due to increased demand, however renting is a good option only if you plan to leave the area in the next one to three years. It does not make sense to build a home if you are not going to stay long. Likewise buying a home may not be a good option if you will need to sell any time soon. Home values are low right now, but may drop further before they rise again. A home is an excellent long term investment, but on the short term, selling a home in the next three to five years may not be a good option. For that reason renting for a short period of time makes sense. Home building if you plan to live in your home for more than five years does make sense.
The Price of Building a Home Options: Buying an Older Home
The market is currently flooded with older homes. The prices are unbelievably low, and that option can be quite tempting for those on a budget. However consider the cost of utilities with an older home. New energy efficient structures will save perhaps hundreds of dollars each month. Heating and air conditioning historic properties can be especially expensive. Even homes built more recently are not nearly as efficient as new construction. New innovations in insulation such as closed cell and radiant barrier for traditional construction, and structural insulated panels, especially insulated concrete panels, are so superior in R-value that your savings in original purchase will quickly be exhausted, unless you take the home apart and install the proper insulation. The pink fiberglass stuff just isn’t up to par any more.
While the average cost per square foot listed on line can be frightening, there is no need to pay so much if you are handy with tools. Consider buying a shell, and completing it yourself. You’ll save a bundle if you select carefully. By having a contractor build your shell, you get a professionally built structure, but save on the interior where most of the money is typically spent. A shell will cost you $25 or $30 per square foot, compared with $100 per square foot on average for a completed home. There is more information on buying shells and kits in our free book, and in the many articles on this site.
Even if you aren’t very handy and need the services of a homebuilder, throughout the process of building your home, you can still save on your future utilities by building an energy efficient structure. By carefully considering each product used to build your home, you will save money which can be applied to mortgage payments. You can also save on interest by shopping around for the best loan. Build smaller, borrow less, and choose a 15 year loan over a 30 year mortgage for incredible savings. For more information on loans, download our free book, and read the many loan related articles found on this site.
Whether it is wiser to buy, rent or build depends on your situation. Deciding between a shell and a homebuilder completed home, depends on your own talents and skill levels. Building a home is a great long term investment, but could be expensive if you plan to sell in the immediate future. A brand new energy efficient structure that meets your needs perfectly will pay for itself over time, and it is a very wise investment. The price of building a home must be considered as compared to the cost of not building a home.