Weighing The Options Between Buying And Building A House
Culled from www.smartnigerianinvestor.com
When you want to acquire real estate, you have two principal options to effect it: you either buy or build.
Certain inescapable factors can constrain you to one of these options in a particular case. That leaves you no room for any choice. Quite often however, the buyer actually has the liberty and sufficient resources to go either way. But a choice must be made. While personal preferences may count, what technical issues should figure in your decision process? Are there factors to recommend either of them and in what circumstances? This article focuses on the attractions of both options and provides a basis for an informed choice as to what finally pays.
When Buying Wins Top Spot
In the following circumstances, buying will probably be your only choice or, at least, the more beneficial option:
1. When Immediacy Seriously Counts
If, for whatever reason, the transaction is hot and must be concluded immediately, you definitely have no option than to buy. This presupposes that sufficient funding has been secured. Obviously, no matter how much funding is available, some lead time is required for construction, irrespective of the expertise of the builder. Only buying will meet this requirement. Examples: a citizen living abroad who is home for 1 week and wants to conclude a property acquisition in the period must necessarily buy. Again, if a property is being auctioned and you want it, you can only buy.
2. A Fully Developed Area
When your target location for the investment is a fully developed area, you simply have to buy an existing property. You may eventually choose to demolish and rebuild, but you must start with a buying a build-up structure.
3. When Convenience Is Top Priority
If, for good reason, it is not convenient to go through with supervision, interventions to deal with unexpected problems and other issues that are part of a construction process, seriously consider buying. Yes, you can contract out supervision and other details, but your money and investment are at stake. You can’t reasonably keep off. If you can’t have an eye on the job, better cut it short and buy a ready property
4. When You Finance With A Mortgage
A mortgage can finance your self-executed housing project, but getting a facility to acquire land has never been an easy proposition. Fear of title revocations and other uncertainties attaching to land ownership has meant that financiers prefer property with a standing structure. It will be several times easier to get mortgage finance for a built-up property with genuine title than to acquire a vacant plot of land and go ahead to build, even when the land is government-allocated.
When Building Is The Answer
Building will, in the following circumstances, be the way to go to meet your objective:
1. You Won’t Compromise On Personal Design
Configuring your building design to your own taste may be very important to you, whether or not you will occupy it. If you will not accept or be comfortable with anything but a design you scripted, the open choice is to design and build. This can achieve enhanced functionality, better economy of space or other features that matter to you.
2. You’re Particular About Exact Location
If you have a specific choice about certain features of the kind of location you want to own property (this can easily count when you will be an occupant) your best better if to look for a location that fits your specification and build.
3. Desire Full Control Of The Quality Process
When you buy a ready property, you are hardly sure of what went into the construction. Granted that experts can evaluate the structural quality of a property for you, costs are involved and certain details will still not be obvious. That sparkling building may, in reality, be just colourful painting. This prospect is worsened by the weak regulatory and supervisory framework that currently attends our housing construction. If you consider control of quality very critical, the only way to be sure is to take charge and do it yourself.
4. You Aim For A Budget Price For Giant Value
If the goal is to strike an optimal balance between cost and technical quality where both factors score excellently, the winning formula is to build. Especially for large building projects, many factors can bloat the cost which gets passed on to buyers. Even for equivalent quality of work, you get to pay more. It’s worse when a higher price tag is placed on buildings of questionable quality. If the right price-quality equation is what you seek, implementing by yourself will put you in firm control.
5. You wouldn’t Risk Serious Repair/Maintenance Outlay
If you wouldn’t take any chance with getting into serious repair problems, the best way to stay off is a structure you personally built. Not that every purchased property will have serious repair problems, but the risk is there with fairly old structure. New structures that are not well-supervised could also come up with major structural or fittings problems. If you build for yourself, you risk no surprises.
The Approach That Will Work Best For You
Obviously, there is no right way to do it: the choice will depend on the circumstances, as outlined above. So when you need to invest in property, take time to evaluate whether you’d be better off buying or building. At the end, your goal is to get the best deal for each Naira of investment.
