Building vs Buying Property: Here’s what you need to know

Investing in your dream home comes with a hefty price and many decisions. Like buying an existing home or building a brand-new property. But which one is the most cost-effective option? Here’s what to know, according to the experts.

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PROPERTY COST DECODED: BUILDING VS BUYING

Building your dream home versus buying an existing home – it’s a rather tough decision.

In an interview with BusinessTech, Grant Smee, Managing Director of Only Realty Group, explained that there are various factors, including location, customisation options, and long-term value, to consider.

“However, in a high-interest rate environment and with the rising cost of living, one of the most important considerations for many people will be which option is more cost-effective,” he told the publication.

Cost is the ultimate decisionmaker. Here’s a look at the pros and cons of building a home from scratch versus buying and perhaps renovating an existing property.

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BUILD YOUR DREAM HOME

Although building your own home sounds like a dream, there are a few factors to consider.

According to Donovan Els, owner and project manager at NHBRC registered construction and project management company Building Solutions, “building costs can run anything from R10 000 per square meter to R30 000 per square meter,” determining on the expansiveness of the built.

Apart from cost, choosing the correct stand to build your dream home on, deciding on the size of your build, and finding a qualified and capable contractor is also crucial, Els adds.

“One must remember that building a house can take anything from six months to a year to build. Also, keep in mind that you will have to work alongside the contractor the whole time, and it is important to maintain an honest and respectful relationship. If you have the budget to get a Qualified Project Manager to run your site, it’s a bonus! This will make the stress and planning process less of a headache,” Els says.

BUY AND RENOVATE AN EXISTING PROPERTY

Buying an existing home can save you valuable time, construction headaches, and money. But is it the better option?

According to BusinessTech, an existing home is usually situated much better than a vacant piece of land, often meaning proximity to schools, grocery stores, and medical care. If recently renovated, existing properties often also already have add-ons like a pool.

Worst-case scenario, you might have to do a few upgrades or repairs, so keep those costs in mind. And then there is also maintenance.

There is also the bond registration, transfer costs, transfer duty, and conveyancing attorney fees to consider, Old Mutual reports.

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