by Michael Mwika 
In Kenya today, everyone is looking to save on every cost, including that of home ownership. However, owning a home involves meeting other needs and priorities that costs cannot quantify.
Therefore, when preparing to own a home, one of the biggest decisions you will make is whether to buy an existing home or build a new one from the ground up.
Each of the two options has pros and cons, and the decision boils down to what you like, how much you can afford to spend, how quickly you want to achieve your goals, and what you hope to see in the future.
A Detailed Analysis of Buying vs Building a Home
In this comprehensive guide, we will explore the pros and cons of buying a house versus building one, to help you choose which is more likely to fit your needs.
To do that, we will analyze 8 aspects of homeownership and explore the dynamics, costs, and factors associated with buying a house against the option of building one.
Then later, we will look at the costs involved with a view of giving insight on which is cheaper. A similar view on the risks of each option. Read on to the end to get a complete overview.
1. Initial Costs: Which Option is More Affordable?
Buying a House:
When you buy an existing home, the price is fixed and includes the land, the building, utilities, and sometimes some home improvements.
Buying an existing home may be more affordable upfront, depending on where you’re purchasing and what the market is like, especially if you’re in an established neighborhood.
Pros:
- No unexpected costs; the price is usually set.
- You can negotiate the price, especially in a buyer’s market.
- Costs include land and home together.
Cons:
- You may end up paying more for features or spaces you don’t need.
- The cost of renovations or updates can increase the overall price.
Building a House:
The upside to building a new home is that you have more control over the costs – you can choose the materials, the design, and the size. But it comes with unpredictable expenses as well. That means they have to buy land, hire contractors, and pay for the materials needed for building which can sometimes mean higher initial costs.
Pros:
- You control the budget and can choose where to spend and save.
- No need for major repairs or upgrades.
- You might save on utility costs due to energy-efficient materials.
Cons:
- Land acquisition is a separate cost.
- Unforeseen expenses like delays or material price increases can arise.
2. Customization: How Much Control Do You Want?
Buying a House:
When you purchase an existing house, what you see is largely what you get.
While you can renovate or remodel certain areas, you’re limited by the house’s existing structure and layout.
Pros:
- You can start using the home right away without waiting for construction.
- Small modifications like painting, landscaping, or redecorating can personalize the home.
Cons:
- Limited options for customization unless you commit to a large renovation.
- Older homes may have layouts or features that don’t match your lifestyle.
Building a House:
Building a home gives you full control over the design. You get to choose everything, from the floor plan to the fixtures, finishes, and landscaping.
Pros:
- Full control over design and layout, allowing you to tailor the home to your preferences.
- You can incorporate the latest technology, energy-efficient systems, and smart home features.
Cons:
- The design process can be time-consuming and stressful, especially if you’re unfamiliar with construction.
- Costs can spiral if you decide to upgrade or change features during the building process.
3. Time and Convenience: How Soon you want to Move in
Buying a House:
Buying a home is generally quicker than building one.
Once you’ve found the right property and secured financing, the process of closing on the home can take just a few weeks to a few months, depending on factors like inspections, appraisals, and negotiations.
Pros:
- You can move in as soon as the transaction is complete, usually within a few months.
- Fewer logistical challenges, as the home is already complete.
Cons:
- You may have to compromise on features or location based on available listings.
- Unexpected repairs may be needed after purchase.
Building a House:
Building a home takes significantly longer—anywhere from several months to over a year, depending on the complexity of the design, weather conditions, and availability of materials.
Pros:
- You get exactly what you want when the project is finished.
- The home is brand new, with no need for repairs or updates for several years.
Cons:
- Longer timeline before you can move in.
- Delays due to weather, labor shortages, or supply chain issues can push the completion date further out.
4. Location: Finding the Right Spot
Buying a House:
Existing homes are typically located in established neighborhoods, which may offer the convenience of nearby schools, parks, and shopping centers.
These areas often have more mature landscaping and infrastructure like public transportation and utilities.
Pros:
- Access to established amenities like schools, shops, and parks.
- Neighborhood characteristics are well-known and stable.
- Mature landscaping and developed infrastructure.
Cons:
- Limited choice in available lots or homes.
- You may have to compromise on location or size if inventory is limited.
Building a House:
When building, you have the flexibility to choose your lot, whether it’s in an up-and-coming area or a rural setting with more space.
