Buying vs Building A House (Pros & Cons)

i’m here to help you master your money and build your wealth in today’s video which is sponsored by policy genius more on that later we’re actually going to be discussing whether you should build or buy a home and some of the pros and cons that come with doing both of those things

so with real estate prices at all-time highs at the time of this recording and with interest rates that are extremely low right now people are actually starting to consider building versus buying used or buying an existing home

so in this video as i mentioned we’re going to talk about some of the pros and cons of building a home

and i’ll touch on the existing home portion as well let’s get into it okay so the way i’m going to present this is with the pros and cons of building a home and i’m going to interject the pros and cons of buying an existing home so this will make more sense once i start so let’s get into it

number one is you get exactly what you want when you are building a home that is obviously the reason why you are building a custom-built home so you can get exactly what you want

so you’re in complete control when you build a home you can work with an architect a general contractor you can be the general contractor you can work with a builder

but basically you have control over the floor plan the finishes the layout the colors the landscaping

pretty much everything it’s a blank canvas in most situations

unless you are in a cookie cutter development which i’ll talk about later in the video

now to counteract that point with an existing home you can still finish an existing home the way

you want however you lose a majority of the control when you’re talking about layout and floor plan so with the layout and floor plan

sometimes you have load bearing walls that you can’t demo sometimes you have certain structural issues that you can’t change

so that’s definitely a pro in favor of building a home

now the second point that most of you may not think about

is that there are no bidding wars when it comes to building a home

so in my market right now houses are getting bit up thousands of dollars over asking price just because there’s such low supply and so much demand in the market

with a new home there is no competition unless you’re literally

you know trying to compete and buy a certain lot or buy the land

that’s typically when you have competition with newer homes however when it comes to building the home say you already own the lot

there’s no headache and no bidding wars when it comes to that

number three there are no headaches with building a new home

and for anybody that’s built a new home you’re probably like hitting the dislike button you’re probably saying marco you’re an idiot what are you talking about

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so new homes have little to no maintenance because literally everything is new

with existing homes you have to worry about the roof the mechanicals the finishes

the windows the lighting all that stuff may be decades old depending on what part of the country you’re buying in and how old the original house was built so if the original owners didn’t do any of that stuff guess who has to foot that bill

it’s either going to be you or hopefully your insurance company but

that’s that’s a topic for another video so no headaches with a new home and yes trust me i’m going to get to this asterisk on on the flip side of the video

so number four newer homes or new homes are obviously more efficient they’re typically more energy efficient because they’re using better technology they have newer windows they have improved technology with the mechanicals and they’re also using energy efficient materials so if you’re somewhere that has four seasons

this is very important because it’ll get you need your house to stay hot in the winter and you need to be cool in the summer

and all of these newer homes have energy efficient technology

that lets them do that number five is that

this is common sense with a new home is that you are the only owner so think of this as a one

owner vehicle or a one owner car you’re the first and only owner of the house so far meaning that with existing homes you have to

the previous owner may have had pets they may have had uh

mold they may have been dirty people in general they may have been hoarders you don’t know

the worst thing is they may have been smokers actually where the walls are literally

yellow but hopefully that gets remediated before the sale

so my point is is that you know that everything in this house is fresh it’s new

if you’re a clean person you can maintain it for years or decades without the house ever having any of those issues from an existing owner okay so let’s talk about some of the cons of building a home and i’m going to interject some points of existing homes and that as well so number one

is stress building a home is incredibly stressful

especially if you aren’t on the same page as your spouse or significant other so i continued the asterisks from the pros because

i didn’t mean to make it say that building a new house has no headaches whatsoever

i meant once you’re moved in and settled in and everything is working how it should

then there’s typically no headaches because everything is new

however the process of building a home is extremely stressful

so you have to buy the land you have to get the financing if you’re not paying cash

you have to deal with the general contractor or the project manager or the subcontractors if you are the general contractor

or the builder sometimes i know couples that have gone through this process that have gotten a divorce

during the home building process because it is so stressful

so what i would recommend doing is getting a dedicated project manager especially if you’re working one of the national builders like adries or orion homes or whoever

they will help you get through this process and alleviate some of this stress

the thing with existing homes is that you know exactly what you’re getting so it alleviates some of that stress yes you can still disagree with your partner on fit and finish and colors and things like that

however when it comes to floor plan and layout and all that

you know big stuff and managing subcontractors an existing home doesn’t have any of those headaches

okay so number two you have to wait to move in

so depending on your builder and the type of home that’s being built you have these national builders that build these cookie cutter homes that go up in 90 days

then you have custom built homes that could take anywhere from you know a year to two years depending on the size and scope of the project

it typically takes 90 days to about two years to build a custom built home so what are you going to do that whole time typically you have to either rent a space whether it’s an apartment or an existing single family home

