Building Vs. Buying

If you are in the market for a new home, one of the biggest decisions is whether to buy or build. More often than not, first-time homeowners chose to buy, for many reasons, some of which we will cover shortly. However, for the more experienced homeowner, building a home may be a great option. As with any other major decision in life, there are of course pros and cons to both options that need to be seriously considered before choosing.


Presumably one of the most important factors in the home buying process is the budget. It is vital to set a budget and to also discuss how firm that budget it, as there are many associated costs with buying and building that are not included in the list price. When buying a home, the price listed is more or less negotiable, and the seller should have factored potential negotiation into the list price. Offers can be made below listing price, with the knowledge that closing costs and a pending inspection may raise this. However, an inspection can also shed light on potential fixes or improvements that will need to happen upon moving in, which can quickly add up. When building a house, the list price is typically the lowest, most standard price without much, if any, room to go lower. In actuality, the cost of building typically will be higher than the list price as you add customizations and upgrades. The benefit to this is that an inspection should not show any needed repairs or renovations, as the house is brand-new, saving you money down the line.

Move Date

Most people hunting for a house are working with a deadline. This could be that they want to move their family in before the school year starts in the fall, or have a lease expiration approaching and want out before they are locked into another. Regardless of the reason, time is certainly an important aspect to consider. After making an offer on an existing home, the closing process is typically only a few weeks long, and the buyer can move in anytime thereafter. However, the buyer may be working with a difficult schedule based on when the seller needs or wants to move out. With a new construction home, the wait to move can be significantly longer, as most homes take an average of 7 months or more to build. Other living arrangements may need to be made, but if you are flexible with your current situation, this long wait time can be ideal.  


The style and aesthetic of your home are what makes it your own. When buying a home, you are limited as to the design and layout. It is likely already painted and designed how the seller wanted. Renovations and changes to a home are costly and time-consuming, even if you hire professional help. This is not necessarily a bad thing though, because it gives you the chance to change your home and adds your own personal touches. If you are passionate about DIY projects, most homes offer the opportunity. Should you choose to build a home, a part of the process is selecting various customizations and styles of the home as it is being built. This offers a great opportunity to make your home your own, and there is less chance you will need to make updates or renovations later on. However, adding customizations quickly drives up the price of the home and can even further delay the date that it will be finished.

Technology and Maintenance

The technology that is placed in your home is more important than one may realize. Technology heats and cools a home, it offers security when you are gone, and can generally make your day to day life much easier. When building a home, you can choose to add up-to-date technology in the build and most often little to no maintenance is required. A new home will have a new roof that less likely to leak, new windows that will insulate better, or a new foundation that should not crack. These things will come at a price though. When buying an older home, the roof may need fixing, or new windows may need to be installed. However, older homes tend to provide character and charm that newer homes do not. They also will more likely come with matured trees and landscape in your yard rather than saplings.


While you cannot always directly pick the perfect neighborhood to buy or build in, this is a factor that weighs heavily in the process. Building a home can sometimes come with the option to pick your ideal property in the community. This also means that most of your neighbors will be new to the neighborhood as you. This is a great way to meet new people and become involved in the community. On the contrary, though, many new construction neighborhoods are, well, under construction. Even after your home is built, there is no guarantee that more homes will not be continuing to go up around you. Buying a home usually means that you cannot pick a particular plot of land, as there is likely only the one house for sale. However, an established neighborhood usually comes with neighbors who know the area and are welcoming to new buyers. If you are new to the city, they can offer the best advice on where to eat, or what grocery store is closest.  

Regardless of the home, the buying or building process is not one that should be taken lightly. Both options come with potential negatives, but both can also reap great benefits.

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How Climate Change Affects Real Estate Investments

The climate has long been one of the most intimidating factors that buyers have to consider before investing in real estate in a particular area. When investing in a commercial building in California, you want to make sure that it can withstand a 6.0 magnitude earthquake. If you are looking to buy a bungalow in North Carolina, be sure to consider hurricane season June through November. Buying a small rental property in the heart of Nebraska may seem like a great idea, but Tornado Alley may not be the best investment location. These are all things that serious real estate investors will weigh before sinking their funds into a property. However, with climate change becoming more evident in recent years, investors should now consider how the change in the weather may affect their already existing investments.

Physical risks of climate change are those that would come as a result of traumatic weather conditions. Rising sea levels due to persistent rain can cause flooding in coastal areas. Real estate property on or near the coast is more susceptible to flooding and water damage. Another result of severe climate change is rising temperatures in dry environments. Over time, drought from dry weather can cause an unsettlement in the foundation of a building. A more severe result of rising temperatures in dry environments is wildfires that spread quickly and expansively, causing immaculate damage to any structure in the path. Scientists at the NASA Earth Observatory theorize that the rising temperatures of climate change will also increase the ferocity of thunderstorms. Severe thunderstorms come with manifestations like high winds, flash flooding, lightning strikes, and in some cases, even tornados – all of which will greatly threaten the condition of a real estate investment. Ultimately, the increased risk of physical damage to real estate will lead to increased insurance costs to protect the structure against these natural disasters. The greater the risk and the odds of occurrence, the more costly the insurance policies will be to protect the home as it is more likely of an event. In the unfortunate event that a building is physically damaged as a result of Mother Nature’s conquest, the costs to repair the damage can be monumental, even with insurance.     

