Buy or Build

aaaaaaaahhhhhh

Hi All

I'm just wondering in this day in age, its ot more cost effective to buy or build your dream house?

For example there are houses I'm looking at (4 bed room, kitchen, dining room , sitting room, three bathroom) for roughly €280k.

However I'm seeing land around that is a decent size for roughly €130k.

Given the above as an example, when it all comes down to it, which would be cheaper??

Rackstar

Well you haven't a hope in hell of building your own - 4 bed room, kitchen, dining room , sitting room, three bathroom for 150k

runawaybishop

Rackstar wrote: »

Well you haven't a hope in hell of building your own - 4 bed room, kitchen, dining room , sitting room, three bathroom for 150k

Very much depends on where you are building and how much of the work you take on yourself.

Rackstar

150k - (architect / engineer / council levy / water / waste water / Esb) and building a 4 bedroom house with what's left isn't going to happen

Gumbo

Cheaper to buy a like for house over constructing it at the moment.
Our current Building Regulations, in particular around Part L, is quite expensive to meet.

You have to allow for :

Planning Application cost
Site cost
Council contributions
Council Bond (although refunded after 1 year)
water, gas and electricity connections.
actual building cost (whether contractor or DIY)

Claw Hammer

Outside of the building itself, buying an existing house will mean that floor coverings and curtains will be included. Gardens will have been developed. There is most likely a garage or store. Subtract the value of those items from €150k and you will soon see the budget shrink.

fits

The main issue with buying is that it is very difficult to find well built homes. At least in my area. When you build you can ensure the quality but it is more expensive for sure. You'd get very little with your 150k

December2012

Could be harder to get finance for a build than a buy

The_Conductor

Location is key.
Its cheaper to build in some areas- or to buy in others.
Keep in mind- a lot of the property you can buy was built to other people's tastes and requirements some time ago- so for example- a 4 bed townhouse in Tubbercurry Co. Sligo can be yours for 160k- however, it only has a single bathroom (no en-suites etc). To build a basic 4 bed in the general area (according to a builder from Collooney) will cost over 200k....... Thats for a house in a relative urban area.......

Repeat this exercise and you get the opposite in urban Galway- its cheaper to build than buy. Limerick city- its a toss a coin situation- Cork City- you're in firm build rather than buy territory etc etc

Its all location dependent- there is not a one-size-fits-all answer for buying or building housing in Ireland these days- its a series of small local markets- often with very little in common with one another.

aaaaaaaahhhhhh

The_Conductor wrote: »

Location is key.
Its cheaper to build in some areas- or to buy in others.
Keep in mind- a lot of the property you can buy was built to other people's tastes and requirements some time ago- so for example- a 4 bed townhouse in Tubbercurry Co. Sligo can be yours for 160k- however, it only has a single bathroom (no en-suites etc). To build a basic 4 bed in the general area (according to a builder from Collooney) will cost over 200k....... Thats for a house in a relative urban area.......

Repeat this exercise and you get the opposite in urban Galway- its cheaper to build than buy. Limerick city- its a toss a coin situation- Cork City- you're in firm build rather than buy territory etc etc

Its all location dependent- there is not a one-size-fits-all answer for buying or building housing in Ireland these days- its a series of small local markets- often with very little in common with one another.

Your absolutely right Conductor and that's what I was wondering.

I hear a lot of people using the term "you could have built that for half the cost" so I was wondering was there really any truth to that, although there would be a lot more work involved.

The location would be in the South East where houses are roughly €230k - €280k.

The cost of the land is €130k hence why I have 150k left.

Minera

Im planning on building, architect advised €85 per sq/ft. ie for a 2,800 sq/ft house would roughly be €238,000

Quandary

Minera wrote: »

Im planning on building, architect advised €85 per sq/ft. ie for a 2,800 sq/ft house would roughly be €238,000

Maybe I'm completely in the wrong here but €85 per sqft sounds incredibly cheap! Do you have a lot of family members in various trades that will be helping you out with the build?

westcoast66

Quandary wrote: »

Maybe I'm completely in the wrong here but €85 per sqft sounds incredibly cheap! Do you have a lot of family members in various trades that will be helping you out with the build?

