To buy or to build is a personal choice

There may come a day when you decide you want to build your own home, rather than buy a ready-built house. You have probably engaged an estate agent, or three, and looked at suitable areas where plots are available and, hopefully, you’ve done a sanity check to ensure you have the mind-set, personality and staying power to go through the process. And if you haven’t, time will certainly be the deciding factor.

to buy or build

Partners Stuart Cohen and Gerhard Stegmann of CabinCare recently completed their own building project.

Basic research into the property market in the greater Hermanus area will illustrate how many vacant plots there are, and in a short time you’ll be able to determine a match for the funds you have available, as far as a purchase price goes. For obvious reasons, suburbs and their respective property values vary dramatically, and one needs to be cautious about balancing the potential long-term return on the entire transaction, against making a hasty price-only decision that you could regret over time.

The simplicity of buying a house against building a new one far outweighs the time, frustration, cost and challenges that building presents. The downside of buying is that you never get exactly what you want, and you may find yourself buying into levels of maintenance that you would never have anticipated. Building, however, puts a different kind of pressure on the purse. You must be bold to go this route.

Currently, there are more than 550 ‘For Sale’ listings for plots ranging in size from 200 m² to 2 000 m², with prices from R170 00 in Hawston to R25 million in Voëlklip. The average property size is in the 500 m² to 700 m² category, and if these plots are close to the sea, the price premium is clearly discernable, particularly in Voëlklip and Onrus.

At the higher end of the market, prices for the size of land can be disproportionate across different suburbs, but that is the nature of the property market. Examples of this are: R25 million for 990 m² in Voëlklip; R7.5 million for 586 m² in Onrus; and R9.45 million for 1 208 m² in Sandbaai. The choice is varied and often people’s emotions enter the equation, so they commit to buying for the wrong reasons, including circumstantial pressures, rather than keeping in mind what the budget allows.

Ultimately, if you have ticked the ‘I can build’ box, shift your mental gear and reflect on the budget you’ll need. Once you start building you won’t want to have to cut back because you underestimated what your available funds would cover. A tight budget has limited flexibility so be sure you have estimates of all the costs involved, otherwise you will find the process disappointing and frustrating.

From recent, personal experience, my advice is to work on pre-build expenses of about 5% of the total cost of building. These include fees for the following services – architect; geologist (if required); engineer; National Home Builders Registration Council; council fees for plan approval, water connection, septic tank testing and connection; and the Eskom or council electricity connection fee. As these charges vary from suburb to suburb, and the size of the property, it’s advisable to get an estimate at budget stage to make your financial planning more realistic.

Part of the process that will test your resolve is discovering how varied the cost of building can be, depending on your choice of contractor. This is a make-or-break decision that will leave you either with pleasant memories – or haunted for life.

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