Homeowners are always looking for cost-effective savings. Buying a home is incredibly expensive, regardless of how you buy. However, it doesn’t have to be more expensive than it’s worth. This leads to the conversation regarding newer versus older homes. Which offers the better value? There are a number of ways to answer this question. Some may apply, while others may not. Regardless, we’ll cover both schools of thought here.
Old or New Homes… Which Has the Best Value for Homeowners?
New Homes Are Expensive
Some people think that building a new house is the cheapest option. This is because you simply have to purchase raw materials and labor, and you can avoid the markups. However, this requires new homeowners to have a place to live in the meantime. You may be covering another mortgage in addition to the costs of the new home. Or, you may end up with expensive rent in addition to your current costs.
If you want to buy a newly-built home where you didn’t participate in construction, you’re still looking at a large cost. You’ll be saved the time and energy and holding the costs of building the home yourself. However, you’ll pay the additional money that the seller is charging so that they can make a profit.
One benefit is that newer homes often have fewer problems, meaning immediate repairs and renovations are unlikely. However, this is not always the case, as you can’t verify every detail of construction methods and quality before you buy. That’s why latent defects insurance is required in many parts of the world.
But Are Older Homes Less Expensive?
Though there are exceptions, an older home may have been increasing in value for a long time. This is especially true if it’s in a neighborhood that is desirable, mature, and safe. This can greatly inflate the price of a home beyond what the sum of its parts would cost. Realtors know this is because it is a time capsule of an earlier era. Or, may have interesting and desirable traits that you can’t find just anywhere.
In other cases, older homes aren’t expensive, but these are likely to have many problems. It’s rare that an older home has been meticulously maintained and modernized through the years. This makes for homeowners, especially when it’s uncertain what lies behind the walls (think: old pipes, or knob and tube wiring). Plus, additional systems may be on the verge of breaking.
In this case, the old home can cost a fortune just to maintain a liveable state. This is very challenging for anyone. Sometimes, however, it proves too much for the first-time homeowner who finds they don’t have enough money in the budget to cover necessary costs.
No matter which route you go to buy, homeowners know it’s going to be expensive. That being said, if you plan well, you’ll be able to more than afford what you choose. This guide is not meant to discourage you. Rather, it’s meant to clue you into some of the often-overlooked expenses of owning two very different kinds of homes.