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Buy or Build a House – Which is Cheaper?
So you finally decided that you are ready to put down roots. Now you are just wondering – would it be cheaper to buy a house or to build one? Unless you have access to an unlimited source of cash, you are going to want to weigh the pros and cons of new and old construction.
Read on to find out all you need to know about purchasing an existing property compared with having one build from scratch.
Upfront Cost
Existing Home
Based on the latest figures, the average cost of buying an existing single/family house is C$280,000. That’s about C$185 per square foot for the average 1500 square-foot home that is built before the ‘60s. Of course, the price can vary depending on the location.
New Construction
Now if you are building new construction, you’d spend an average of C$363,000, which is C$83,000 more than an existing home’s cost! New homes, however, are often more spacious with a median size of 2, 467 square feet, making the cost per square foot lower than existing homes. Another advantage is that you would have your home exactly as you want it to be with only the features that you need. Of course, if you find an older home with everything perfectly matching your needs, that’s the more economical choice!
Maintenance
Existing Home
Naturally, older homes would have more wear and tear, so they may require more maintenance. Some parts may need replacement. The cost of the upkeep won’t be cheap so make sure that you’re aware of the age of the most important elements in the home. For instance, furnaces are expected to generally last for 20 years. HVAC systems last for around 15 years. Another potentially costly element is the roof. Shingled roof typically holds up to about 25 years.
New Construction
One of the main benefits of building a home from scratch is the fact that everything is new and covered by warranty. Often, the entire home is covered for 10 years or so! That means maintenance for a decade could be none at all!
Energy Efficiency
Existing Home
Older homes (about 40 years old or so) means parts and elements are also aged. Windows and appliances are dated and you’ll probably be wasting too much energy if you don’t have them replaced.
New Construction
New homes built from the ground up are almost always better than old homes when it comes to energy-efficiency. Typically, homes that are built after 2000 consume about 21% less energy (for heating) compared to older homes. This means that you’ll enjoy increased energy-efficiency and lower energy bills!
Appreciation
Existing Home
Another thing you’ll love about hold homes is that there will be context to the purchase you’re about to make. Meaning, you can do your research and find out about the home’s previous sale prices, as well as how much similar homes in the area are selling for. This will give you a feel for whether the prices are falling or rising in your specific area. If the prices have been rising steadily, there’s a high possibility that this trend will continue and that’s definitely a good thing for you should you decide to sell in the future.
New Construction
New homes, especially those in up and coming neighbourhoods are a little bit riskier. You won’t have a proven track record because there will basically be no sufficient data that can let you know what’s going to happen. This holds true for the latest amenities you might want to have in your home. There are just some trends that fade out quickly which can easily negate any appreciation.
So which is cheaper and better for you – an existing home or a property that is built from scratch?
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“This was the first time we had to sell, coupled with the complication of going through the splitting of finances. We came across the RW Carr Investment Co. website and saw the ‘Services’ section with ‘We Buy Houses Fast’. He proved to be the most helpful, efficient and professional in explaining, and carrying out the process. He was also supportive both before and after the sale.”
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“This was the only sale we had had to make since we lived in our home for 43 years. Ryan was always very quick to respond to everything we asked and explained them in detail. The whole closing process went very smoothly. Certainly can recommend him highly.”