Author Topic: Buy, Build or Wait  (Read 6767 times)

Mariko

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Buy, Build or Wait
« on: May 08, 2024, 11:52:50 PM »
Hello all,

I’m in my early 30s, married and no kids. We currently live in a converted garage apartment that’s about 500 square feet in a LCOL area. My husband and I are both headed towards WFH jobs, my current work is only 10 minutes away. We own a car (paid cash) and have very few expenses.

The 500 square foot house life is starting to get to us and we will need home offices (hopefully) in the near future so we started looking into buying or building. So far in our area there are some good deals in the 200-250k range, but most of them are 1980s or older. Other than that it's mostly Mini Mansions for 500k+++ and way bigger than I ever want to have to clean. I've been keeping an eye on foreclosures as well and can do a good bit of renovations myself but I want to be sure that the long term parts of the house are all in good shape which makes me nervous as a first time homebuyer.

In regards to building, most general contractors are booked out for 1.5-3 years. So far only one builder gave me a general quote which was $250/sqft and they didn't seem interested in options to bring that down (like us doing a lot of the finishings ourselves). I'm looking into other local builders that hopefully will be more interested in building something a bit more plain. Any advice on how to approach contractors to get quotes and discuss costs? Should I be starting with a set budget (ie. $250,000 is my budget and I'm hoping to build at least a 1200 square foot house).

I'm also curious what parts of a house you would skimp on to save or DIY? I've done tile and laminate wood flooring before as well as painting. I'll be doing all the closets, pantry and bookshelves myself since I enjoy carpentry but I'm not skilled enough for kitchen cabinets. I have considered buying affordable prebuilt cabinets and doing the kitchen myself but still a bit nervous about that one.

SunnyDays

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Re: Buy, Build or Wait
« Reply #1 on: May 09, 2024, 11:15:17 AM »
What's wrong with a pre-1980's house?  In my opinion, they tend to be better built than new ones.  When I look at the ones being built around here, they are cheap, cheap, cheap.  OSB board instead of plywood, often on slabs instead of basements, windows that won't last more than 5 years, and basically pressed paper interior doors.  Often things are out of alignment inside.  And these are priced in the 3000K - 350K range.

My house was built in 1971 and I bought it in 1993, so have lived in it for 31 years now.  Nothing major has ever gone wrong; it's just needed the usual updates - a new roof was the biggest one, otherwise all cosmetic.  It even has the same furnace as when I bought it and I've been advised NOT to replace it.  It's as solid as a rock.

Unless you're prepared to upgrade everything beyond builder basic, I wouldn't even consider building a new house.  You can bring an older one up to code with a bit of work.

Mariko

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Re: Buy, Build or Wait
« Reply #2 on: May 09, 2024, 09:56:06 PM »
What's wrong with a pre-1980's house?  In my opinion, they tend to be better built than new ones.  When I look at the ones being built around here, they are cheap, cheap, cheap.  OSB board instead of plywood, often on slabs instead of basements, windows that won't last more than 5 years, and basically pressed paper interior doors.  Often things are out of alignment inside.  And these are priced in the 3000K - 350K range.

My house was built in 1971 and I bought it in 1993, so have lived in it for 31 years now.  Nothing major has ever gone wrong; it's just needed the usual updates - a new roof was the biggest one, otherwise all cosmetic.  It even has the same furnace as when I bought it and I've been advised NOT to replace it.  It's as solid as a rock.

Unless you're prepared to upgrade everything beyond builder basic, I wouldn't even consider building a new house.  You can bring an older one up to code with a bit of work.

I tend to agree that older houses are better built, especially ones that have brick exteriors. I’ve looked into buying an older place but I’m a bit nervous about it since I’m not totally sure what I should be looking for and what to avoid. I said 1980s as a random year that’s older than most houses I’ve lived in/worked on, but honestly most of these houses are closer to the 50s/60s and some even all the way back to the 30s.

Most are partly or fully remodeled but I live in a “buyer beware” state which makes me more hesitant. Of course that still applies to newer houses too since I know things go wrong in them as well (which is why I haven’t been too thrilled about anything built since the pandemic). Mostly concerned about electrical, mold (Especially since I have health issues), asbestos, etc.

How old would you be comfortable with and what you would be looking for/avoiding?

SunnyDays

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Re: Buy, Build or Wait
« Reply #3 on: May 10, 2024, 12:25:03 PM »
It's not so much the age of the house that would concern me (I actually like older homes), but the condition of it.

