Buying land for your next home
If you’re in the market to buy a house, you may have noticed the skyrocketing high prices and the enormous barrier to entry. Buying a house in a major U.S. city has become unaffordable for most people, especially if it’s a first purchase. What’s the alternative to playing the real estate market game and what about buying land to build from instead?
With the Federal Reserve committed to keeping interest rates low, and possibly cutting in a few weeks, it’s plausible that house prices will continue to stay high. Low rates stimulate demand as mortgage products may become even cheaper, 3.5% on a 30 year, fixed, currently, according to bankrate.com.
Buying land and constructing your own home may offer an affordable alternative to get in the housing market. However, like all other massive projects, expect it to take time (4-6 months), be hugely complex, and you’ll need to be financially prepared for all unforceen expenses. If the project is successful, you’ll enjoy living in the house of your dreams and hopefully save money on the deal.
Locating land is as easy to do on Redfin or Zillow, however, you’ll need to confirm its zoning and construction limitations. The path that you take on the new construction should be determined from the very beginning and you’ll want to have your team already put together. You’ll need to analyze the requirements for developing your land, including clearing trees and leveling land, not to mention the installation of pipes, electricity, and roads. Next is to decide on the floor plan and overall construction strategy, new construction or prefab, and your team should include the necessary architects, civil engineers, land surveyors, construction workers, among others. You may also decide to hire a design-build company, using prefab or modular housing, to streamline the process and make the project possibly cheaper.
If you’re eco-focused, you may get into the environmentally conscious housing options that are popping up more and more. This may include using a recycled shipping container, pieced together for your new house, however, you’ll need to add insulation, piping, and electricity which will take some ingenuity.
If you’re tech-focused, you may choose to 3D-print your house. The startup, Icon Build, based in Austin, Texas, will bring their printer to your site and print your house in less than 48 hours. This is without the same need for human contractors and other assistance normally required in new construction. Not on the market yet, they will likely be the first of many such tools available in the future. This might even drive the cost of housing down if the cost of labor is removed from the process.
At Eureka Wealth Management, I help my clients visualize and budget for their dream home and help research available financing options. I also provide investment & insurance advice and tax & estate strategies. Call for a free, initial consultation at (760) 537-0791 or online at eurekawealthmanagement.com.
Sources:
Building a Container Home: https://youtu.be/sauEsj8YW9M
6 Great Small Prefab Homes: https://youtu.be/F5SL-X2PbFA