Country Living: Should You Buy or Build Your Dream Home?

If you’re considering a move to the country, one of the most important decisions you’ll make is whether to buy property with an existing home on it or find the perfect piece of paradise to custom build your dream house. Naturally, both approaches have their pros and cons, so here are some things to consider. 

Buying land with an existing home 

Buying can seem less expensive than building, but if you’ve fallen in love with a picturesque old farmhouse, the costs to bring it up to today’s standards can quickly add up. While older homes can radiate character and charm, they also have the inevitable wear and tear that comes with age. That means you’ll need to pay particular attention to condition of the roof, foundation, siding, and heating and cooling system, since they may require maintenance or even replacement. 

For example, the average HVAC system lasts between 15 to 20 years and can cost $10,000 or more to replace, according to Realtor.com. And the average lifespan of a shingled roof is about 20 years, so if you have an older home with a leaky or aging roof, you could end up looking at a bill of at least $5,000. Plumbing and septic systems don’t need to be replaced or repaired often, but when they do, it’s usually not something you can wait to address. 

Other factors to consider include older windows and appliances. With the median age of U.S. homes at 36 years, it’s not unusual for homebuyers to replace them to increase energy efficiency, says Realtor.com. You should rely on your real estate agent, appraiser and home inspector to spot issues that will require your attention – and money – if you’re thinking about buying an older home. The good news is that tax incentives can help contain these costs, especially if your home is environmentally friendly. Common tax breaks include savings for installing solar heating, insulation, HVAC systems, lighting and water heaters. Be sure to talk with your lender about these options. Tax credits vary depending on your state and region. 

Everyone has different tastes when it comes to a home’s finishing touches, and unless you’re lucky enough to find one that has been upgraded with exactly the finishes you prefer, you may find yourself wanting to replace the flooring, countertops, tile and lighting, even if what’s there is still functional. Or, you may want to expand a bathroom or create a large, walk-in closet in the master bedroom. Home improvement shows often make it look easy, but anyone who’s gone through a planned (or unplanned) renovation knows the process is never as quick, easy or budget-friendly as you’d like. 

Because older homes often don’t have the open floorplans and amenities today’s buyers are seeking, it sometimes just makes sense to find the right acreage and start from scratch with a builder who’s experienced in country homebuilding to get exactly what you want. 

Buying land and building your home 

If you’ve decided that building your country home is the way to go, the first thing you need to do is find the right property. You can begin your research by visiting the county assessor’s office, either in person or online, to get a general idea of the value of acreage you have your eye on. The next step is to check the parcel’s zoning, which determines how the land can be used. You’ll probably also need to have a professional conduct a perc test, which is a soil evaluation that determines if the land is suitable for installing a septic system. 

You can’t overestimate how important it is to find the right professionals to work on your behalf when you’re considering a new build in the country. Understanding the ins and outs of rural property transactions is a specialized skill. Not all lenders finance rural properties, and not all builders know how to build in rural communities. Doing your research and talking to others in the area who have gone through the experience themselves can save you a lot of time, money and frustration. 

According to HomeAdvisor, it typically costs from $150,000 to $450,000 to build a home, depending on the region, square footage, materials and other factors. Something to consider is that it’s important not to buy a less-expensive lot and put an expensive home on it. To maintain value, plan to build a house at the size and price range that’s comparable to others in the area on similar plots of land. A good rule of thumb is to estimate the lot at about 20% to 30% of the finished value of the home, according to HomeAdvisor. So, if you’re looking at building a $300,000 home, the lot should cost about $90,000. 

Dave and Penny Grayson recently moved into their new 2,500-square-foot modern farmhouse on acreage in central South Carolina. They discovered that finding the trifecta of experience– real estate agent, mortgage lender and appraiser – is essential. “Do your research and find professionals who have experience financing and building in rural areas to avoid the pitfalls of hiring people who don’t really know the process and end up costing you more money,” Dave advised. “For example, our appraiser wasn’t familiar with appraising homes on acreage and could have caused our entire purchase to fall through. 

“Once we had the right lender on our team, after switching from one that wasn’t familiar with land, things went really smoothly,” he added. “When you have a lender who knows what they’re doing, the process is really painless.” 

Dave and Penny’s builder had an established track record of building rural homes, so there were no unpleasant surprises as construction got underway. “A pleasant surprise was to learn that most builders will come out to the property before you make an offer to let you know if it’s a good piece of land to build on or if there are additional costs to consider, such as land-clearing,” Dave said. 

Land-clearing can be an expensive undertaking. HomeAdvisor.com finds that most new rural homeowners spend between $1,250 and $4,500 to clear and grade land to prepare for home construction. This handy cost estimator can help you determine a ballpark figure for this expense, depending the parcel’s terrain and location. 

Once they obtained the necessary inspections and permits, the Graysons’ lender walked them through the financing process for a construction-to-permanent loan, which enabled them to combine their construction financing and permanent mortgage payments into one loan. This option saved time and money with just one closing and one set of closing costs, and the couple was able to lock in their interest rate before construction began. 

There’s really no right answer about whether to buy or build a home in the country. It all depends on your budget and what makes the most sense for you. You may end up deciding to build to get exactly what you want, or you may decide that an existing home that you can fix up over time is the way to go. Regardless, be sure to assemble and rely on a team of professionals who are knowledgeable about rural home and land transactions and construction to ensure everything goes as smoothly as possible.