Should You Buy or Build Your Dream Vacation Home?

Posted April 24 2015
by PenFed Team
Family outside vacation home with children playing

If you’ve decided it’s time for a vacation home, your next decision is a bit trickier: should you buy an existing piece of property or build your dream home from scratch? Buying existing construction can cost less (depending on the current state of the housing market and how extravagant your vacation plans are) and get you into a vacation home quickly. Building, on the other hand, tends to take more in both time and money — but in the end, you’ll wind up with a home that’s brand new and exactly what you want.

Though there’s no clear-cut right or wrong answer, we’ll walk you through the considerations for building and buying to help you determine what the best move is for you.

What’s Your Budget?

The costs for both buying and building will vary greatly. You’ll want to check prices to see what you could afford with both buying and building. In some markets you’ll be able to get a lot more house by buying an existing home, so you’ll have to weigh the advantage of low cost against the advantage of having a house designed around your needs.

However, there are circumstances in which building can be an economical answer, too. For example, if you’re looking at properties that would require extensive remodeling to suit your needs, building may be a better option. Additionally, while building a completely custom home can be fraught with costs, a semi-custom home, built to your specifications around a builder’s existing designs, can be a way to get a home that’s just what you want without starting the design process from scratch — and paying for it.

Do You Know What You Want?

Perhaps your needs in a vacation property are simple: you want two bedrooms and one bath, close to the beach. A general idea like that can be easy to find in existing property, but if you have more specific idea of what you want — from colors to finishes to specific room layouts — building something that’s just what you want may be more appealing.

Do You Want to Remodel?

One of the pain points of buying an existing property is that it, and everything in it, is likely to be old (or at least not new). Do you want new tile, new countertops, new appliances, new paint colors? Then you’re talking about remodeling, which adds to your time and cost.

But beyond cosmetic matters, not all old homes have aged well. Even with a home inspection before you buy, you may find your new home requires maintenance or repair, from an old furnace to a leaky roof. Sure, new homes can have issues, too, but they haven’t yet aged or been victim to wear and tear, which can mean lower repair costs as well as peace of mind.

Additionally, homes with new windows, insulation, and appliances are likely to be more efficient across the board — which can mean lower utility bills.

Location, Location, Location

Where you want your vacation home can have a big impact on whether you should build or buy. In crowded urban areas (or popular vacation spots), it can be difficult to find places to build, but existing construction is plentiful. In more remote areas, you may find the opposite is true: land is plentiful, but pre-existing homes that suit your needs are rare.

Cost plays a factor here, too: in more crowded urban areas, it’s likely to cost less to buy than to build simply due to the availability of homes compared to the availability of land. In rural areas, again, you may find the opposite is true, so it’s important to weigh the costs for the location of your choice.

How Much Time Do You Have?

While a you’re likely on a less strict time-frame with a vacation home than you would be with a primary residence, it’s still worth noting that there’s often a big time difference between buying and building a home. If you buy an existing home, you can typically move in as soon as the ink is dry on the closing paperwork. But if you’re building (or remodeling), it may be months before your vacation home is vacation ready.

Before you make a decision, take the time to consider just when you want to take your first vacation and plan your purchase accordingly.