I had a friend that built his own house and thought it would be cheaper as he has family members in the trade. Unless its minor pieces of work that would take less than an hour, you still have to pay them! E.g. a brickie isn't going to take a week off and work on your house for free! You will always be put to the end of the queue. Sometimes its cheaper to hire people who you are not related to as you can shop around and get a better price and insist on high standards.

Minera

Quandary wrote: »

Maybe I'm completely in the wrong here but €85 per sqft sounds incredibly cheap! Do you have a lot of family members in various trades that will be helping you out with the build?

No I don't have anyone, that was a contractor quote, in fairness though I have the site. Plus I'm as far away from Dublin as you can get and no my site isn't too rural. (About 10 min drive from nearest major town)

Hazydays123

The_Conductor wrote: »

Location is key.
Its cheaper to build in some areas- or to buy in others.
Keep in mind- a lot of the property you can buy was built to other people's tastes and requirements some time ago- so for example- a 4 bed townhouse in Tubbercurry Co. Sligo can be yours for 160k- however, it only has a single bathroom (no en-suites etc). To build a basic 4 bed in the general area (according to a builder from Collooney) will cost over 200k....... Thats for a house in a relative urban area.......

Repeat this exercise and you get the opposite in urban Galway- its cheaper to build than buy. Limerick city- its a toss a coin situation- Cork City- you're in firm build rather than buy territory etc etc

Its all location dependent- there is not a one-size-fits-all answer for buying or building housing in Ireland these days- its a series of small local markets- often with very little in common with one another.

Is it worthwhile to build in the Dublin area? There's been a lot of talk in the media about how it's exponentially more expensive to build in Dublin in the context of major housing developments. I could have a site on the North Kildare/Dublin border gifted to me for free.
I have absolutely no background or contacts in construction. I'd be lying if I said I'd be willing to be involved in any substantial way either. Apart from footing the bill at the end.

fits

The biggest factor about building in Dublin is price of land. After that depending on quality you are looking at build costs of 1800-2000 per m2. (I don't know about ft)

mariaalice

Why not buy a small house in a good area and gut it and do it to the standard you want, I have seen a fantastic job done on a small 3 bed 1980s estate bungalow. It was turned in to a 4 bed with a fantastic kitchen diner family room.

westcoast66

westcoast66 wrote: »

I had a friend that built his own house and thought it would be cheaper as he has family members in the trade. Unless its minor pieces of work that would take less than an hour, you still have to pay them! E.g. a brickie isn't going to take a week off and work on your house for free! You will always be put to the end of the queue. Sometimes its cheaper to hire people who you are not related to as you can shop around and get a better price and insist on high standards.

You are forgetting that it's mostly cash in hand though in these scenarios so there is a significant saving for the person building while the block layer, plasterer etc is still getting as much net as they would in a formal job.

murphaph

westcoast66 wrote: »

I had a friend that built his own house and thought it would be cheaper as he has family members in the trade. Unless its minor pieces of work that would take less than an hour, you still have to pay them! E.g. a brickie isn't going to take a week off and work on your house for free! You will always be put to the end of the queue. Sometimes its cheaper to hire people who you are not related to as you can shop around and get a better price and insist on high standards.

Yeah I see this happening with my neighbours. They should be well ahead of us with their build but they're way behind and it's all mates rates. Days can go by without anything happening on site, but they are presumably paying interest on their mortgage and rent in their apartment.

Elliott S

murphaph wrote: »

Yeah I see this happening with my neighbours. They should be well ahead of us with their build but they're way behind and it's all mates rates. Days can go by without anything happening on site, but they are presumably paying interest on their mortgage and rent in their apartment.

