Posted on 4th October 2022

Should You Build or Buy a House? Let’s Look at the Pros and Cons

The real estate market is ever-growing and ever-changing. It can be challenging to keep up with the trends, let alone make a decision about something as big as buying or building a house. When planning to invest in a property, you must first ask yourself an important question: should you build or buy a house? There is no easy answer to this question. It depends on many factors, including your budget, timeline, location, and personal preferences. Let’s take a look at the pros and cons of each option to help you make a decision.

Buying a House

As a real estate investor in Central Coast, New South Wales, buying an already-built property is always appealing. That is because it has a strong history of property investment growth. However, it helps to have some guidance, to ensure a solid return on your investment. Working with a Central Coast Buyers Agent provides access to highly experienced experts in real estate to seek out the ideal property, effectively doing a lot of the work for you. The team would work with you to understand what you’re looking for, your budget, and the market trends. They are also well-connected to the right people in the industry. This would be a highly recommended approach, as it eases up the process and saves you a great deal of money and time.


The Pros

Here are some of the benefits of the buying approach:

Immediate Equity in the Property

Home equity is the portion of your home’s value that you own. When you buy a house, you immediately start accruing equity. This is because your down payment and any future mortgage payments reduce the money you owe on the property. Your home equity increases as you make payments, and the principal loan balance decreases. You can eventually build enough equity to sell the property and pocket the profits. Or, you can use your equity as collateral for a home equity loan or line of credit, giving you extra cash to reinvest in another property.

A Variety of Property Types to Choose From

When you’re looking to buy an investment property, you have alternatives regarding what you can go for. You can buy a single-family home, a multi-family home, a condo, or even land to build on in the future. The type of property you choose will depend on your investment goals. For example, if you’re looking for a short-term investment, you might buy a fixer-upper home and flip it for a profit. If you’re looking for a long-term investment, you might buy a stable rental property that will provide you with consistent cash flow.

More Affordable Than Building

The cost of materials and labor has risen in recent years. It makes building a new home much more expensive than it was in the past. On the other hand, the cost of buying an existing home has remained relatively stable. In most cases, buying an existing home is more affordable than building a new one. If you’re on a tight budget, buying might be your best option.

The Cons

There are also some drawbacks to buying an investment property. These include:

The Competition is Fierce

In today’s market, there are more buyers than homes for sale. You’ll likely have to compete with other investors for the properties you want. As a result, you might have to pay more than you planned or settle for a property that’s not ideal. 

It Can be Challenging to Find the Right Property

The real estate market is constantly changing. Finding a property that meets all your investment criteria can be complex. You might have to settle for a property that’s not quite what you wanted or overpay for a property in high demand.

You Might Have to Make Repairs

An older home is more likely to need repairs than a new one. This can be expensive and time-consuming. You might have to put more money into the property than you planned to get it up to your standards.

Building a House

Here are some of the benefits of this approach:

You Can Customize the Property

When you build a property, you can design it to meet your needs. For example, you can choose the number of bedrooms and bathrooms, the layout of the rooms, and the finishes. It allows you to create a perfect property for your needs that will appeal to your target tenants. However, it would be best if you made the contractor understand what you want to achieve with the build. Having a clear vision for your property is crucial before starting the construction process.

You Can Choose the Location

When you buy an existing property, you’re limited to the available locations on the market. But when you build a property, you can choose the best location for your needs. For example, you might want to build a property in an up-and-coming neighborhood that’s likely to appreciate. Or, you might want to build in a more established neighborhood that’s already popular with renters.

The Cons

Of course, there are also some drawbacks to building an investment property. These include:

It’s a Long and Expensive Process

Ordinarily, a home-building project takes several months to complete. It can be a long time to wait for an income-producing property. The longer the project takes, the more it will cost you interest and other carrying charges. Besides, labor and material costs are high, so building a property can be very expensive. This is particularly true if you’re building in an expensive city or neighborhood.

You Need to Hire a Contractor

Unless you’re an experienced builder yourself, you’ll likely need to find a contractor to build your property. This can be a challenging and expensive process. You’ll need to find a reputable contractor who is qualified to do the work and who you can trust to do a good job. Without this experience, it won’t be easy to oversee the construction process and ensure the work is done correctly. As a result, you might end up with a property that’s not up to your standards or costs more than you planned.


There are both pros and cons to building and buying an investment property. It’s essential to weigh these factors carefully before making a decision. Ultimately, your best approach will depend on your specific circumstances and goals.