(Closed) Buying a lot vs. building a house

posted 8 years ago in Home
  • poll: Would you save up to build or buy a lot and build on it later

    Save up and just build your dream home

    Buy the lot first and live on it in a trailer, you can always build later

    Buy the lot and continue to rent until you can build a house

    Other (will write more below)

  • Post # 3
    10635 posts
    Sugar Beekeeper
    • Wedding: January 2011

    Are you looking to build in a city or not?

    If you’re going to be in a city, you may have difficulties buying a lot.  Often, builders purchase the lots and you select the lot from them.  If you are able to purchase it yourself, you probably will not know what is going to be around your place when you purchase it.  There may also be restrictions about what can go on it (a trailer may not be allowed) and when building has to begin.

    If you’re planning on building a lot out of the city, I have no advice!

    Post # 4
    2555 posts
    Sugar bee
    • Wedding: May 2014

    On one hand, I agree with your SO that a trailer would be a good idea to NOT be wasting money on rent.  On the other hand it’s a trailer.  Not that there is anything wrong with a trailer, but I couldn’t imagine living in one for a few years (some are pretty small!).  Also, depending on the size of your lot, it may be difficult to build with a trailer on your property.  Also, you’re right, you may not get back what you paid for the trailer, so, in a sense, that’s wasting money, too.  You guys would really have to sit down and weigh the pros and cons & compare the financials of both.

    That being said, I know nothing about building a house, but I do know that the few people I know who are in the process of doing so (or have done so), did live in a house they already owned or rented while doing so.

    Post # 5
    80 posts
    Worker bee
    • Wedding: July 2014

    I don’t know if this will help you out but this is what we did/are doing.

    My SO already owns his house in the city but our dream is to build a house in the country. We were looking at land for a while that was all uncleared and not in the exact spot we wanted. Finally we came across a small cottage in the exact spot we wanted. We fell in love with the property and got it for the same price as an uncleared piece of land (this is mature grounds with a half decent cottage on it). We were going to tear it down and take a couple years to build our new house, but after a lot of thinking we decided we are going to live in it the way it is (with a few good renos) and build out new house while living in our newly done cottage, while renting out SO’s house in the city.. it’s a win win win!!!

    Post # 6
    10360 posts
    Sugar Beekeeper
    • Wedding: September 2010

    I’d rather buy in the city and build equity/cash in on the market when it comes time to build than live on a plot of land in a trailer waiting to build. Why not have the best of both worlds? I would love to build but i’m not personally willing to sacrifice living in a nice place just to save money faster.

    Post # 8
    7309 posts
    Busy Beekeeper
    • Wedding: October 2011 - Bed & Breakfast

    I would just save up and do it all at once because that’s how I function. If you buy a lot and let it sit empty for years, you are still liable for anything that happens on the property. And what if you change your mind between now and then? What if you have to move for a new job or need to be in the city because of some sort of medical condition and need to be very close to the hospital? A lot can change in only a few years, so why tie yourselves to a piece of property that may not be just right 5 years from now when you are ready to build?

    Post # 10
    3355 posts
    Sugar bee
    • Wedding: May 2012

    DH and I are so fussy about what we want about our house, the only option is to build. It won’t be for at least another decade, but we would definitely be buying the lot and building. No point waiting!

    Post # 11
    2022 posts
    Buzzing bee
    • Wedding: May 2013

    This is pretty common where I am from – except, instead of buying a trailer.. the couple will build a detached garage (for the future house) that has living quarters upstairs.  So you wont be wasting money on a trailer – youll be spending it on an extra for your future beautiful house!

    Post # 12
    238 posts
    Helper bee
    • Wedding: June 2016

    Fiance and I have dreams of building a house in the country as well. I have no advice, but I’m bumping this to get advice when I need it =]

    Post # 14
    344 posts
    Helper bee
    • Wedding: September 2013

    We built and I wouldn’t change a THING.  Soooooooooo worth it!

    Post # 16
    3470 posts
    Sugar bee
    • Wedding: July 2012 - The Gables Inn, Santa Rosa, CA

    What’s the opportunity cost of the trailer vs. renting… 

    For example:

    You will spend 5 years saving for buying a lot & building a house.  To make it easy, lets say in 3 years, you can afford the land. 

    Then for the next 2 years you have 2 options: 

    Option 1– Purchase the land, and purchase a trailer. 

    Option 2– Keep the $$$ in savings, and continue to rent for the remaining 2 years. 

    So, what you need to do if figure out the net cost of the trailer– for example, if you but a $50,000 trailer, and in 2 years you sell it for $20,000; the net cost is $30,000.  Vs. The net cost of renting for 2 years, For example, say your rental costs $1300/mo for 24 months, the net cost is $31,200.  In this example, it would be betterto take option 1.  But, say your rent was only $1,200/mo, that’s $28,800 over the 2 years, and thus a better option. 

    Either way, you’re “throwing away” money on your living situation until you can afford to build the house.  The up side to buying the land sooner, is you are able to start paying it off sooner, you also have the freedom to find the perfect lot of land without rushing to get things built, since you’re still saving.  There’s also the real estate market to consider, prices are at all time low’s in a lot of areas, there’s something to be said for buying before the market rebounds.  BUT, waiting to buy and staying in an apartment would make things easier in the long run– less transactions/fees to pay and you don’t have to try and sell the apartment after the house it ready, you just move out. 

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