Buy now, build later?

Ihana

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I have posted a few threads in recent weeks.

We are a couple in mid-late thirties recently married. Neither of us have owned property before. We have good earnings right now (take home 6200 per month) and no debts. We have talked to the banks and they seem eager to get our business for a mortgage. However I am terrified of overextending ourselves. My job is a succession of rolling contracts and is based outside Ireland (and EU). It is well paid but I am outside the welfare system now. I wouldn't find it easy to get a job here. If we have children, I am afraid my contract would not be renewed after maternity (which is full pay for three months). My husband is more employable.

We have a site and a family member who is an architect. She has told us to prepare for 2000/sq m building costs, i.e. 300,000 for a fairly modest building. I am also afraid 1, that our circumstances would change between now and turning of sod and we wouldn't get mortgage, or 2, that we would get a mortgage and the payments would put us under significant financial strain.

We are also renting at present and are finding it increasingly frustrating and inconvenient (major shortage of suitable properties around our area).

So, would it be silly to buy a modest house now (c. 180,000) which is ready to move in to and continue to save and move towards building in the next three years or so? if circumstances allow. The house we are looking at buying has been well kept, and just really needs cosmetic updating, and should be easy enough to sell on again. Staying there 10 years if necessary would be preferable to renting to me. How would this affect our ability to build down the line? (besides digging into our savings (20,000 deposit, 20,000 for light refurb, 2000 stamp duty, legal fees). I would hopeful the property would rise slightly in value over time as well.

tl dr what are the implications of buying now if we wish to build later.
 
Sorry posted above by mistake

My understanding is that you own a site already.
You might consider building a 2000 square ft house.
You reckon the cost to build this house would be around 300k.

I live in the Wexford area and for a basic 2000 square ft house builders would line up to build same for a cost of around 210k in the present climate.
If you were to invest 40k of your own money in the project that would leave you with a mortage of 170k.
How does compare to the rent you are now paying?

If you build yourself you will have a better product of your own design and choice.
Your rental costs might be similar to your loan payments but at least you will own the property eventually.
You will always need to live somewhere. A nice one off house will most probably appreciate more than the cheaper property you are considering to buy.

Stop stressing. Sit down do the figures and go for it.

D
 
Thanks for your input. I know I am a stresser about these things. I got into a tight corner once upon a time and am overly cautious since. Yes we own the site. Its not really a straightforward site as there is a very very old cottage on it and cut stone outbuildings and lots of mature trees plus remains of an old garden. So it would need to be done sensitively (but will be lovely when done). WE would also aim to get as close to passive as budget would allow.

Its just the thought of renting for 2 ? more years is so offputting. We are currently renting a holiday home and need to vacate when the owners come (3 times this year). Its very cheap though.
 
Building always costs more than you think and your family member is probably more accurate when total finishes are taken into account so plan accordingly.

If you are buying buy something that you would be happy to stay in if it came to it, hard to pick a house you can be guaranteed of selling for the price you want when you need to.
 
yeah I am pretty sure this bungalow would be a safe enough bet to sell. Am less sure about something we would build. but yes it would be lovely and we would get what we want. Another option has popped up now. Buying out my parents house and for them to downsize. It would need significant renovation but is a lovely property. AAAHH My head is wrecked.
 
My head is wrecked.

Then you need to stop. And rethink. What is it you want right now. Seems to me it's to have a place of your own so that is what you should go with. The site will wait for you when you are ready.
 
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