This question we asked ourselves frequently given how much land is used up. This then tumbled into more questions like,
If the land has a house on it, what did the previous owners do with that land before?
Did they apply lots of chemicals and pesticides to the lawn, seeping into the well water?
Did they eliminate the natural landscape and install a typical 'yard'?
Would the house be a teardown?
Did they cut down priceless, healthy trees?
How old is the house?
Even if it's a teardown, how robust is the basement and how well waterproofed?
Did they use a quality builder?
On the other hand, if it’s a vacant parcel, how far do we have to run the utilities to the build site and how much would it be?
What about the cost of other improvements like well and septic?
Is there a reason this land isn't built on?
Is there environmental concerns or is the property wet?
What about the cost to clear the build site?
One builder told me, for the lot we were looking at, the price to take out the trees for the build site vs the cost to teardown an existing house would be like a wash. So then we're just looking at the cost of running utilities and installing well/septic.
There were two realizations we had to make our decision.
1. We want the most custom, site responsive home possible. Even if an existing home is a teardown, the footprint or existing utility connections may provide constraints on our custom design.
2. The second thing was liquid cash. With our financial strategy, we need as much cash on hand as possible for our construction loan. So when we would have purchased the land (with or without a house on it), we would be deducting that monthly payment from our savings until we are ready to build. This time could maybe take a year to get the design right and everything ready to go, permits issued, etc. So instead of paying for an affordable vacant lot loan and deducting a small portion from our down payment savings, if the land had a house on it, we would be paying a full MORTGAGE plus insurance, etc. That was the deal breaker right there for us. Unless you have a very flat parcel and the house design done prior to buying the existing home, or you just have money to blow, then you'll probably be in our situation.
So be honest with yourself -
How custom do you want your home? Would it cause the other home to be a teardown? Or is it a more manageable renovation?
How fast can you start?
If there’s a house there, how much is the house already? Lay out the expenses month by month; would you still hit your savings goal?
I am crossing my fingers a property becomes available suiting our needs, but going to keep nice properties with 'lesser value' homes in my pocket just in case.
*Disclaimer: The content on this website is based on our own opinions and personal experiences; it shall not be construed as legal, construction, safety, engineering, financial, insurance, or tax advice, and may be outdated or inaccurate. It is your responsibility to verify all information. Any links shared may provide the website owner an affiliate commission, at no additional cost to you.
Comments