Makes me wonder if it would be economically advantageous to buy something like this https://www.menards.com/main/building-materials/books-buildi... and then spend some time (how long?) putting it together, instead of working to earn money to take out a mortgage to buy more-or-less the exact same thing.
Where I live it looks like someone lost their home (I guess through job loss etc) before it was finished. Right when framing would've started. The lumber was already delivered including all the roof trusses. The only thing actually standing was the concrete basement walls, I-beams and flooring. Those parts were done quite fast as well.
Then, for a very long time nothing happened. The people I saw there once, looking at everything I never saw again.
But then, couple months later, always in the evenings, a single guy could be seen building walls on the floor and putting them up one by one and soon enough there was Typar looking at us. The only other people I saw there helping was one time when he was putting up the roof trusses. He did all the roofing (plywood and roof tiles) himself. The last roof tiles actually went on literally a day before the first snow.
I bet he worked construction for a living anyway but it shows that it is definitely possible solo. Sure, a framing crew puts up a wall in no time but with a few simple tricks anyone can put up a wall in sections all by themselves.
If you’re not using a loan to finance the construction or land purchase, it’ll definitely be economically advantageous because you’re not paying all the interest on the mortgage. At current interest rates you’d pay over $400k in interest on a $500k 30 year 20% down mortgage. Even at 3% you’d still pay over $200k in interest.
Paying interest is horrible. Unless your investments are expected to do better than the interest rate. No way I would pull money out of the stock market to pay off my 2.25% mortgage.
It doesn’t need to beat the stock market to be a net win.
Edit: Suppose you had a 500k investment paying ~5% you could sell to avoid a 500k mortgage at 6% that seems like a good idea. Unless you’ve got a high paying job so you could get a sweet home mortgage tax deduction.
Similarly, a dividend paying stock may have returns of 5% but if you’re paying capital gains when selling that stock you’re also getting 5% of money that would disappear when sold. IE If you would keep 500k on sale a 550k investment paying 5%, it’s effectively paying you 5.5% of 500k.
The cost of new construction is mostly labor. It would be cheaper to purchase a modular home and take advantage of production line efficiencies. With some forethought you can start small and plan for future expansion.
This is the same conclusion I came to when I tried to think about creative solutions to reduce costs.
(Things like factory produced or assembled pieces like modular homes and sandwich panels, on-site earth bricks, more glass to reduce assembly time per square meter, etc.)
But indeed, every saving was counterbalanced by an additional cost added somewhere else.