Things I would check for are: a solid foundation with no crumbling, major cracks or shifting, square outer frame and straight inner walls, floors that don't slope (put a marble down in the center of any suspect rooms and see if it rolls, assuming no carpeting) and no water damaged ceilings.  That's for the general structural condition of the house. 

Further, ask about/look at electrical.  Obviously knob and tube wiring is a no go, although I doubt  you will find that anymore, even on the oldest houses because companies will not insure such a house.  However, aluminum wiring was used on houses around the 60's/70's I believe, so open up a switch plate and take a look.  That wouldn't freak me out though because it can be pretty easily replaced with copper - it's the junction points that are critical, not the whole house.  While you're there, see if you can see the insulation in the wall.  If it's fibreglass, you're fine.  You can also look in the attic to see what's there.  When I bought my house, I had the sellers confirm that there was no asbestos as a condition of sale.  Asbestos floor tiles or ceiling panels in themselves are not a danger unless you plan to remove them, then you need to get a qualified professional to do it. 

Depending on where you live, mold may be more or less likely.  I'm allergic to mold and get very sick from it, so this would be a bigger issue for me than anything else.  But I also have a hound's nose for it, and any significant amount is readily detected.  Just look closely at walls and baseboards, check windows and ceilings for leaks or obvious musty smells.  And of course, any rotting woodwork is a red flag.

So depending on how much I liked the house, location etc, any one of these things wouldn't necessarily put me off.  A combination of them that meant a lot of remedial work might, but if the seller is willing to drop the price accordingly, then it still might not be a deal breaker.  If you can take someone experienced in home construction to look at houses with you, then do so.  Or just get out there and look at lots of houses on your own so you get some practice at it.

FINate

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Re: Buy, Build or Wait
« Reply #4 on: May 10, 2024, 01:27:50 PM »
Renting a larger place is also an option.

Mariko

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Re: Buy, Build or Wait
« Reply #5 on: May 12, 2024, 01:44:54 AM »
It's not so much the age of the house that would concern me (I actually like older homes), but the condition of it.

Things I would check for are: a solid foundation with no crumbling, major cracks or shifting, square outer frame and straight inner walls, floors that don't slope (put a marble down in the center of any suspect rooms and see if it rolls, assuming no carpeting) and no water damaged ceilings.  That's for the general structural condition of the house. 

Further, ask about/look at electrical.  Obviously knob and tube wiring is a no go, although I doubt  you will find that anymore, even on the oldest houses because companies will not insure such a house.  However, aluminum wiring was used on houses around the 60's/70's I believe, so open up a switch plate and take a look.  That wouldn't freak me out though because it can be pretty easily replaced with copper - it's the junction points that are critical, not the whole house.  While you're there, see if you can see the insulation in the wall.  If it's fibreglass, you're fine.  You can also look in the attic to see what's there.  When I bought my house, I had the sellers confirm that there was no asbestos as a condition of sale.  Asbestos floor tiles or ceiling panels in themselves are not a danger unless you plan to remove them, then you need to get a qualified professional to do it. 

Depending on where you live, mold may be more or less likely.  I'm allergic to mold and get very sick from it, so this would be a bigger issue for me than anything else.  But I also have a hound's nose for it, and any significant amount is readily detected.  Just look closely at walls and baseboards, check windows and ceilings for leaks or obvious musty smells.  And of course, any rotting woodwork is a red flag.

So depending on how much I liked the house, location etc, any one of these things wouldn't necessarily put me off.  A combination of them that meant a lot of remedial work might, but if the seller is willing to drop the price accordingly, then it still might not be a deal breaker.  If you can take someone experienced in home construction to look at houses with you, then do so.  Or just get out there and look at lots of houses on your own so you get some practice at it.

Got it, thanks so much for your input. I got the number from a friend for an inspector she highly recommended (he talked her out of the place she was interested in due to concerns about the condition of the house) and I’ll be asking the contractor I was discussing building with if they would be willing to walk a house with us to discuss any issues that might arise.

Today for the first time an older house came up for sale in my price range with a wonderful location. 1979, very well maintained (original wallpaper is still up and seems to be in perfect condition). Gorgeous place. I also got some good information looking into older houses about insulation that will need to be checked. It explains why my friends here are constantly complaining about their electric bill year round.

Renting a larger place is also an option.
I went to look at rentals after your comment, there is only one place listed and it’s 30 minutes away. Now I understand why my friends have been having a hard time finding a place to rent….

