Should you buy or build a home

Buying or building a home is one of the biggest decisions you’ll ever make. It can also be one of the most expensive, especially in today’s market. You need to know what questions to ask and what factors will affect your decision before making a commitment.

If you’re like most people, there are probably some big questions on your mind that aren’t answered by realtors or mortgage brokers. Should I buy this house? Is it better to build than buying? What should I do if my credit isn’t as good as I’d hoped? How much money will this cost me in the long run? Will buying/building now mean more headaches later?

This article answers many questions about whether it’s better for you to buy or build a home. It will also reveal some lesser-known considerations that should be taken into account.

The Benefits Of Buying A Home

Owning your home outright is an investment like no other. When you consider the numbers, buying a home is like making money on your money. Most people put down 20 percent of their funds towards the house and make monthly payments on the remaining 80 percent over 30 years, paying less than what they’d pay in rent and increasing their net worth at the same time. This should be compared to renting, which doesn’t increase your net worth and never feels as stable as owning your own place.

Buying a house builds equity quickly because mortgage interest rates are typically lower than rents, so you’ll save more per month for faster repayment of savings. If you stay at one job for several years or more, it’s likely that you’ll see your net worth skyrocket.

You can build equity on passive income by increasing the value of your home over time through renovations and smart investments in the home’s overall potential resale value (i.e., adding a porch, re-rendering the exterior with siding, etc.). This can help you afford more expensive homes in the future as your income increases.

It’s easier to enjoy life when you have more stability. When you buy a home of your own, it becomes one less thing that is out of your control. You’ll also reap the benefits of both building equity and buying something outright because they allow you to make bigger financial decisions without fear of repercussions if things don’t go as per the plan. More considerable investments like cars and vacations are far more common among homeowners due to this reason; people who don’t feel like their rent money is really theirs or that they could lose their house at any moment (due to eviction) will often choose not to make these kinds of expenses. Read our article on Home Equity Line of Credit to know more about how home becomes your equity.

2. The Benefits Of Building A Home

People who build their own homes are given an opportunity that most people don’t get; the chance to create the dream home they’ve always wanted without having to adhere to someone else’s design choices. This is especially important if you have specific aesthetic priorities in mind that haven’t been met by other homes in your area already. For example, it might be crucial for you to have lots of natural light throughout, so being able to custom build according to this requirement can help you avoid living in the darkness just because no two houses were designed with enough windows included beforehand. Building from scratch gives you more freedom when it comes to designing, and that’s invaluable.

You can design a home according to your needs. When you build a house from the ground up, there’s no need to compromise on anything. You can have just about anything you want to put into the foundation of your new home because it’s being built from scratch anyways. For example, some homeowners will add a laundry room just outside their master bedroom so they don’t have to walk all the way downstairs in order to do their laundry.

It allows you to make higher-quality home improvements. Building a house from scratch gives you the ability to make higher quality “upgrades” as well (assuming you want something more than those included with an existing home). For example, if you build a new porch onto your front entranceway, you’ll be able to choose the best wood and building materials for it because you’re not constrained by any other options already set in place. While this is a relatively minor upgrade on its own, it can still offer an immense amount of value over time if only because it allows you to maintain that initial high standard throughout your entire property. It doesn’t let anything go out of style or become damaged too quickly, so it’s one less thing to worry about later down the road.

There are lots of tax incentives available to those who build their own homes. The easiest way to save money when building a home is to apply for the Homebuyer Tax Credit, which covers up to 10 percent of the purchase price (up to $8,000). While this not only helps you afford the costs, it also means that you’ll have less money at stake overall because of this credit, it feels safer to go with the option of building your own home.

It can be cheaper, in the long run, to build a house from scratch. This is one of the most significant advantages of building a home instead of buying one. It allows you to spend less money over time while still achieving the same level of quality and stability as those who buy homes first. It’s costly to purchase an existing property, especially if the owner already made enough upgrades before putting it on sale, so it’s much easier to just build a new one without worrying about all these other options getting thrown into the mix unexpectedly.