Exactly, it's short-sighted and you might not be getting the best by looking for mate's rates. Something might need to be re-done down the line and end up costing you more money. If you are paying the going rate, you can look for the best. And, IMO, people who lean on people they know to give "mate's rates" pay less than what the trademan would have made net of tax on a tax-compliant job. And if they need help to do the job, their employee still needs to be paid their full rate. The odd mate's rate job here and there is grand but anyone I personally know who fully-relied on this to do up or build their house is as tight as a fish's arse.

Elliott S

Elliott S wrote: »

Exactly, it's short-sighted and you might not be getting the best by looking for mate's rates. Something might need to be re-done down the line and end up costing you more money. If you are paying the going rate, you can look for the best. And, IMO, people who lean on people they know to give "mate's rates" pay less than what the trademan would have made net of tax on a tax-compliant job. And if they need help to do the job, their employee still needs to be paid their full rate. The odd mate's rate job here and there is grand but anyone I personally know who fully-relied on this to do up or build their house is as tight as a fish's arse.

Some of the best build and designed houses I have seen were built by direct labour and project managed by the person who was having it built and the work done by friends and family members at lower prices than would be possible in the open market. Just because you use friends doesn't mean you are not getting excellent tradesmen. As for having to redo stuff, I'd trust a friend or family member to do things right far more than a random person hired.

As for paying rent and a mortgage interest, most people who build tend to do so on their on their own land so will be living at home while its going on and normally, from what I've seen the paying the mortgage doesn't start until the house is nearly complete or actually complete (after the final draw down).

AlmightyCushion

Achilles Ashy Species wrote: »

As for paying rent and a mortgage interest, most people who build tend to do so on their on their own land so will be living at home while its going on and normally, from what I've seen the paying the mortgage doesn't start until the house is nearly complete or actually complete (after the final draw down).

Surely mortgage interest is being calculated from when you draw down any money. E.g. if you take €50,000 today to start the house but don't draw down the final amount until this time next year, the bank will still add interest for the €50,000 for this year.

Water John

But what is the interest on 50K, 2K.
In many cases its horses for courses. But any budget would want to be at €100/sq ft. If you beat that, its a bonus.

Elliott S

Achilles Ashy Species wrote: »

Some of the best build and designed houses I have seen were built by direct labour and project managed by the person who was having it built and the work done by friends and family members at lower prices than would be possible in the open market. Just because you use friends doesn't mean you are not getting excellent tradesmen. As for having to redo stuff, I'd trust a friend or family member to do things right far more than a random person hired.

Mate's rates tends to bring the cost down to less than what the tradesman would have got going through the official, tax-paying channels. People feel under pressure to give their friends a discount. I'd never feel right asking a friend to do a big job for less profit than he should be getting, especially if it's high quality work, but some people have no qualms about kitting their house out in this manner. As said up-thread, these jobs tend to be put to the back of the queue and there's a reason for that - they don't pay as well for the tradesman as above board jobs do. If they left the same profit as an after-tax and expenses above board job, this wouldn't happen.

fits

AlmightyCushion wrote: »

Surely mortgage interest is being calculated from when you draw down any money. E.g. if you take €50,000 today to start the house but don't draw down the final amount until this time next year, the bank will still add interest for the €50,000 for this year.

Yes, you pay interest from the first drawdown, but only on the amount drawn down, and so on with subsequent drawdowns, so you are not paying the full mortgage payment until the project is completed.

fits

I have a family member who is an architect, and I am paying full fees for her work. But I know she will work extra hard to get the right design solution for us.

little_mick

little_mick wrote: »

its not like you can get planning in a city to build

in most rural areas , buying is far cheaper but sure we love our dream home built up some boreen three miles from a small village in the midlands

A lot of people building are building on their own/their families land though so don't have the site costs. This brings down the overall cost quite a bit. Personally I'll buy a house for the next while but for the house I will settle down in I will want to self build so I can have the house I want laid out the way I want along with things like large double garage etc. Even if it costs the same or a bit more than buying an existing house in the area I'd rather it build to my specs.