However, new developments may not have the same level of infrastructure or amenities as established neighborhoods.
Pros:
- Freedom to choose a lot based on your preferences.
- New developments might offer more future growth potential.
Cons:
- Newer areas may lack established amenities or community services.
- Landscaping and other improvements will need time to develop.
5. Quality and Condition: New vs. Existing Structures
Buying a House:
With an existing home, you’re buying a property that has already been lived in.
The age of the home may result in wear and tear, outdated systems, and the need for repairs or renovations.
Pros:
- You can inspect the condition of the home before purchase.
- Older homes may have higher-quality materials like solid wood or masonry.
Cons:
- Older homes may have hidden issues such as plumbing, electrical, or foundation problems.
- Renovations or repairs may be necessary.
Building a House:
New homes are built to modern standards, often using newer, more energy-efficient materials. You also have the peace of mind of knowing that all systems are brand new.
Pros:
- Everything is brand new, from the foundation to the roof, minimizing maintenance.
- The home meets current building codes and safety standards.
Cons:
- New materials or construction methods might not be as durable as those in older homes.
- Minor issues or defects may still arise in the first few years.
6. Maintenance: Long-Term Costs and Considerations
Buying a House:
Older homes often come with more maintenance needs.
As systems like plumbing, HVAC, and roofing age, they may require repairs or replacements, which can add to your long-term costs.
Pros:
- Most existing homes have a track record of what to expect in terms of maintenance.
- You can budget for any needed updates or repairs.
Cons:
- Higher ongoing maintenance costs.
- Older homes may require expensive updates to bring systems up to modern standards.
Building a House:
New homes generally require less maintenance in the first several years, as all systems are brand new and under warranty. This can result in lower overall costs during the initial period of homeownership.
Pros:
- Lower maintenance costs in the first few years.
- Warranties cover major components for added peace of mind.
Cons:
- Some maintenance tasks (like landscaping) are still necessary in new homes.
- Warranties may not cover every issue that arises.
7. Energy Efficiency and Environmental Impact
Buying a House:
Older homes may not be as energy-efficient as new builds.
They might have outdated insulation, inefficient windows, or older HVAC systems, which can lead to higher utility bills and a larger carbon footprint.
Pros:
- Some older homes can be retrofitted with energy-efficient systems.
- Solid construction in older homes may provide natural insulation.
Cons:
- Higher energy costs due to outdated systems.
- Retrofitting can be expensive and time-consuming.
Building a House:
New homes are typically built with energy efficiency in mind. Modern insulation, windows, and HVAC systems can significantly reduce energy consumption, which is good for both the environment and your wallet.
Pros:
- New homes are more energy-efficient by design.
- Lower utility bills due to modern systems and materials.
Cons:
- Initial costs may be higher if you opt for high-end energy-efficient features.
8. Emotional and Personal Considerations
Buying a House:
Buying an existing home can be more emotionally appealing if you find a property with a unique history or character.
Established neighborhoods may also offer a sense of community that can be attractive to many buyers.
Pros:
- Charm and character in older homes can be emotionally satisfying.
- The sense of community in established areas can be a big plus.
Cons:
- You may have to compromise on certain features or styles.
- Renovating to make the home feel truly yours can take time.
Building a House:
Building a home allows you to create a space that is uniquely yours, from the layout to the finishes.
This process can be deeply rewarding, but it also comes with stress and decision fatigue as you navigate the many choices that need to be made.
Pros:
- You get to design a home that perfectly suits your needs and tastes.
- Personal satisfaction from creating something new and customized.
Cons:
- The building process can be emotionally draining and stressful.
- Decision fatigue from making countless design and construction choices.
Which is Cheaper? Building or Buying a House
Whether building or buying a house is cheaper depends on several factors, including location, materials, and personal preferences.
Here’s a breakdown of both options:
Cost Summary of Building a House:
Building a home can be more expensive upfront due to the cost of land, permits, materials, and labor.
However, you have control over the design, materials, and finishes, which means you can tailor the costs to fit your budget.
You also benefit from having a brand-new home that doesn’t need major repairs for years, and new builds often come with energy-efficient systems that reduce long-term utility bills.