Also See: Mistake to avoid while building your home

3. How To Decide Which Option Is Best For You

So at this point, there are lots of good reasons why you should build a new home instead of buying one that already exists. However, other factors might make purchasing a particular property an attractive (and therefore better) option than building your own. For example, if you’re looking to get into the real estate market and you can’t afford to build your own home yet, then it might be best for you to buy another property and fix it up bit by bit. On the other hand, if you want to remain in the same area because of job stability and family ties, then it’s also recommended that you stick with purchasing homes for now. Whatever reason is most important to you will help decide which way is best when it comes to building a home.

Here are a few things you need to consider before deciding either way:

  • How much money you can invest or spend overall on both properties;
  • What your specific goals are and how long you plan to be in this market (buying continues to provide better returns than renting);
  • If you plan on staying in the same area for the foreseeable future, it makes more sense to purchase a home because of all the family connections that come into play;
  • If there isn’t any work available in your area, then you should stick with purchasing homes and not investing time (and money) into building a new property from scratch unless absolutely necessary.

4. The Costs Associated With Each Option

When it comes to buying a property, there are a few ongoing costs that you’ll have to consider. For example, the interest rates on your mortgage payments will add up over time and make this option more expensive in the long run, even if you pay for insurance and ongoing property taxes. On the other hand, since building a new home from scratch isn’t technically considered “buying” anything, there aren’t really any ongoing or monthly costs that you need to worry about. You only have to use money when actually buying materials and hiring subcontractors, which means that you can save a lot of money depending on how much work needs to be done within specific parts of the house/property itself.

4.1. Costs Associated With Buying a Home

  • Closing costs associated with purchasing a home;
  • Property taxes on the new property depending on where you live;
  • Insurance rates will increase to be higher depending on what kind of coverage is required for your particular properties;
  • Interest rates are high compared to other kinds of loans, but they should be expected since you’re borrowing money from someone else in order to purchase this type of real estate.

4.2 Costs Associated With Building Your Own Home

  • There are no closing costs or interest rates associated with building your own home because it’s not technically considered “buying” anything;
  • You’ll need to buy all materials and hire subcontractors in order to get everything done efficiently, which increases initial expenses but decreases long term costs;
  • You’ll need to pay for insurance and property taxes on your newly built home/property, which can add up quickly depending on where you live and how much coverage is required.


So at the end of the day, you should weigh out all of your options before deciding what’s best for your current lifestyle. Do some research on materials and construction costs in your area since this will help you determine whether or not building a home is cheaper than buying already existing real estate. It depends on how much work needs to be done within specific parts of the house/property itself because there are both ongoing and initial expenses to consider with each option.


What’s the difference between buying and leasing?

When you buy a home, it means that you own the real estate for as long as you need it. There are no additional fees or costs associated with owning a home after the initial purchase has been made. However, this option does come at a more expensive cost overall because of interest rates and property tax requirements. Leasing a property only requires monthly payments with nothing else to worry about afterward. It’s generally more affordable in terms of ongoing costs, but if something were to happen, then there isn’t any way for you to continue owning the same space without having to rent from someone else entirely. You can’t sell or give away your leased properties either, which means that you might not have much choice if things do go wrong for whatever reason.

Also Read our article on What is Rent-to-Own?

What are the benefits of owning a home?

There are many different reasons people choose to own homes rather than lease them. For example, it’s considered much more stable in terms of long-term ownership. Once someone purchases a property, they’re free to do whatever they want with it as long as they follow legal guidelines set out by their respective governments. Owning your own home can also give you the freedom to decorate how you want and change things whenever necessary without fear of being fined or harassed by your landlord. If something requires repairs, upkeep, etc., then the costs are all on you, which gives you complete control over what happens to your property.

See Also: Home Buying Myths | Factors Affecting Resale Value of Home

Written by

Rostislav Shetman is the founder of 9Kilo Moving. He has been in the moving and relocation industry for more than 25 years, making him an expert in his field. Rostislav started as a helper, dispatcher and driver and has worked his way up to owning his own company. He takes great pride in his work and enjoys helping people relocate across the United States of America. When he's not working, Rostislav enjoys spending time with his family and friends. They are the light of his life and bring him happiness every day.