When it’s time to buy your dream home, there are a lot of things to consider. You’re not only choosing what your future home will look and feel like – you’re also choosing how to acquire it. You can turn to a contractor to build it, or you can buy something that’s already on the market – or you can rent your home and never buy it at all.
Should you build your dream house?
Building a house has plenty of pros – and plenty of cons. The pros are obvious: if you choose to build a house, you can customize it in a way that’s impossible with any existing home. Renovations are great, but they can’t match the level of specificity you can get when you work with your architect and home builder to get the exact home you want.
Coming up with a dream home off of the top of your head can be tough (after all, you probably aren’t an architect), but your architect and home builder can help you out by providing you with various starting point options. You can choose from existing blueprints and then customize your home to make it exactly the type of place you want to live in.
There are a downsides to building a home, of course. You need to find a property that has nothing built on it already – or, at least, only has something that you’re willing to knock down. You may be limited to developments in the suburbs, as building a brand new building in a city can be a very costly prospect. And speaking of cost, building a home is far from cheap. Your home may appreciate in value if the real estate gods are kind, but you’ll be in quite a pretty penny to build a brand-new home.
Should you buy your dream home?
If you’re not going to build your dream home, don’t worry – there’s a good chance someone has already built it for you.
Of course, buying a home means that you have to take it as-is – you can’t expect to completely customize it in the way that you could if you were building it from the ground up. Sure, you can plan to renovate a fixer-upper, but you have to expect to keep at least some of the characteristics of the original structure and you’ll have to factor the cost of your planned renovations into your purchase budget. You’ll also, of course, be getting an older house! But don’t worry – a real estate appraisal and consulting firm will be involved with your purchase, so you can rest assured that the house will be valued fairly reasonably for its age and condition.
Buying a house can be more affordable than building one, though, and you can access areas that are too built-up to be eligible for much new construction.
Should you rent your dream home?
What about renting? Well, like everything else, it has its pros and cons.
Traditionally, many Americans believe it always makes more financial sense to own property rather than rent it. A lot of things have changed this over the years, but the drawbacks to renting used in the arguments are still valid. Since you don’t own your property when you rent, you can’t enjoy any appreciation in property values. When you send a check to your landlord, it’s gone; meanwhile, people sending checks to pay off their mortgage are continuing to pay towards a purchase which they can always re-sell, often at a higher price. Owning property is an investment, whereas renting it is an expense.
Of course, investments can go wrong – sometimes horribly so. So it’s not a forgone conclusion that owning property is better than renting.
The benefits of renting stem from the same root cause as the drawbacks: it’s not your home. And while that means you’re cut out of appreciating real estate and are not getting back any long-term investment from your rent checks, it also means that you’re not responsible for any of the expenses that come with owning property. Real estate tax? Not for you! Home services – meaning everything from pest control to home improvement? Not your problem. Any renovations, updates, or costly repairs will be the responsibility of your landlord, meaning that you can rest easy that no catastrophic property problem is going to suddenly bankrupt you.
It’s also important to note that renting is an option that’s available to those without enough money to run off and buy a house. If you can’t yet afford your dream home, it may make sense to rent for a while while you wait – or to keep renting forever and saving your money for some other purpose! There are upsides and downsides to renting, just as there are to buying and building, and which path you choose is entirely up to you.