O/T:Building a house

Anonymous-0 · Apr 20, 2012

How did you guys that built or bought a new house decide when the time was right? We want to build a new house. We are able to do 95% of the work ourselves, (we have built for other people in "slow" winters) so labor dollars aren't in the equation. Not looking for anything big and fancy. It seem there is always another piece of farm equipment that need to be replaced, so there will probably never be any money put away in savings. Our retirement plan is in equity, like most farmers/ranchers. Do we just "bite the bullet" and go for it and hope everything will be fine? We live in a mobile home that is 25 years old and is getting ready to need work done on it. Don't really want to put lots of money into it. Also don't want to wait until I'm to old to enjoy a new house. Buying something in town isn't an option, as we live 20 miles fom the nearest town and 50 miles from the nearest town of any size. How does one figure out when the time is right?

Gun guru · Apr 20, 2012

It comes down to how much money do you have?
Can you pay cash for the material, or at least most of it? That is how you know. When I built my home in 1999 I was able to get the foundation, framing, roof, windows and almost all the mechanical in with my own money. Then I had to get a loan to buy all the finish stuff, like drywall, all plumbing fixtures, cabinets, paint, all electrical. One very important thing to know is that it comes down to dollars per sq. foot. If you do all the finish work yourself it will be about $60 per sq. foot. Completely done by a builder will be about $100 per sq. foot.
It sounds like you dont have kids living with you, you can build a smaller home then.

Ellis Kinney · Apr 20, 2012

The time was right for us, my wife and myself as she is a few months from retirement. I have owned a farm for 40 years but lived in the city. I retired from teaching 10 years ago and worked construction since retirement. Our house in the city is paid for so I borrowed against it to build on the farm. It is 90% completed as we speak. I am essentially trading one house for another. We are 66 and 64 and hope to have 20 or more years on the farm. Good luck with whatever you decide to do. Ellis

ss55 · Apr 20, 2012

It depends on your goals and your families needs.

Interest rates for home loans are near all-time lows. Material prices have stabilized due to low demand. Builders and contractors are looking for work. If you have the funds/cash-flow available now the builder's market won't get much better than it is now.

It helps to be able to pay-off any home loans before you retire and your income drops.

If you will be your own contractor do your homework to the smallest details and consult with others who have build recently as sanity checks. Check into septic system requirements, loan requirements (talk to several banks) and get estimates of future property tax assesments.

A new home will be larger than your mobile, but it may cost less to heat and cool. Your families comfort and convienience will be infinetly better.

If you lived in a 25 year-old mobile home you already know how to sacrafice.

Look into your other alternatives:
Repair the existing mobile home;
Trade-up to a newer mobile home;
Move existing home to your site (plan to replace all sheet-rock, all shingles and maybe the siding as they will all be loose or cracked);
Build a new home;
Move to an existing nearby home and commute.

Good luck.

dpendzic · Apr 20, 2012

I think the most important fact is need.If your current home is too small, or needs many costly repairs, then if you can afford a construction/mortgage loan to cover the costs you can"t cover it would be feasible to build new. When I was first married we rented for 2 years, bought land, and I built our house on it the second year and have lived there for 40 years. I obtained a construction/mortgage to cove costs i couldnt swing.
saved enough to eventually build two vacation homes, but sold the first as it was too much maintaining 3 homes!

northvale · Apr 20, 2012

my vote is the time is very right, but you will worry.

Russ from MN · Apr 20, 2012

Lumber and interest rates are both very low, and concrete, shingles, and copper wire are high, but as the economy improves they will probably get higher. Build it practical and insulate it well, you won't regret it.

Stephen Newell · Apr 20, 2012

If the game plan it to pay for the construction as you go I would at least save enough money to frame the walls and put a roof on it. The framing for the walls can be covered with polyethylene plastic until you can get siding and windows in. The important thing is to keep the weather from ruining what you are building while it is under construction. What would be better is if you could at least get a bank loan to go ahead and get the shell finished. Then you could take your time with the finish out.

Geo-TH,In · Apr 20, 2012

I would say the time is right when you can pay cash for the home you want to build.

You may find banks don't want to loan money on new construction, especially after 2008. Credit requirements have changed too. Getting a construction loan may be very difficult unless you are an established contractor.

LOL

George

John B. · Apr 20, 2012

Well the way I see it. If you've built for others I'm sure you have good credit established to buy construction materials. You said living in town is not an option. Is it an option to stay in your 25 year old trailer?? Interest rates are as low as they are going to get. If you don't do it now you'll be kicking yourself in the near future. Plan the layout, know what you want and go for it. I told my electricians how I wanted my house wired. I had them split wire the receptacles in the living room and bedrooms. I flip a switch at the door and my bed lamp comes on and when I crawl in bed I turn the lamp off which is in arm's reach. When I get up I turn the lamp on and when I walk out the door I flip the switch off. Every entrance or exit of every room should have a lite switch for that room. I have many 4-way switches in our house. I told the electrican I wanted 2 outlets on every wall in my garage. He asked why, everyone uses extension cords??? He just answered his own question...LOL! My advice just build and you won't regret it...

LJD · Apr 20, 2012

I've built three myself and NEVER again. I did it all - plumbing, heating, masonly, all construction, excavation, septic, electric, design, etc. The right time was maybe 20 years ago? Now - if you build new and building codes are used and enforced in your area - the requirements for a residential structure are absolutely ridiculous.
You have to jump through endless hoops and then if you get done - you're rewarded with high taxes. I'd fix up an old house that has many things "grandfathered" in and will never be taxed like new house.