GilesMM

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Re: Buy, Build or Wait
« Reply #6 on: May 12, 2024, 06:54:08 AM »
I have always found much better deals buying used compared to new costs when it comes to homes, so check all the alternatives carefully.  Subtract the cost of the land, of course, when comparing price/sq ft of the structure.


We are selling our old house now and when I subtract the lot value, it is about $100/sq for the house which is high quality 1970s construction.   Current building costs in our area start at $400/sq ft but would not approach the quality of our house (clear cedar interior and exterior, membrane roof, 11x6' windows, solar, etc).  On top of that, older homes tend to occupy the best lots since those were first built so you are getting location, location, location.


If you are handy, I would get a high quality but older neglected fixer-upper in a fabulous location.

FINate

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Re: Buy, Build or Wait
« Reply #7 on: May 12, 2024, 07:26:37 AM »
Renting a larger place is also an option.
I went to look at rentals after your comment, there is only one place listed and it’s 30 minutes away. Now I understand why my friends have been having a hard time finding a place to rent….

Contractors are booked out 1.5-3 years. Add another 6-12 months to actually build. Your current 500 sq ft rental is getting to you, but you're willing to wait 4 years to build?

Also, you're willing to take on a custom build, and even DIY part of it, but an older home is too much work? As long as the overall structure is sound, an older home is way less work than building a new one, and a DIY dream.

We get questions like this all the time on these forums: "Hey, should I do this thing?" when it's pretty clear OP really wants to do said thing. It sounds like you really want to build. That's fine. You don't need to convince internet strangers of your plan, but be brutally honest with yourself because you're the one that has to live with you :)

Don't make such a large decision based on a single snapshot in time (e.g. there's currently one rental 30 minutes away). Spend the next 6-ish months closely watching your market, both for sales and rentals -- remembering of course that you're apparently willing to wait 4 years to build. If a rental comes up that has everything you want at a reasonable price, I would go that direction. This is a low-risk way to solve your immediate problem while giving you more time to explore long term options. But you may get lucky and a good deal on a older home with "good bones" for sale, or even a newer more modest home that's exactly what you want. IMO, custom built only makes sense as a last resort and/or because you want something very specific that doesn't already exist. Just know you'll pay a premium with your time and money.
« Last Edit: May 12, 2024, 07:53:12 AM by FINate »

SunnyDays

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Re: Buy, Build or Wait
« Reply #8 on: May 12, 2024, 02:58:51 PM »
I added insulation to the basement by framing out the walls and putting in Roxul, then drywalling.  Also put the same in the attic.  It made a big difference in the comfort level of the house.  I didn't pay attention to the natural gas usage, but I'm sure it made a difference.  When I got the hydro company to do an eco-audit prior to changing the windows, the guy thought his equipment wasn't working properly because my readings were so low.  He said the house was "amazingly airtight," and actually recommended an air exchange system.  I didn't bother with that because I have pets that are in and out all day, so plenty of fresh air comes in.

Mariko

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Re: Buy, Build or Wait
« Reply #9 on: May 15, 2024, 12:45:51 AM »
I have always found much better deals buying used compared to new costs when it comes to homes, so check all the alternatives carefully.  Subtract the cost of the land, of course, when comparing price/sq ft of the structure.


We are selling our old house now and when I subtract the lot value, it is about $100/sq for the house which is high quality 1970s construction.   Current building costs in our area start at $400/sq ft but would not approach the quality of our house (clear cedar interior and exterior, membrane roof, 11x6' windows, solar, etc).  On top of that, older homes tend to occupy the best lots since those were first built so you are getting location, location, location.


If you are handy, I would get a high quality but older neglected fixer-upper in a fabulous location.

Thanks so much for your input! Yeah I’m leaning towards a fixer-upper at this point just going to have to wait awhile for one in a good location. I found a gorgeous place that I love, but it’s at the upper end of my budget. Since the area is rural the older houses I’ve seen don’t tend to have much of a location benefit (mostly neighborhoods that are super close together) but the house I like has 2.5 acres and trees all the way around it, at the same time as being 3 minutes to town.

Renting a larger place is also an option.
I went to look at rentals after your comment, there is only one place listed and it’s 30 minutes away. Now I understand why my friends have been having a hard time finding a place to rent….

Contractors are booked out 1.5-3 years. Add another 6-12 months to actually build. Your current 500 sq ft rental is getting to you, but you're willing to wait 4 years to build?