i actually had a tenant in one of my properties he was a domino’s franchisee owner

this guy made like 20 30 grand a month he owned a bunch of these dominoes and he actually rented from me and he was the best tenant ever however he did leave about a year and a half later so existing homes you don’t have to do this because it already exists so you don’t have to wait to move in you pick a closing date you get the keys you change the locks boom you’re moved into your new home

so move-in weight is a big issue with new homes number three is that there’s little negotiation

little to no negotiation so you know me i’m old school i like to haggle on everything

with existing homes you can haggle on the stuff that’s inside the house you can hang on the price of the house you can say hey

your roof is old knock off you know 15 grand off the price of the house you know otherwise get it fixed that kind of a thing

with new homes there is little to no negotiation so other than materials you know say you’re buying in bulk for example

it’s hard to negotiate the price on building a home

especially with a national builder because typically they know their margins and their prices are set okay so with an existing home you have a lot more

negotiation room number four we’re going to talk about hidden costs so new homes are

advertised as starting at however you don’t really start racking up the bills until you start adding what you really want

so as i mentioned earlier in the video fit and finish and things like that play a big role in what the price per square foot is ultimately going to be for the cost of the house

so there’s a big difference between you know custom cabinets and granite countertops than

you know something that comes from like rooms to go or something and you get it done for super super cheap

so if you have laminate countertops and you know not custom cabinets of course there’s going to be a big difference there

so with existing homes you don’t typically have hidden costs unless you’re talking about closing costs and things like that that you just simply weren’t aware of

but when it comes to you know fitting or outfitting an existing home

the hidden costs aren’t there and then finally we have construction and landscaping so this is my beautiful drawing of an evergreen tree that’s that means landscaping in my hieroglyphics but that’s why you watch this channel for my art abilities right so you typically if you’re moving into a development for example and you’re one of the earlier purchasers

obviously your house is going to be built before everyone else is so you’re dirt you’re dealing with noise dirt mud you know debris potentially nails in the road things like that also no one’s going to have landscaping for a year year and a half to two years the other thing with that that no one really thinks about not only does your landscaping look like crap

every nothing is mature okay so existing homes they may potentially be in a mature development

so they’re gonna have beautiful you know tall trees evergreens things like that depending on where you live

with the cookie cutter developments where they just buy a big tract of land and just flatten everything

you know that’s not a mature development it’s just going to be literally a cookie cutter development so obviously you can buy a

buy a plot of land and build a new home somewhere super nice

but i’m just talking about for a majority of the people watching this video okay so finally i finished every video i make with my thoughts at the end and that’s why you should stay until the end not because you want to hear my thoughts or because i’m a genius because i’m not i’m just a regular person on youtube

it’s because this is where you can apply logic to what i just presented and you’re also helping the youtube algorithm just let all my videos play let them go to the end and smash the like button

just click the like button don’t smash it don’t annihilate it uh i digress so anyway my thoughts on this are what can you afford okay so i know most of you came to this video

uh wondering what my opinion is on whether you should build or buy or what the numbers work out to be

that’s impossible to answer real estate is hyper local it all depends on where you live

you can literally be on a different side of the train tracks and it changes the numbers completely

so i cannot possibly create a video encompassing

uh the entire country or the entire world to be

exact because i have viewers all over the world so first and foremost what can you afford it doesn’t matter if you want a brand new house if you can’t afford it

if you cannot afford to build a new home then you have to

settle with an existing home and then you have to settle with an existing home that you can actually afford okay number two is that it’s just the house yes your house is your sanctuary it’s where you relax it’s where you raise a family it’s where you’re part of a community

it’s where you know you go to unplug i get all that trust me

however once you get bombarded with all these videos on instagram and youtube and

hgtv and oh you know i’m a teacher i’m a butterfly collector

and i’m looking at houses in the neighborhood of 700 000

you know it’s like what you know like are you even a real person

uh so what my point to all this ramble is is that

that allure goes away over time okay so yes when you’re moving into a house you want to outfit it you want to finish it you want to do all your you know furniture you want to make it your home i get that but trust me that goes away and guess what it just turns into a money pit over time it’s a liability yes on your balance sheet a house is an asset of course

but at the end of the day it truly is a liability because you’ll always have property taxes

you’ll always have maintenance you always have upkeep and and stuff breaks okay so remember these two things and you should be a-okay

as always if you got value out of this video please share it with one friend smash and annihilate and destroy the like button that seems to work i guess

or you can just click on it and then subscribe and hit the bell notifications and share this video on social media thank you so much and have a prosperous day

yeah maybe it’s just the house to you when you’re living in 800 square feet i’m in 3 600 square feet baby i’m stunting on him with that youtube money you know what i’m saying son you know what i’m saying just a house to you son it’s what we do on whiteboard finance let’s go.

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