One of the first decisions you have to make when buying a home is if you should buy new construction or an existing home with fixer-upper potential. Unfortunately, there is no right or wrong answer - it all depends on your individual situation and personal preferences. To help you in your decision-making process, we've outlined some key pros and cons to each option.
According to a recent report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development, the cost of a new home is roughly 30% more than the cost of a pre-existing home. While that may seem like a lot, you also need to consider the benefits that come with a new home. With an old home, you might pay less upfront, but you could be seeing that money go out the door through repairs and energy costs since old homes are often less energy-efficient.
Buying a new home fitted with a brand-new hot water heater, HVAC and roof offers peace of mind that no major issues should pop up within the next decade. Should you decide to pursue an old home, keep in mind that some of these larger home systems and appliances may need repair or replacement within a few days, months or years of purchase. It is very important to conduct thorough home inspections prior to buying an older home so that you are aware of the potential out-of-pocket costs in the near future. If you don't have the savings in line to fund such repairs, it might be best to consider a new home that wouldn't require any immediate care.
Buying a home is a huge investment and, as with all investments, there is a degree of gambling that goes into your decision making. With an old home, you have history and visual trends to see the ups and downs of the property value. Now, that's not to say it's a perfect predictor of what the future holds, but unlike with new homes, you have a good basis of approximate appreciation and value. New homes don't have this history, so some might consider this a bigger risk and shy away from the unknown changes in market value over the course of your ownership.
When it comes to the design of a home, you're most likely going to see opposite sides of the spectrum in old versus new homes. For those that are looking for intricate details, historic tradition, unique features and the possibility of secret hideaways, you'll probably want to browse through older homes that were built in a time where your desired feature was popular. If you want clean, crisp lines, open floor plans and minimalistic design, then you'll love the majority of new construction homes.
How do you get the best of both worlds? Buy an old home with a sound foundation and good bones and then work on renovating it's interior to get the old charm with a new, updated style. Who says you can't have it all?