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burgeman
Southeastern LA Fan
Member since Jun 2008
7219 posts
Online

Buying land and building or buying house and remodel

Have the option to either buy prime real estate property for 100k and putting a 150-180k house on it or buying a home for 150k that could have a remodel budget of 100k in the same real estate area. What would be the better option?

I am leaning towards the buying the lot and building a personal home instead of completely gutting and potentially running into problems with a remodel


LSUGUMBO
New Orleans Saints Fan
Shreveport, LA
Member since Sep 2005
5576 posts

re: Buying land and building or buying house and remodel
I always thought the rule of thumb was that the lot should be less than 20% of the total value of the lot/house. Maybe that's just in this area, but I don't think I would build a $150K house on a $100K lot.


notiger1997
Member since May 2009
26057 posts

re: Buying land and building or buying house and remodel
quote:

I always thought the rule of thumb was that the lot should be less than 20% of the total value of the lot/house. Maybe that's just in this area, but I don't think I would build a $150K house on a $100K lot.


Where did you get this nonsense?

For the OP, I would choose to build new. I've been through a huge renovations when we purchased our house from a family member. Damn near gutted it. It ended up costing quite a bit more than we budgeted and took much longer.

With going with the new build, you get exactly what you want.


Costanza
Auburn Fan
Member since May 2011
441 posts

re: Buying land and building or buying house and remodel
Agree that the lot seems very expensive for a $150k house. Unless there's something special about this lot? Acreage? On a river? Give more details
This post was edited on 5/20 at 12:13 pm


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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
7696 posts

re: Buying land and building or buying house and remodel
quote:

Where did you get this nonsense?


Its pretty standard that whatever you spend on lot you spend no less than 3x that on dwelling, you risk devaluing the land if no one wants your chicken shack on prime real estate


notiger1997
Member since May 2009
26057 posts

re: Buying land and building or buying house and remodel
Sorry, I guess I mis-understood what the guy was trying to say.


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Jason9782003
LSU Fan
Member since Aug 2007
3073 posts

re: Buying land and building or buying house and remodel
You're not going to build much of a house with that kind of budget. You're looking at $85-$90 per sq ft to build, and that's on the low end.


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islandtiger
LSU Fan
Baton Rouge
Member since Sep 2012
1003 posts

re: Buying land and building or buying house and remodel
All depends on the property. We will not meet your limit but our lot is 5 acres on an island. We are about to pour the slab on our new home, but there have been a few times I wish we just bought something "off the rack." Although I plan to raise a few chickens out near the garden, few will call our home a "chicken shack."


DontTazeMeBro
Tennessee Fan
Gatlinburg, TN
Member since Oct 2011
137 posts

re: Buying land and building or buying house and remodel
Not sure what your market looks like. Where I am at, prices for existing homes are considerably below comparable new construction. Even with renovation costs, you'll still end up well ahead.

But of course, every market is different. Best of luck!


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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
7696 posts

re: Buying land and building or buying house and remodel
quote:

All depends on the property. We will not meet your limit but our lot is 5 acres on an island. We are about to pour the slab on our new home, but there have been a few times I wish we just bought something "off the rack." Although I plan to raise a few chickens out near the garden, few will call our home a "chicken shack."


My comment was not directed to you, but if you are truly spending 150k on a 100k land that is "prime real estate", thats a bad decision. You're actually devaluing the land and the surrounding land by doing so.

Now if its nice property and you're paying 20k an acre and putting a nice home to raise the fam for 150k, sure, more power to you.

There is no island on earth im aware of that prime real estate can be had at 20k an acre, which was the OP's question.
This post was edited on 5/21 at 10:12 am


islandtiger
LSU Fan
Baton Rouge
Member since Sep 2012
1003 posts

re: Buying land and building or buying house and remodel
I was just giving an example of why the land value:house value ratio is really meaningless unless your only consideration is resale value. Land is what matters to me and I would be happy with a $100,000 cabin on a $1 million piece of property. My wife does not exactly share my view so our land:house ratio will not be so unbalanced.


LSUGUMBO
New Orleans Saints Fan
Shreveport, LA
Member since Sep 2005
5576 posts

re: Buying land and building or buying house and remodel
quote:

I was just giving an example of why the land value:house value ratio is really meaningless unless your only consideration is resale value. Land is what matters to me and I would be happy with a $100,000 cabin on a $1 million piece of property. My wife does not exactly share my view so our land:house ratio will not be so unbalanced.


Obviously the ratio doesn't apply in large tracts of land. I guess I should have been more specific to include only residential neighborhood lots.


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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
7696 posts

re: Buying land and building or buying house and remodel
quote:

I was just giving an example of why the land value:house value ratio is really meaningless unless your only consideration is resale value. Land is what matters to me and I would be happy with a $100,000 cabin on a $1 million piece of property. My wife does not exactly share my view so our land:house ratio will not be so unbalanced.


I get where you're coming from. The big difference is we're talking prime real estate. As posted by others, you spend 1M on 1000 acres in Breaux Bridge a 100k cabin is fine. The price is irrelevant.

Buy an acre on the harbor in the Hamptons for a mill and build a 100k cabin and you've lost money immediately.



islandtiger
LSU Fan
Baton Rouge
Member since Sep 2012
1003 posts

re: Buying land and building or buying house and remodel
Understood. If I could find 1000 acres near BB for a $1 million, I would buy it tomorrow!


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