In today’s often overwhelming property market, many Australians find themselves wondering whether they’re better off building a new home or buying an existing home. The decision is not a simple one and involves weighing a variety of factors relating to needs and wants, location and costs.
Whether you’re battling it out at auction or selecting from house and land packages, the most important thing to consider is what you actually want. Do you want an investment property to rent out? Are you looking for a dream home that’s all your own? These questions are a good starting point because buying an existing home as an investment property is a lot less hassle, whereas building your dream home will get you exactly what you want will give you a lot more value.
The next most important thing to consider are your finances and the location you want to live in. As we know, real estate is expensive the closer you are to the cbd. You’re also going to be limited in the amount of land you’re able to get. You also have to consider whether you can afford rent to live somewhere else while building your new home or the various tax and stamp duty costs associated with buying an existing home.
Once you’ve laid out the purpose of the house, the location you want it to be in and your budget for the entire process, you can weigh the pros and cons of building or buying.
The obvious benefit of building your home is that you will get exactly what you want.
You have complete creative control and won’t have to make compromises or promise yourself you’ll renovate later to add that feature you really want. From the big things like the floorplan to the little things like fixtures and paint colors, your home will be built exactly how you want it.
You will also enjoy some cost savings, both immediate and ongoing.
There are savings in the form of tax benefits and reduced stamp duty when you build. Depending on location, the entire cost could end up being cheaper than buying. Everyone is familiar with the high costs of existing homes these days, and anticipated costs can often be driven even higher at auction. When you build, you get what you intended to pay for.
The main benefit of buying is less hassle and a quicker process.
You don’t have to wait months for the home to be built or spend time deciding on every last detail of how the home will look. Not having to wait to move in also saves you money on the rent you would be paying for somewhere else to live while you wait.
Additionally, existing homes generally have a better location than when you purchase land to build on. Existing homes will be closer to the cbd and closer to local shops, schools and infrastructure.
Less hassle and better location also makes buying an existing home better for an investment property. There’s not much point building a house from scratch if someone else is going to live there. Rental properties are also more desirable when in a good location.
Deciding on a new home is a big decision. You have to consider your wants and needs and choose the option that best suits you. Once you have a good idea of what you want and what you plan to do with the house, the pros and cons of building and buying can help lead you to the right choice.