Is it better to do upgrades (options) through the builder when purchasing a new home or go with the basic options and do the upgrades yourself later (ie. through Lowe's, Home depot)? Which is cheaper, what do you recommend?
2006-09-15 05:27:19 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
I think it's definitely cheaper to do it yourself. If you have the time and the skills you'll save a lot of money. In fact, it's often cheaper to even have a contractor do the work.
The other important point to consider, which is often not planned for is property taxes. If you have $25,000 in upgrades included in the sale of your new house that's 25,000 more dollars that's taxable each year for property taxes.
2006-09-15 05:35:47 · answer #1 · answered by RV 2 · 2⤊ 0⤋
RV has an excellent point about the property taxes.
Also, consider the fact that anything you pay the builder for will be in your mortgage. If your builder is like any of the builders that I have been involved with the work may or may not end up being good quality/value for the money.
Consider floorcoverings, for example. The bank will not close if you do not have a floor down. If you know that you are going to want upgraded tile in your home (many builders only offer builder grade material through agreement with their subcontractors & suppliers), have base grade carpet loose laid in the areas where you anticipate installing the tile. Loose lay is easy to remove, and you can install the tile at your convenience.
2006-09-15 07:15:30 · answer #2 · answered by Sharingan 6 · 2⤊ 0⤋
Even though a builder will typically charge more for upgrades than you would have to pay to have them done later - and certainly more than if you do them yourself - you should consider how you will pay for these improvements. If you have your builder do the improvements, you will be able to finance these upgrades in your relatively low rate mortgage loan. If you do them later, they will be CASH expenses for you. Perhaps you will be able to use credit if you do this work at a later date, but the interest rate will be MUCH higher than your mortgage loan rate and this interest cost will not be income tax deductible.
Using OPM (other people's money) is a time-honored, money-saving principle in investment real estate, but it is also a good practice to use for buying yourself a home.
More importantly - for most of us, CASH is precious and in lamentably short supply. Conserve it when you can, even if you have to pay a little more.
2006-09-15 10:12:40 · answer #3 · answered by PLS 2 · 1⤊ 0⤋
Go with the basic options if you like them and upgrade later. The reason is this: your property taxes are based on the value of the property. If you add all the high options now, you will pay higher property taxes for the life of the home.
2006-09-15 07:07:51 · answer #4 · answered by Steve R 6 · 2⤊ 0⤋
When we built our house 2 years ago, we got the build to do only "structural" upgrades - things we couldn't do easily later on. The builders prices for upgrades were ridiculous!!! For example, they wanted $15 sq.ft. for hardwood flooring, for basic oak. We put in Brazilian cherry last year for $7.50 sq.ft.
Get them to do the stuff you can't do, but save everthing else for doing later! Even contractors after the build will do it cheaper than the builder.
2006-09-15 05:37:54 · answer #5 · answered by Ism 5 · 2⤊ 0⤋
It is usually much cheaper doing it yourself. However some jobs like windows and wall decor is probably much easier for the builder to do than later modification. So it is a case by case evaluation.
2006-09-15 05:31:09 · answer #6 · answered by Calvin the Bold 3 · 1⤊ 0⤋
Do it during building. The house cost is factoring in the upgrades.... If you wait until you do the upgrades later, your mortgage will be paying for the basic + you will be buying the upgrade. Sounds like double cost to me.
2006-09-15 05:35:14 · answer #7 · answered by words_smith_4u 6 · 0⤊ 0⤋