Buying VS Building a House

[park5115]

I got married last month and my already cramped 1bed/1bathroom in Houston is suffocating me and my wife. But we're there until Sept.

We are looking to get out of the Houston area and I have several job leads in the surrounding San Antonio area that I feel pretty dang good about. So, I've been starting to think a lot about seriously getting a place of my own because I dang sure don't want to be in another apartment and feel like renting is a waste of money.

So my question to some of you older guys who are homeowners, what are the pros and cons of building a new home or buying an existing one?

What would a fairly modest house around 1600-2000sq ft cost to build?

My father in law has also told us to when buying our first house that we should look into cheaper options, since we have a small family now- just me, wife, and dog. No kids.... yet.

I have also heard that you really don't want to buy a house that cost more than 3x times our combined income.

Any truth or further insight to those things?

[Z7_Matt]

Fellow renter here. Will be watching this one.

[HeyMikey]

With the economy down, lots of houses on the market, and interest rates as low as they are now, you'll get more house for your money, buying an existing house, as opposed to building one. How much debt you want to bite off, is strictly up to you, but if you're gonna start a family in 2-5 years, plan for it now, or else you'll be making another move then. Just my opinion: I've bought 3 and built 1, but i don't plan on building again.

[Dale Moser]

A house that size.......I would look until you find something you like and buy it. Years down the road when you can afford it, build the house "Y'ALL WANT". We built one, it's super nice and I'm sure we'll do ok on it when we sell...but it's not what I wanted....it's what I could afford. If I hadn't put us in a time crunch, and it hadn't been 2008/2009....I could have looked longer and bought a similar sized house with other stuff already in place....shop, pool, etc.

[aggie2000tx]

For a first house I would definitely buy an existing house. It is a buyers market out there right now and deals are be be had. Buy a house that you can afford and not have to worry each month how you are going to come up with the mortgage payment. If kids are in the future I would look at 3 bedroom 2 bath houses as a min. I would rather have a little bit big house in the beginning verses having to move after a couple of kids hit the ground.

[dc1986]

Look into repos/foreclosures.There are some great deals out there and interest rates are low.

[elhefe]

I have bought one house and built 2 others. I would suggest for your first home that you should buy an existing one first. Interest rates are crazy low, market has tons of homes on it, and it is a good "stair step" process to getting the home you really want years down the road.

[muzzyslinger]

Look into repos/foreclosures.There are some great deals out there and interest rates are low.

x2

[panhandlehunter]

Bought a cheaper house 3 years ago, remodeled it and got it paid off. That house has a contract on it, fixing to sell, and we got our 10 acres paid off this past year, so we will be building our new house in the next few months. It made more sense for us now to build vs. buying an existing home, but 3 years ago we didn't haven't the money to build. With some luck and hard work, we're in a situation now where we can. I'd recommend buying an existing home for now and some property and get it paid off quick, and a little ways down the road you can build you a house that you will be in forever. And we'll be paying somewhere in the neighborhood of $70 a sq. ft. for our new house, but we're not going through a big name builder and doing some work ourselves.

[curtintex]

I built our house and I'm building one for my BIL and SIL right now. When I built mine, there was no way I could buy for the price that i built. However, my BIL and SIL are gonna build for a sq. ft. price that isn't much lower than houses are selling for in our area. For your first house, I'd definitely recommend buying existing. You can practically steal some deals right now, and probably spend little more than the cost to build...sometimes less.

I'd recommend planning for children now. Buy a house that will accommodate your growing family so that you're not in a bind to sell later when you need a bigger place. As far as a price goes, I like the 25% rule...principle, interest, taxes and insurance should not be more than 25% of your monthly income.

Good luck

[jooger17]

Strange... I was just thinking to myself this morning (very dangerous situation in its self) on the way to the airport. My theory is this, the economy is bad so forclosures and existing homes should be readily avalible with multiple "if you buy now we will do this for you" packages. At the same time, building materials are THROUGH THE ROOF as well as hom apliances and remodeling supplies. See Ol Thumper's thread in the DIY section. Unless you really found a bargin on a piece of realestate, I think a guy would be a lot better to buy a nice home for a discounted rate now, sell 10 years down the road from now for 25% or so more than what you paid for it, and THEN build your dream home when the costs have evend themselves out. That however is the logic of an uneducated roughneck that has been up working for about 28 strait hours and hammering java on the way to the airport to get home

[brunner]

Park, if you consider Kyle/San Marcos area we will be selling ours around the time your are ready to buy.

[Nova]

The old rule of thumb is to buy the cheapest (might be smallest, might need a little work) house in the nicest neighborhood that you can afford. Right now intrest rates are dirt cheap so it is a good time to get a lot of house for a little money. Don't over extend your self but go ahead and get a nice house in a nice area while rates are down.