Chances are that buying a home is one of the largest investments you’ll make in your lifetime. As you decide between buying an existing home or building a house, you have many options. Sure, the excitement of building a new home is hard to contain. Who doesn’t love a brand new home built just for them? But existing homes have benefits too.
Contrary to popular belief, building a house isn’t always less expensive than buying an existing home. Both options have pros and cons. Keep reading to learn about them to see which choice you should choose.
It Comes Down to the Price per Square Foot
Depending on where you live, you could probably find reasonably priced existing and new houses. The current cost of construction and materials may sway the cost of building a little more, but you get the idea.
So how do you decide between the two? If it strictly comes down to money, figure out the price per square foot. Divide the total cost of the home by the square footage. For example, a 2,000 square-foot home selling for $200,000 costs $100 per square foot. Compare that to the cost per square foot of a new home. New homes often have more square footage, so the total price may be higher. What we are concerned with here is the price per square foot.
With a new home, you can downsize the square footage, should you need to keep the total price lower. Figure out first if it makes sense to pay the cost per square foot. Then you can decide how much room you need and where you can spare costs.
The Cost of Maintenance Matters Too
Now there’s the matter of maintenance. Older homes need more work, obviously. The exact cost depends on the condition of the home. A proper home inspection can help you determine what may happen. For example, does the roof only have a few years left? Is the furnace about to give out? Does the home need all new appliances? Factor these things into the cost of the home’s maintenance.
A new home, obviously, has less upkeep. Since everything is brand-new, you won’t have to repair or replace anything right away. New homes typically have a home warranty too. Know the warranty’s terms because new things do break from time to time. Know what’s covered and what would be your responsibility.
The Energy Efficiency Affects Your Costs
New homes are generally more energy-efficient than older homes. Whether it’s due to the newer materials or the energy efficient choices you build into the home, you cut down the cost of utilities. The savings on utility bills could help make the newer home more affordable.
While it’s impossible to guess how much the utility bills on a new home may cost, you can ask for the average cost of running similar homes in the area. You can then compare that to the cost of heating, cooling, and running an existing home of similar size in the area. Typically, older homes have less efficient windows, doors, and building materials. This makes it more expensive to heat, cool, and run the home. It also puts more wear and tear on the HVAC systems.
The Curb Appeal Affects Your Costs
Finally, new homes have zero curb appeal, unless, of course, you figure the beauty of the home itself. Your builder may include a few scant bushes or trees, but nothing that will compare to what you would get with an existing home.
If curb appeal matters to you, consider the cost of landscaping a new home. Also, consider the cost of maintaining or even replacing existing landscaping at an existing home. If you don’t love the landscaping, you may want to tear it out and start fresh. If you do love it, but it needs some TLC, that costs money too, but typically less than installing new landscaping might cost.
So what’s cheaper – an existing home or new home? The answer is that it really depends. Look at all of the factors that play a role in the cost of the home. Don’t just look at the cost of the home itself, though. Look at the ongoing costs, such as maintenance, repairs, utilities, and the cost of landscaping. Putting as many estimates together as possible, you can determine which home would be cheaper for you.