Aside from a physical increase in temperature around the globe, climate change also comes with transition risks. These are risks that can affect structure over time, not necessarily the result of one bad storm or single event. Transitional risks most affect the cost of your real estate investment. Overall, climate change can eventually cause a dwindle in property values for a number of reasons. Home policies that combat the effects of climate change are not only inflating as the issues become more prevalent, but organizations are imposing regulations to slow the progression of the change. These regulations are costly to investors and required. Expenses like HOA fees, local codes, and state-wide taxes could expect to be augmented.

If the rising cost of maintaining a rental property becomes greater than the profits, the property would then not be worth the investment. Climate change is an inevitable factor that REIT’s should consider in their future real estate endeavors.   

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4 Small Details that Boost the Value of a Home

It may be a seller’s market, but that does not prohibit some houses from sitting on the market for months because they are missing what potential buyers crave in a new home. Luckily, there are many inexpensive, relatively quick fixes that can help boost the value of your home before you sell.

  1. ‘Smart’ technology

In an age where almost anything can be automated or accessed from a smartphone, household appliances should be no different. With technology constantly changing and updating, large, expensive technological updates may not always be a smart investment. However, there are less expensive, easy to install devices that can provide a facade of a high-tech home. An electronic thermostat or a doorbell with a built-in camera can typically be purchased online, installed by the most novice DIY-er, and can be customized through a smartphone.

  1. Greener grass

The outside of your home serves as a buyer’s first impression and your best chance to entice them to look inside. This is why clean landscaping and a neatly kept lawn is so vital for your home’s curb appeal. A lawn that is freshly mowed and flower beds that are neat and tidy give the illusion of a low maintenance yard – every homeowner’s dream. Furthermore, your neighbor’s lawn can impact the perceived value of the neighborhood as a whole. If they are close enough to your property, quickly trimming your neighbor’s grass for them before a showing can go a long way, and also count as a nice deed between neighbors as well.

  1. A facelift for your fixtures

Fixtures that are used daily are often the first to show signs of aging in your home. Even though they are small, fixtures like light switch panels, bathroom sink faucets, kitchen cabinet handles, and closet door handles can quickly give away the real age of your home. These details are typically inexpensive and easy to fix and don’t require heavy installation. As a bonus, changing handles and faucets can add a unique touch of your own style to an otherwise plain room.

  1. A fresh coat

Whether it is the crown molding in the dining room, the front door, or your master bedroom, paint is one of the easiest ways to bring new life into a room. Currently, light, neutral colors like grays and whites are very popular. Not only do they typically appeal to most any potential buyer’s style, but they also can open up a room. Light colors reflect more natural light, and in turn, can make a room appear larger than it really is. Utilizing natural light is also a great way to save electricity, which buyers will appreciate.

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Using OPM in Real Estate Investment

One of the biggest obstacles that potential real estate investors face is not having the cash capital that it takes to get started. Real Estate is an investment and investments essentially require using money to make more money. One technique in real estate investing is rapidly becoming more popular today, which is the Private Bank Concept or using other people’s money (OPM) to acquire properties.

What is OPM?

OPM, short for Other People’s Money, is when investors borrow money from individual people instead of banks or loan institutions. When utilizing an institution, like a bank, to fund the property, the investor is typically still required to pay a portion of the cost, in most cases a 20% down payment. For those without the means to pay this 20% portion, private lending or OPM is a great way to receive the funds without actually having the capital.  

How does OPM benefit both parties?

It seems bizarre that a private lender would be willing to advance a large sum of money to help someone break into the real estate investment world. However, OPM methods have a benefit to both parties involved. Typically in these scenarios, each investor has an ideal part to play. The initial investor is willing to do the work to receive the highest return on investment (ROI). This could involve finding tenants for a rental property, handling maintenance, and is the point of contact for all transactions involved. The private investor supplying the capital would then likely act as a silent lender – someone who is interested in real estate investment but not in the maintenance involved after the property is acquired.

The loan will have an agreed upon interest rate and date that it must be returned to the lender. In the lender’s case, they would receive their funding back in full, and then interest. To the initial investor who lacked capital, they would receive only a portion of the profits from the property, but without providing any personal capital, only labor. Both parties close the deal with a profit of some amount. Using OPM for multiple properties also enhances the speed at which the investor can close on properties as no bank or mortgage is involved.  

How do I get OPM?

Seeking family or friends who have a healthy sum in their 401k, IRA, or savings is a great place to start. Lenders are more likely to invest in someone that they know. The key to attracting investors is to first gain knowledge on the situation to better sell the deal. A good selling feature to convince someone to break into their retirement plans for funding is that any return profit would not be taxed. After some hard work and ROI build up, you can gain enough capital to invest yourself.

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