If you are thinking about moving into a new phase of life—whether that’s getting married, adopting kids, or bringing a new kitten home—there’s a good chance you need more space. That usually means a house, and if you’re tired of renting, that gives you two options: buy or build.
You might not have even considered building a house (in this economy?), but you might be surprised at the more cost-effective options. Bottom line: which is more affordable, building or buying a house?
Buying a House
Buying an already existing home is generally cheaper than building, especially when comparing traditional building methods. On average, buying a home costs 34,000 dollars less than building a new one.
However, this doesn’t take into account any repairs or renovations the home may need. If a home is severely outdated, you might need to put quite a bit of money into renovating it to make it a suitable home. Keep this in mind when creating a budget. We also highly recommend having the home inspected before purchasing so you’re aware of any structural issues that could need pricey repairs in the future.
Building a House
Building a house with traditional methods is typically 8 percent more expensive than buying. However, this price difference factors in the cost of purchasing the land to build the house on. If you already own a lot, building a home will be less expensive than average.
You’ll also need to consider the cost of labor, materials, and inspections. If you and your partner can do some construction work yourselves, you can shave off some labor costs—but don’t take on projects bigger than you can handle, as construction is a dangerous industry for a reason.
Alternative Building Options
It’s also important to remember that there are many more options today than there were 30 years ago. You and your family do not have to go the same route your parents did. Here are a couple of alternative building options you may not have considered:
Modern tiny homes are a far cry from the original tiny homes of the 1970s. Many tiny homes are perfectly comfortable, contemporary, and spacious. They use their available space more efficiently than a typical home, relying on creative solutions and multifunctional furniture. You may not be able to bring in a walk-in closet’s worth of clothes, but if you don’t mind a more minimalist lifestyle, it may not be an issue.
Tiny homes can be built for less than 100,000 dollars, making them more affordable than either building or buying a traditional home. If you’re not particularly handy, there are also companies that build tiny houses that will do the hard work for you.
If you need more space than a tiny home offers, a modular home might be a good fit. Modular homes are built almost to completion in a factory, then assembled at the job site. This is different from a mobile or manufactured home.
Modular homes tend to cost quite a bit less, anywhere from 50 to 200 dollars per square foot. The price differs based on location, modifications, and additions you may choose to include.
With alternative options, suddenly building a house doesn’t seem impossible. We hope this information makes the decision to build or buy a house a little easier.