When you compare the process of buying a home that adequately fits your needs with building a home that truly satisfies your needs, it's easy to see why building is simply better. Many of us would love to design and build a dream home, the house created just for us, but is that something only the affluent can afford? When you custom build, you're getting exactly what you want and you're going to love everything in the house! And aside from the dramatic sense of accomplishment, there are many reasons to consider taking the lead on such a task. We'll list a few of the more timely ones here.
1. A Solid Investment: Homeownership has proven to be one of the most dependable investments in today's economy. Even with current speculations of falling prices, economists like Robert Shiller, Professor of Economics at Yale University can't help but agree that we have seen an 88% overall increase in national home values over the last 10 years. Owning a home may be a personal investment in building neighborhoods and strengthening communities but buying a home is often the first and most crucial step in securing future financial stability.
2. Attractive Interest Rates: Despite slightly increasing interest rates over the last few months we are still experiencing record lows when comparing our rates with the final three decades of the 20th century. According to the Master Builders Association between 1971 and 2001, there were only 13 months where the interest rates actually dropped lower than seven percent. So while we may not be knocking on the door of five and a half percent anymore, we're certainly continuing a steady trend of attractive rates.
3. New Homes Offer More: Typically, homes built today have roughly 700 more square feet of livable space when compared to homes built 20 years ago. This means more windows, more closet space, larger kitchens, and more. When you combine this with lower maintenance, new energy efficiencies, and upgraded safety features; you get a home that not only offers you more, but a home that truly works for you.
4. Lower Material Costs: The Master Builders Association has indicated that the current normalization in the market has already resulted in a drop in lumber costs. The MBA has also reported that material costs have either declined or held steady, and some are currently at a five year low. This could equate to a 10-15% savings in lumber costs for a typical 2400 square foot home. This kind of savings may also be realized in other materials required in the construction of your home.
5. More Home For Your Money: Material discounts, smarter project costing, and being in control of your project from start to finish allows for savings that can easily be converted into a more customized home. An unexpected savings of 3% on plumbing could turn into an extra closet in the master bedroom. Working out a deal on bulk lumber could turn into granite countertops in your kitchen. No matter what the savings, you can quickly convert it into the finer details of creating your ultimate dream home.
6: Instant/Smart Equity: One way to look at instantly increasing the equity of your new home construction project is to consider current tax laws; you are allowed to exclude up to $250,000 ($500,000 if you are married) of gain on the sale of your home. In addition to favorable tax laws, you'll be able to increase your equity by selecting and purchasing your own building materials eliminating hidden fees and traditional mark-ups. Even the combination of working with national and local companies will allow you to negotiate preferred pricing, again adding to your growing instant equity. The reality is that when you control every step of the construction process, you are much more likely to end up with a home that appraises for more than the actual cost of construction. That's not only instant equity, that's Smart Equity!
7. Proven Financial Advantages: When you build your own house you generally pay the suppliers directly which means you omit traditional mark ups and have better access to builder pricing. You can also circumvent the typical padding of builder prices which are thrown in to cover potential cost overruns. Change is a big part of constructing your own home. Change will happen and when dealing with a builder, those changes will be costly. Being in control of your own project can free you from penalties. Lastly, one of the most personal financial advantages of building your own home is the ability to contribute labor. Putting your own skills to work will not only help you realize your dream, it will result in immediate savings. Dreaming big has always been exciting but the chance to actually build one of those dreams simply goes unmatched. From the positive investment strategy to the proven financial advantages, you are in control. Your location, your choices, your dream.