Home Buying in Miami>Question Details

Eric Sanchez, Home Buyer in Miami, FL

New custom construction vs buying

Asked by Eric Sanchez, Miami, FL Mon Sep 17, 2012

Hello everyone,

I've been on the market for a 1 story 3/2 home in the newer Miami Lakes / PSN area for a couple of months. However, there's a very limited number of properties being listed that match our criteria and under the price of 325k.

Most of the homes we're are interested were built in the late 90s, early 2000s and sold for under 210k. Considering today's prices, is it even feasible or advisable to buy one of several available lots going for around 100k and build a 2000 sqft modern house, similar quality to those being sold for 200k in 2001, nothing very high-end, for under 350 total?

I would greatly appreciate feedback from anyone that has experience with this. Also, any recommendations for GC firms?

I will soon start calling GC for estimates, but wanted to receive any helpful input first.

Thanks for your help.

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Answers

3
Eric,
I have asked myself this question many times. As a realtor and real estate investor who has remodeled several homes and come very close building a spec home on several occasions, I have to say it's not as simple as one may think.

First, as you mentioned, current property values are still low, much lower than builders need it to be before they can build and turn a profit when they sell. According to my builder contact, the price per sq ft to build a standard home today is about $125 to $150 a sq ft.

If you were to build a 2000 sq ft standard home (mid range finishes) would probably cost you between $250K to $300K and the $100K for your lot. Based on these figures, your total would be between $350K and $400K for a brand new home, and about 1 1/2 years to complete (from permits to final CO).

Your other alternative would be to find a newer home (20 years old or less) and remodel it. This takes less time, is an easier task to oversee, and the total cost may be less than building a new home. If you go this route, make sure you contract a reputable, licensed and insured contractor who will pull permits for everything.

So, to answer your question, it really depends on your needs and how much time you are willing to devote to the project. As for the cost, in both cases, it will mostly depend on how much you are willing to compromise (less or more) in the quality of the finishes you chose for either project. And, finally, how soon do you need to be in your home.

I realize that it's going to take some time to find an existing home. Maybe you need to lower your expectations. I would suggest that you look for the best location and property lot size (7,500 to 10,000 for a 2000 sq ft home). Don't worry so much about what the improvements (building) looks like or its size as long as there is room for an addition. You will be amazed at what a reputable professional can do with an existing property.

If you would like to discuss this further, you may contact me at 786.302.0351 or email me at juan@insideMIAMIrealestate.com.

Juan Sanchez - Broker Associate - Real Living FSR - Coral Gables, FL USA



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0 votes Thank Flag Link Wed Sep 19, 2012
*250K I mean 250 per sqft with a GC.

It is better to buy and existing construction and make the upgrades at your own taste.
usually renovation required less money, and less time.
I see it this way I may be wrong.
Good luck.
0 votes Thank Flag Link Tue Sep 18, 2012
Right now you may be able to get a house between 150-200 dollars per sqft.
If you have to build the house it will be a little over 200K with the lot.
0 votes Thank Flag Link Tue Sep 18, 2012
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