Why Build a Custom Home
When shopping for a home, there are many alternatives to choose from with regard to the location, style and price of your new residence. These choices include purchasing single family homes, town homes and condominiums. The options also include purchasing a resale or a new home and even when choosing a new home there are alternatives such as purchasing in a subdivision from a tract builder or purchasing a custom home which better fits your lifestyle and needs.
What are the advantages of building a custom home?
Choice. While purchasing new home gives a home buyer more choices as opposed to a resale, a custom home typically gives a home buyer the ultimate array of choices. These choices include the design and layout of the home as well as special features that fit the lifestyle and needs of the prospective home owners. For example, if one is expecting that parents will someday share the home, it can be designed to fit a multi-generational lifestyle. If energy efficiency is important, then the home can be designed to minimize the use of energy.
Location. Your only choice of locations with a tract builder is within subdivisions which are still being built out. With a custom home, you can purchase a lot in a location which is more convenient to work, your children's school or closer to friends or relatives. You could choose to live out in the country on a larger lot or closer to shopping and other services.
Type of lot. With a tract home you have a choice of only the lots that are available within the subdivision, and if you select one with upgraded features, you will pay a premium. When building a custom home, you not only can choose the location of the lot, but also the type of lot -- including the size and configuration.
Contractors. Subdivisions may give you one or just a few choices of builders that offer a limited array of models. With a custom home, you can choose any contractor and work with them to build your dream home.
Of course, custom homes include some of the same advantages as new homes versus resales. A new home…
- Allows the owner to choose their own color scheme, appliances, flooring and more.
- Is more energy efficient than a resale because environmental standards and technological advancements keep evolving.
- Will have fewer maintenance costs moving forward as opposed to an older home.
- Will have more standard safety features and may be less costly to insure because of these features.
The advantages of a custom home also extend into the financing arena. With a tract home, the home owner obtains the financing after the home is built. That means the builder is incurring the costs of the lot acquisition, development and construction. These costs are added into the price of the house. With a custom home, the home buyer has the choice to obtain their own construction loan. This can lower the cost basis of the home while typically making fees and interest paid directly by the homeowner tax deductible.*
In short, the advantages of building and financing a custom home are wide ranging. These include the ultimate range of choices, lower maintenance costs, energy efficiency and may even enhance your tax deductions.*
*You are advised to seek the advice of a tax professional to determine if the costs of financing qualify to be deductible in your situation.