Suppose you are a home buyer who can find a resale home for $275,000 that fulfills all your wants and needs. You consider buying a new construction home but when you comparison shop you find that the same size home with the features you want will cost you $300,000. You conclude that the new construction home is too expensive and decide to keep looking for a resale home in the $275,000 price range.
Before you abandon the idea of buying a new construction home, let’s take a closer look at some future expenses you might want to think about before making your decision. The average homeowner stays in their home for 11-15 years. I’ll use 10 years for my calculations below for simplicity.
The department of Energy’s Building Technologies Office is working with the residential building industry to reduce energy use for space conditioning and water heating in residential single family homes, from 2010 usage levels by 40% by the year 2025. Homes built today can be as much as 25% or more energy efficient than homes built only 5 years ago. Lowering your electric bill by $50 per month can save you $6,000 over 10 years.
According to the Florida Office of Insurance Regulation homeowner’s insurance for $300,000 new construction home can be a low as $1385 per year in Pasco county and $1807 in Hillsborough county. Lowering your monthly insurance cost by only $75 per month can save you $9,000 over 10 years.
How old is the roof on the resale home? Roofs in Florida are typically replaced every 15-25 years. If the roof on the home you are buying is more than 10 years old, you may need to replace it in the next 10 years at a cost of $10,000-$25,000.
How old is the hot water heater in the resale home? Hot water heats typically last for 8-10 years. If the home you are buying is more than 5 years old you will most likely have to replace the hot water heater in the next 10 years at a cost of $600-$1,000.
How old is the HVAC system in the resale home? HVAC systems are typically replaced every 15-25 years. If the home you are buying is older than 10 years old you may need to replace the HVAC system within the next 10 years at a cost of $6,000-$10,000 or more.
If instead you purchase a new construction home and move at or before the 10 year mark you may not need to replace any of these items while you are living in the home or before you sell.
If you purchase a 10 year old resale home the money you spend over the next 10 years could be as much as $31,600-$51,000 to replace and/or maintain these items in addition to any money you spend on home improvements or upgrades. This equates to as much as $263-$425 per month over 10 years.
If you spend $25,000 more today to buy a new construction home at 5% interest rate for 30 years, your monthly payment will be approximately $134.21 more per month. This can still put you ahead ($263-$134=$129 per month over 120 months) by $15,480 to $34,920 over 10 years!
Not only have you potentially saved money when buying a new construction home, but everything is new and designed by you. Let’s start saving you money…click the link below to search for new construction homes or contact me today. Let’s find your dream home now!