But what is the real thing that you need to consider? In this article, we will try to break this down by analyzing the advantages and disadvantages of each case.
In either case, what is important to look into is the associated cost of each case among other factors.
Pros of Building a new house
Before we look into the advantages associated with building a house from scratch. Here are some of the key factors that you need to consider first;
a) Look for plots or pieces of land that are at strategic location
b) Ensure the property seller has a reputable brand to avoid being conned you hard-earned money
c) Compare prices in the neighborhood.
d) Ensure the title deeds are freehold so that you don’t have to face the land regulator in the future.
e) The land should be connected to good infrastructures like roads, electricity, and water.
Let’s now look at the disadvantages
Tax benefits: Newly built houses either for a primary residence or commercial use receive tax benefits from the first year of completion. Depreciation and renovation are tax-deductible. This saves you more on taxes you could have to pay the government.
Can build to suit your specifications: New buildings not only give you flexibility in interior design but also in exterior designing of your house. Besides you are responsible for other amenities like a swimming pool, landscape, gardening. You have all the flexibility to choose what best suits you.
The competition for buying a house is often high as compared to land listed for sale in any area. This is more obvious as the ready to occupy is often limited and as compared to the demand for the property.
Lower maintenance cost: A house that your build from the ground tends to have the lowest cost of maintaining as compared to an old house that you buy in the market. This is because, old properties have cost that is associated with renovating, fixing broken sections in the house and this increase the cost.
Takes time to build: New properties often take between 7 months and 12 months to build completely. If you needed a house to readily occupy then, you will have to look for another property to rent in the meantime.
Besides that, the cost of building a new house is 20-30 % more than the cost of buying ready to occupy.
Pros of buying ready to occupy
Houses for sale tend to be in well-developed estate with good infrastructure like well connected to basic amenities like water, electricity, roads, sewer system and good road connections.
In addition, most properties on sale tend to have done landscaping and other home facilities like a swimming pool.
The buying process of a ready house often takes roughly 3 months to complete the process and start occupying. This is a good advantage that can help you save on your monthly rent.
Cons of ready to occupy
Transfer duty: As a buyer, you will have to shoulder transfer duty for the house that your buy. Sometimes if you are not careful, you can inherit the tax burden from the previous homeowner.
Old design: Most houses that are on sale are distressed because of their old school design that is not best for the modern era of generation.
Need renovation: Renovation of the house that you buy is an often inevitable case that you need to prepare and have some budget for it.
So what is the pivotal question: Is it cheaper to build or buy ready to occupy? When you do proper calculations, you will find that a new home is more expensive than buying an old house. However, there are more benefits associated with building new like saving on the maintenance cost in the long run as well as having to enjoy the comfort that comes with building a home in a well develop land that you choose when purchasing.