Building Costs include:
- Purchasing land
- Construction materials
- Hiring architects, contractors, and workers
- Permits and inspections
- Custom design features
- Landscaping (if required)
Potential cost savings when building:
- Energy-efficient design
- No immediate maintenance costs
- Avoiding bidding wars in competitive markets
Cost Summary When Buying a House:
Buying an existing home can be cheaper upfront because the house is already built, and you only need to pay the purchase price, closing costs, and possibly renovation costs if needed.
In hot real estate markets, however, bidding wars can drive up prices. While existing homes may not have the latest energy-efficient technology, you avoid the complexities and delays of construction.
Buying Costs include:
- Purchase price
- Closing costs
- Inspection fees
- Potential renovation or repair costs
Potential savings when buying a house:
- Lower upfront costs compared to building
- Faster move-in time
- More financing options like mortgages
Which is Cheaper Overall?
Generally, buying a house is cheaper upfront because construction costs can add up. However, over the long term, a newly built home may save you more on maintenance and energy bills, while an existing home might require more repairs and upgrades.
The answer ultimately depends on your priorities—whether you prefer customization and a brand-new home or the convenience and potentially lower costs of buying an existing property.
Which is Risker? Buying or Building a House
Both buying and building a house come with their risks, and which one is riskier depends on several factors like budget, time, and market conditions. Here’s a breakdown of the risks associated with each option:
Potential Risks of Buying a House:
1. Hidden Issues:
An existing home might have problems that aren’t immediately obvious during inspections, like faulty wiring, plumbing, or foundation issues. These issues can lead to costly repairs later.
2. Market Fluctuations:
Real estate markets can fluctuate, and if you buy in a seller’s market, you might overpay. If the market dips, the value of your property could decrease, leading to potential financial loss if you need to sell quickly.
3. Competition and Bidding Wars:
In competitive markets, bidding wars can drive the price higher than the property’s actual value, causing you to spend more than expected or miss out on a desired home.
4. Limited Customization:
When buying an existing home, you may need to compromise on certain features, or you might end up spending extra on renovations to make it fit your needs.
5. Age and Wear:
- Older homes come with the risk of needing updates or repairs to things like roofing, heating systems, or windows, which can increase the overall cost after the purchase.
Risks Associated with Building a House:
1. Cost Overruns:
Construction projects can easily go over budget due to unexpected issues, material price increases, or changes in design. This could result in significantly higher costs than initially planned.
2. Delays in Construction:
Weather, labor shortages, or supply chain issues can delay the construction process, sometimes by months, leaving you in limbo if you need to move in by a certain date.
3. Zoning and Permitting Issues:
Depending on where you’re building, zoning laws and permits can cause legal hurdles and delays. It’s important to ensure everything complies with breaking ground.
4. Unpredictable Market Conditions:
Building a house takes time, and during that period, interest rates or construction costs could rise, increasing your overall financial burden. The property value may also fluctuate during the construction phase.
5. Choosing the Wrong Contractor:
If you select an unreliable builder or contractor, you could face shoddy workmanship, poor communication, or even legal battles, resulting in delays, increased costs, and lower-quality construction.
6. Stress and Time Commitment:
Managing a construction project can be stressful and time-consuming, especially if you’re unfamiliar with the process. There are numerous decisions to be made, and setbacks can add to the pressure.
Which is Riskier?
Buying a house tends to have more predictable risks, such as hidden defects or market changes, but you generally know what you’re getting with an existing property.
However, building a house can be riskier in terms of financial uncertainty due to potential cost overruns, delays, and construction issues. However, you have more control over the design and quality of the home.
Ultimately, the riskier option depends on your situation—your budget, timeline, and tolerance for uncertainty.
If you’re willing to manage a project and deal with the unexpected, building can be rewarding, while buying offers more stability but may require compromises.
Final Word: Which is the Best Option?
Ultimately, the choice between buying an existing house and building a new one depends on your individual needs, preferences, and circumstances.
If you’re looking for a quick, convenient move with access to established amenities and community, buying an existing home might be the best option for you.
However, if you dream of customizing every aspect of your home and don’t mind waiting for the construction process, building a new house could be the perfect choice.
Each option comes with its own set of challenges, but by carefully weighing the pros and cons, you can make the right decision for your lifestyle and financial goals.
Whether you choose to buy or build, the most important thing is that your home feels like the right fit for you and your family.
