Buy a property with a house on it or buy a property and build a house? Which is best and most affordable?

[basstracker89]

I can see it both ways. I am a licensed builder and worked in the industry for 40yrs. I've done it both ways. Bought a new home, the profit margin was @ $4-5k when I bought it. 36yrs later, sold it it for 4x what we paid for it. Bought an older existing home this last time. When we finish fixing it up, it'll be worth 3.5x what we have in it.
Thing is, if you want a good building site you'll almost have to find an older built on site. Plus with an older home, you can be more practical about how you go about fixing it up. Ie., using old school craftsmanship. You build a new home, you're going to be hit with things you never thought about. New building codes, environmental impact fees and unscrupulous contractors. Plus these days you have to get things engineered, another cost to deal with. Then suppliers have things sewed up. If you're not on their list, good luck. The products used in an older home are better quality than what they use now. Not saying a new home is bad. If you've worked with materials as long as I have, you'd know what I'm talking about. Our home is 57yrs old and in pretty good shape. Good luck with that kind of history in a new home

 

[rockyfatcat]

I seriously looked building on an empty lot within an airpark. That means the roads within the property are also taxiways for aircraft. That also means my house would have an extra large garage that is also a hangar.

When you sit down and look at what it'd take for a new build, you'll be 2 years away from moving in.

I am currently rehabbing my old house, complete remodel, new roof trusses, new floorplan, the whole nine yards. No HOA, A lot less headache not having to deal (as much) with building codes, zoning etc. Still expensive, but more controllable.

For a remodel like I'm doing, the biggest pieces of the puzzle are property location, property size, and the existing building skeletal structure. What is it and what would you like it to be?

 

[medium187mph]

Realtor ?

I have several close friends of mine as well as my sister who all purchased decent size plots of land and used a local builder for their homes, most were brick type builds as well as barndominiums.

My cousin secured a 125 acre plot and has a 4500sqft main barndominium with a custom 1800sqft mother in law suite built joined by an approximate 200x100 covered car garage toy room. I want to say it was around 600k plus and it’s about 95% done now.

 

[roundhouse]

How long you wanna wait on it and how much stress do you wanna subject yourself to ?

A new build with take at least two years from the time you buy the land

And it’s a pain to get a loan for raw land and a pain to get a construction loan

We did a significant addition to our house and Covid happened right as we were getting started .

We had to get a zoning variance and the city had suspended all meetings because of Covid , so a 3 months delay.


Six week wait for concrete and if it rains on your appointment day , you’re back at the bottom of the list waiting another six weeks

It rained on our first three appointment days . Took 20 weeks just to get the footings poured .

The day before our roof trusses we’re supposed to be delivered the warehouse they were in caught on fire .

So 8 weeks delay to get more new trusses built .

Then scheduling the trusses to be set required a day thatthe crane company was available and ga power was available to drop the line so the crane could manouver , and the framers were available .

And everyone shows up on that day and ot started raining and the crane guy thought he saw some lightning and called it off .

So another four weeks delay

Etc etc

Every step of the build is like this on every house .

 

[pokus]

If you buy an item off the shelf or lot that is finished you are buying a known quantity for a fixed sum (barring what is done prior to close or sticker) People that do not have experience with the business of building as well as the cash to build plus credit and willingness to leverage the property or are risk averse should not build - period.
When you are buying land and building (the house does not exist) you are buying an idea or a plan
If you are savvy (and or are capable as well as committed to doing a substantial sum of the work yourself) and financing it with your own cash building is expensive but can be satisfying even rewarding
If you are not experienced and building with borrowed money buying land and building is risky and rarely (like very rarely) an immediate good ROI

 

[basstracker89]

How long you wanna wait on it and how much stress do you wanna subject yourself to ?

A new build with take at least two years from the time you buy the land

And it’s a pain to get a loan for raw land and a pain to get a construction loan

We did a significant addition to our house and Covid happened right as we were getting started .

We had to get a zoning variance and the city had suspended all meetings because of Covid , so a 3 months delay.


Six week wait for concrete and if it rains on your appointment day , you’re back at the bottom of the list waiting another six weeks

It rained on our first three appointment days . Took 20 weeks just to get the footings poured .

The day before our roof trusses we’re supposed to be delivered the warehouse they were in caught on fire .

So 8 weeks delay to get more new trusses built .

Then scheduling the trusses to be set required a day thatthe crane company was available and ga power was available to drop the line so the crane could manouver , and the framers were available .

And everyone shows up on that day and ot started raining and the crane guy thought he saw some lightning and called it off .

So another four weeks delay

Etc etc

Every step of the build is like this on every house .

A lot of truth here

 

[basstracker89]

If you buy an item off the shelf or lot that is finished you are buying a known quantity for a fixed sum (barring what is done prior to close or sticker) People that do not have experience with the business of building as well as the cash to build plus credit and willingness to leverage the property or are risk averse should not build - period.
When you are buying land and building (the house does not exist) you are buying an idea or a plan
If you are savvy (and or are capable as well as committed to doing a substantial sum of the work yourself) and financing it with your own cash building is expensive but can be satisfying even rewarding
If you are not experienced and building with borrowed money buying land and building is risky and rarely (like very rarely) an immediate good ROI

And then there are the perc test for the soil. That can be another problem. Not to mention, you have a loan? Then the bank wants to tell you what to do. Not trying to scare you, just inform you

 

[basstracker89]

3rd option, rent

No offense, but that's a dead end

 

[rockyfatcat]

3rd option, rent

I'm getting unsolicited offers 100k over what I paid, for the house I bought 11/2021.

Renting isn't a long term investment or solution. Remember every additional dollar they print devalues the money in our pocket. The politicians call it inflation, like it is something magical. It isn't! It is printing money to monetize the debt. How many trillion dollars have they overspent recently?

I had this same conversation with my favorite liberal in Omaha Nebraska. I was proud of the fact that the house he bought in 2020 was worth 100k more than he bought it for.

My question to him was has anything been done to the house to make it more valuable, has the local demand for housing increased, or have they printed so much money that it now takes 100k more cash now to buy the same house?

 

[GFB]

I know OP was looking at different areas for retirement. Not meaning to derail with the rent talk, but if you have a house being built, make sure you're around. If it's going up too far out of your current area, it's a good idea to rent something nearby so you can keep your eye on it. Do not ever take a general contractor at his word without verifying the work has been done. Some are on the up and up, some are not. I would be willing to overpay for a gc with a good reputation.