Also, you're willing to take on a custom build, and even DIY part of it, but an older home is too much work? As long as the overall structure is sound, an older home is way less work than building a new one, and a DIY dream.

We get questions like this all the time on these forums: "Hey, should I do this thing?" when it's pretty clear OP really wants to do said thing. It sounds like you really want to build. That's fine. You don't need to convince internet strangers of your plan, but be brutally honest with yourself because you're the one that has to live with you :)

Don't make such a large decision based on a single snapshot in time (e.g. there's currently one rental 30 minutes away). Spend the next 6-ish months closely watching your market, both for sales and rentals -- remembering of course that you're apparently willing to wait 4 years to build. If a rental comes up that has everything you want at a reasonable price, I would go that direction. This is a low-risk way to solve your immediate problem while giving you more time to explore long term options. But you may get lucky and a good deal on a older home with "good bones" for sale, or even a newer more modest home that's exactly what you want. IMO, custom built only makes sense as a last resort and/or because you want something very specific that doesn't already exist. Just know you'll pay a premium with your time and money.

Current place is basically free and my whole family lives out here. It’s a very private area and my parents are older so I hate the thought of moving further away, but everything around us has huge lots of land and rarely go up for sale. Even if it did it would be far out of my price range. There’s only one house near here that’s currently for sale and it’s a duplex, but my sibling refuses to consider the positives in splitting an extremely affordable house with a huge wooded lot 3 mins away (1990s built, tile and wood throughout, walk in showers, 3 bedrooms + an office per half of the house, wrap around porch on both levels. It is gorgeous)

My parents wanted us to build a duplex to save money and stay near them (they would help with costs), but per the above issue it turns out my sibling also doesn’t want to negotiate living near me (I thought we had a good relationship but apparently not lol). I thought it might still be slightly cheaper to build two houses near each other with the same floor plan so had still been playing with the idea, but after looking into costs further and reading things on here I’ll most likely just wait for a house I like to come up for sale.

I added insulation to the basement by framing out the walls and putting in Roxul, then drywalling.  Also put the same in the attic.  It made a big difference in the comfort level of the house.  I didn't pay attention to the natural gas usage, but I'm sure it made a difference.  When I got the hydro company to do an eco-audit prior to changing the windows, the guy thought his equipment wasn't working properly because my readings were so low.  He said the house was "amazingly airtight," and actually recommended an air exchange system.  I didn't bother with that because I have pets that are in and out all day, so plenty of fresh air comes in.

That sounds great, thanks for the input! Haha I have cats so putting in a cat door and catio is a must once I get a place. Right now they fight over the one small kitchen window to the point I had to install a shelf for one of them to jump on.

FINate

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Re: Buy, Build or Wait
« Reply #10 on: May 15, 2024, 06:29:51 AM »
Current place is basically free and my whole family lives out here. It’s a very private area and my parents are older so I hate the thought of moving further away, but everything around us has huge lots of land and rarely go up for sale. Even if it did it would be far out of my price range. There’s only one house near here that’s currently for sale and it’s a duplex, but my sibling refuses to consider the positives in splitting an extremely affordable house with a huge wooded lot 3 mins away (1990s built, tile and wood throughout, walk in showers, 3 bedrooms + an office per half of the house, wrap around porch on both levels. It is gorgeous)

Is your current place on your parents' property? The picture I'm getting is you guys in their converted garage apartment, they are empty nesters in the large primary house on a large rural lot. Is that accurate? If so, why not convert some of the underutilized rooms in the primary house to home offices?

Mariko

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Re: Buy, Build or Wait
« Reply #11 on: May 22, 2024, 12:44:34 AM »

Is your current place on your parents' property? The picture I'm getting is you guys in their converted garage apartment, they are empty nesters in the large primary house on a large rural lot. Is that accurate? If so, why not convert some of the underutilized rooms in the primary house to home offices?

Exactly this, the house isn’t super huge though. Also, they never set proper boundaries so now they’re stuck with my siblings stuff everywhere even after they moved out. Said sibling told me they were cleaning out their old room for us to use as an office…it’s been 2 years.

We’re going to wait until next year to see how the market changes and then look for a house a bit further away. Trying to figure this out created a massive amount of family drama so at this point I just want to avoid the whole mess for awhile lol.

Thanks for your advice!

 

Wow, a phone plan for fifteen bucks!