Owning your home is the great Aussie dream.
For those in a position to achieve this, there are two ways you can enter the property market. Either you can buy an existing property. Or you can purchase land and build your own home on it.
The most obvious difference between the two is that people have already lived in an existing home. While you will be the first person to reside in a new building.
However, like with anything, there are pros and cons to both options. At the end of the day, your choice will come down to several factors. These include location, price, requirements, timescales, and personal preference.
In this article, we will look at both options individually to help you decide which one is right for you.
Buying an established home
Predominantly, there are two main advantages to purchasing an established home. These are cost and convenience.
Essentially, once you have saved up enough of a deposit and have had approval for a mortgage granted, you can search for a home and make an offer on it.
If you are working with a seasoned buyer’s agent or real estate professional, the process can potentially be quick and easy. They will do the bulk of the legwork for you and draw up a list of properties to see based on your needs and wants.
If your offer is accepted, you could be living in your new property within a month, depending on the speed of your lawyer’s work and whether you need to break a rental lease.
For many buyers, this is a very attractive proposition. This is particularly the case for those who are starting a new job, need to vacate a current rental property, or have children who are joining a new school.
Older homes tend to have more potential for renovation, which can add significant value to their original sale price. They are also often located in established neighborhoods that have good roads or transport links. In addition to shops, bars, cafes, and nearby medical facilities.
For those who want to live near family, friends, work, or children’s school, it is usually easier to buy an established home in your preferred location than it is to build something.
The main drawback of buying an established home is that you will inevitably have to compromise on something. Your dream home probably doesn’t exist (unless you create it!). So when buying one that was constructed several years ago, you will have to settle for a concession or two.
This might mean smaller bedroom sizes, less garden space, or forgoing your dream of a walk-in wardrobe. For this reason, you need to decide on your non-negotiables and ensure any property you buy, at the very least, accommodates them.
Advantages of building a new home
The process of building a home – as opposed to buying one that is already established – is much more protracted.
For a start, you need to a find suitable block of land. Then you will have to source a reputable builder and architect you can trust. You will also have to go through the process of designing your home, drawing up a contract with the builder, seeking planning permission, and having it built. There is also the trickier matter of securing a construction loan, which is generally much harder to get than a regular home loan for an existing property.
However, the big advantage of building a new home is that you can customize the look and layout to be exactly to your specifications. This way, you can build your dream home.
For instance, if you want to build a large ensuite in your master bedroom or a nightclub room in your basement, this is something you can work with your architect and builder to create.
Another major advantage is that it is easier to make it energy efficient and environmentally friendly. This could include installing ventilation, heating, and cooling systems, as well as state-of-the-art measures like air filtration, insulation, solar panels, lighting and electrical outlets.
Not only will this reduce your carbon footprint. But it should also lower your monthly running costs and utility bills.
One of the downsides to building a home is that the process can take quite a while. According to Property Register, this process could take up to 6 months if you are purchasing a pre-designed home or up to 16 months if you are having something custom built.
New builds are also at the mercy of the weather, with major events like storms or flash flooding potentially affecting their lead time. You also have to concern yourself with factors like whether the land provides you with access to town water and sewage systems.
That said, building a house provides you with a sense of personal satisfaction that you don’t necessarily get from buying an established home. There is a definite personal collection involved in creating the home you live in. Particularly as it reflects your personality, style and who you are.
Depending on what type of design and finishings you go for, building a home on land can either be a lot cheaper or more expensive than purchasing an existing home. This is something you will have to weigh up before giving the build the green light.
At the end of the day, your decision to build a home or buy an existing property will depend entirely on your circumstances.
This needs to consider what type of home you want to live in and where. It also should take into account your budget, timescale, and lifestyle.
If you are considering buying an existing property, you should be able to complete this process much quicker than if you are building a brand-new home. That said, it is much harder to find everything you are looking for within it an established dwelling. So you will need to factor the cost of potential refurbishments into the purchase price.
By contrast, building a home could be a protracted process. But it could enable you to have the home of your dreams.
Whatever way you choose to go is up to you. Just be sure you will be able to manage the stress of increasing mortgage costs and interest repayments should they arise.