Dieselbreath · Apr 20, 2012

Sounds like the time is right for you. I was owner/builder on my current place 18 yrs ago and am glad I did it. Only thing I would change is I wouldn"t make it so big. The kids quickly flew the nest and we (just the two of us) live in a 4200 sq foot home.
I say go for it.

DeanOlson · Apr 20, 2012

Do your research on what the your Central Appraisal District wants for property taxes on a new house. Getting them built is relatively cheap and easy compared to paying the CAD for the rest of your life.

I have rental properties. 2 mobile homes, 1998 & 1999. Taxes are about 250/yr. each. I have 2 stick built homes built in the 60's. Taxes on them are about $1000/ year each. Homes are all about the same sq. footage and in the same area.

I started out in a mobile home and may go back to one as a direct result of taxes.

Fergienewbee · Apr 20, 2012

We built, and are still finishing, our house in 2001. Like others have said, our house is too big--2000 sf up and down--for the two of us but I wouldn't want it any smaller. Be sure to factor in resale; most buyers want at least a bath and a half and three bedrooms. We built walls of 2 x 6s at 24" o.c. to allow for more insulation. We have 12" in the ceiling. The house stays warm in winter and cool in summer. We deposited 25,000 with the lumber company and ordered material againt it. Paid cash for all of our windows and we have quite a few large size. Construction loans may be harder to get now. Good luck. You won't regret it.

Larry

WJD · Apr 20, 2012

To save on lumber check with local sawmills that can dry lumber and buy a planer. My planer paid for itself the first couple of days I used it. Of course it can be dirty and sometimes heavy work. Best with two people.

Just a suggestion.

1970-1655 · Apr 20, 2012

We built our house 25 years ago, after living in a mobile home for 14 years. When we were ready, interest rates would go up. Finally they got to a stable rate for a while so we went to the bank for a construction loan. We had to have a contractor's license which we did not have. I hired a friend that was a garage builder for his contractor's number. We hired out the septic because that needed a different type license. One thing we would do different is make it a one story with a basement. We have 2550 sq. ft. with one bedroom and one bath on each floor. After having my right knee rebuilt twice, I wish we only built without the stairs. With tornado possible about anywhere, I would not do without a basement.

Ralph Bauer · Apr 20, 2012

start building when you are able to get the home weather tight (walls, windows, roof,. That lets you tackle the inside as you have money and to work on during the winter months.

MSD · Apr 20, 2012

A good downpayment is a must with a bank loan. 20% is common. Interest rates are the lowest they have ever been. Borrow as much as the bank will give you. You are locked in for 30 years at that historical low. 2-3-5 years from now interest rates could be back up to a more normal level. I paid as high as 13% to do a house one time and lived in one where I was paying 9%. That was normal back in the 90's. The cash you didn't put into it can be put towards something else that might come along when rates are high again. It's opposite of what all the others are telling you but think about it. When that piece of land comes up and rates are at 7-8-9% you might not be able to afford it but you will have your cash that you didn't put in the house.

Eldon (WA) · Apr 20, 2012

(quoted from post at 14:19:58 04/20/12) How did you guys that built or bought a new house decide when the time was right? We want to build a new house. We are able to do 95% of the work ourselves, (we have built for other people in "slow" winters) so labor dollars aren't in the equation. Not looking for anything big and fancy. It seem there is always another piece of farm equipment that need to be replaced, so there will probably never be any money put away in savings. Our retirement plan is in equity, like most farmers/ranchers. Do we just "bite the bullet" and go for it and hope everything will be fine? We live in a mobile home that is 25 years old and is getting ready to need work done on it. Don't really want to put lots of money into it. Also don't want to wait until I'm to old to enjoy a new house. Buying something in town isn't an option, as we live 20 miles fom the nearest town and 50 miles from the nearest town of any size. How does one figure out when the time is right?

I started on mine in '04, took 4 years to finish without the bank involved. Lived in the lower level for 2 years as I finished off the upper level....28 x 60 x 2....assessed at $360K, right around $125K in materials. Glad it is done!

elmersooner · Apr 20, 2012

a popular option in the country here--no problem with code inspectors--is to build a metal building. place a small apartment inside to start with and build as time and money allows. My wifes uncle has done it twice. last one ended up being over 3500 square feet. 3 years to complete. he finished it out like a log cabin, sealed it really well and unless you knew how he started it, you would never know it was a metal building to start.

Rick Kr · Apr 21, 2012

Around mid-Michigan you would be crazy to build. You can find homes for pennies on the dollar. You could never build one of these homes for what you could buy it outright for. Things may be completely different in your area. Michigan the housing market is in the dumpster. All housing is affected, friend just picked up a house that cost 550K to build, for 240K, 10 acres, buildings etc. He might be shocked by the taxes I imagine.Another bought a 3BR/2 bath, 1400 ft^2 ranch for 29K. Completely redone on acre.

If your going to do it yourself, start when you can get it sealed up before the cold hits. Your comment about another piece of equipment to fix. You"ll make time, the next years you"ll just have less. I did a major remodel, almost a teardown on my farm house, then 10 years later built a new house. Plan on building my retirement home in 15-20 years. Lots of work, but you can do it if you want.

Good luck.

Rick Kr · Apr 21, 2012

C-man. Someone else said this on YTMAG the last house building thread... "If your marriage survives building your own home, you have a good marriage"...

If your married make sure you are both committed to the build.

Rick

O/T:Building a house

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