Should You Build or Rehab?
What is the best option for you and your property: to build a brand new home or rehab an existing home? Building on a vacant lot has its advantages but so can flipping a current home; and both have their downsides. Before you decide which is right for you, take the time to weigh your options along with the pros and cons.
What Will It Cost?
Before any big venture it’s important to look at the cost of both options. Construction costs change all the time with the ever-changing economy and the housing market. Keep in mind that if you decide to build you will spend money on land acquisition, impact fees, utilities, inspections, and many other costs associated with building from the ground up. In recent years the cost of building a home has actually proven to cost more than the profit from said home. If you decide to rehab an existing home there are a list of costs – other than the acquisition of the home – to consider.
How Much Time?
There is a large time commitment associated with building a home, which means that a number of investors tend to step back from the idea. It is possible to remodel a home in a month but it usually take ten-times that to build from the ground up – and that is s not taking into account the time it takes to sell the property. While building a home can be a profitable investment, it’s not for everyone. It’s important to know the profit margins and the timelines and how they will fit with your overall goals. Make sure your strengths and your resources can all fit into the same parameters. Is this something you can really do? If you happen to just enjoy construction and design then building may be for you. Just remember that sometimes flipping an already built home can bring you higher profit. Regardless, it is important to know the difference between the two.
Can I mix the two options?
Don’t overlook the option that will give you the best of both. Explore look the potential of Real Estate Owned homes that may be available at a lower cost to you. They will save you time and some of the headache of building brand new.
Before making any final decision, make sure you look for the option that you can afford time and money wise. Know that either option you choose will involve a commitment of both and will include very different roles for you. Ultimately, it is up to you to know which option will give you what you want.