I certainly agree with your anology. We are looking to locate more rural but close to conviences within 30 minuites . Of course, so is everyone else right now so its a tough market to buy .

After a 3 1/2 year wait for a building permit to build our third "forever" home, a generation younger and spryer mrs. worthy remains gung ho.

Yours truly would be happier imaginatively renovating a smaller existing house rather than slugging it out for 18 mos in the mud building a 5,800 sf legal two-family for two people.

BTW, your US$70K comes in less than the cost of demolishing the old house on our lot and the excavation for the new build. Your economics are different, but that seems way low equity for a custom build even in palmetto country.

I would not build a home, for a lot of reasons, and I certainly wouldn't do it for a "forever home". I don't believe in that idea, because your wants and needs are going to change a lot in the next 30+ years of your life. Everyone's do, and building now for what you think you're going to want then is a fool's game.

More importantly, building a home is expensive (from the architect's drawings and permits, to the materials and labour), and you really don't know what you're going to get - you only know what you've planned to get. Cost changes, labour problems, unavailable materials etc.

The only exception I might make would be putting up a pre-fab modular home or tiny house as a cottage - nothing custom built.

Having done kitchen and bath renos i’d by an existing house anyday over the stress and headache of building new unless there isn’t anything that meets your needs available…

$70k is not a lot of money considering any bank wants you to put down a minimum of 20%. That means your looking at a house that's only $350,000. Is that actually doable in your neck of the woods on one acre like you'd want. Additionally, you have to consider that if you build, you really need to hold back 15% for contingency. So now you're actually looking at a house starting price of $300,000.

There is a lot to consider. I would probably follow both options as far as I could until it starts costing me money. I'd look for house plans on line. I'd look for available properties in areas of interest. I'd constantly search Zillow for existing properties and go to open houses and contact realtors. I'd visit new nursing facilities and study the features and spaces designed to make aging safer and more comfortable. I say probably but that's sorta what I did, but in my 50's when our son came home from being overseas unscathed and was married to a wonderful devoted woman. Once we no longer worried about him being badly wounded and we needing our home to accommodate his needs, whatever they were, we started thinking just about our own needs. I went to see several homes for sale and took my husband to the best of them. It helped him realize he didn't want to move again unless it was to relocate in a different part of the country. Then I got to work on my own figuring out how to remodel for our needs. He got more involved with that part and I think we both enjoyed it. We figured that if that wasn't possible or at a reasonable price for us, we would go looking again. Then we confirmed the changes that our HOA would have to approve. So far all just costing mostly my time but it was also our time. Once I figured out how to make the renovations work, we got an architect to help and confirm that it all could work. That was the beginning of the spending part. Although we never got to go through the stage our contemporaries did, where we built the big extravaganza to impress somebody, we are in the less than 2,000 ft sq house our contemporaries are now seeking as they are starting to retire. We are somewhat at the beginning of the renovations. I'm not saying you will follow the same path. You are different people in a different part of the country. I just think it will help you to investigate all your options as far as you can without spending anything. The process will help you know what you want in addition to hopefully being enjoyable and helping you to know each other. Good luck!

I've built. It takes time and effort to both save a lot and increase the quality beyond builder grade you get buying an existing home. SC has some areas west over by Georgia with plenty of lots waiting for builds. Prices for materials and labor are falling. By next year they'll be even better. If your goal is time sensitive to this year, you'll pay a lot more to get anything more than builder grade for your build. And just getting a bit better will still require major research and in person quality control effort. Drop the timeline for a chance at success. Start by breaking the build into segments based on the different subs who do the work.

We (Mrs. Architectrunnerguy and I) have designed, built and completely GC'ed three houses over the past 35 years and amazingly, we're still happily married!

Ok, all seriousness aside, building is a HUGE endeavor and, like in the middle of a long road race, sometimes in the middle of a build one wonders what they were thinking, but it's an adventure and what is life without adventures? Often life really begins at the edge of our comfort zone.

And when you're finished, there's a sense of great accomplishment because any owner is a large part of any build even with a GC involved. And as an architect I've found it's a whole lot different when I'm spending my own money! So it's kept me grounded.

But whatever you decide, the best of luck!!

There is no right answer. But generally, you are not in the financial condition to be building because your cash position is too low. To build, you should probably have land owned outright and 20% of expected build costs in cash. That would mean essentially free land even for a modest house. Good luck predicting material and labor costs 12 months from now.

The concept of a forever house is generally a mistake. You should generally wipe the concept from your mind and take the advice of your elders.

But, just to keep one very tangible thing open - if you have grandchildren, you will likely want to live near them. Your kids are unlikely to find a job and a spouse in rural SC. I mean, they might or may never have children. But it isn't something you can count on.

The concept of a forever house is generally a mistake. You should generally wipe the concept from your mind and take the advice of your elders.

I agree but there's not a thing in the world wrong with thinking it is. So things change down the road for what ever reason. So what? Then we move. No one can predict the future but when planning or looking for a house, thinking long term, or VERY long term, is not the big sin it's often painted as here.

Building will cost significantly more than buying an existing home.  In general,  it will be at least 15% more for building a comparable home.  But it is brand new and you get to pick all the details.  

As others have said,  you will need a lot more cash on hand to build.  You will need to own the land first,  then have at least 20% of the construction cost as a down payment,  plus extra cash for overages in labor,  materials,  and upgrades.  I would recommend having at least 30% of the total build cost in cash so that you have some buffer for overages.  Since you're rural,  I would start with finding out how much a well and septic system is.  Around here,  a well alone can cost over $60k to drill.

oooh, don't forget you'll also need the cost of living somewhere while you're paying for your house to be built.

Is the $70k the total sum of what you have on hand? You don’t have equity in your current home?

Are you place-bound to a particular area because of your jobs? Does the married child live in this same area?

I don’t know about South Carolina, but here in Missouri it’s extremely difficult to find a rural one-acre parcel for sale. Unless you have a relative who would be willing to subdivide. Once in a while, there are 20-50 acre parcels for sale but they are few and far between and $$$$$.

I always think it’s interesting on these threads when everyone says building will cost more. When we built our home it cost less than comps in the area and as soon as we were done we had it appraised and it was already worth about $200k more than our all in expenses. Doesn’t really matter as we have no intentions of leaving soon. The forever home debate is also always on here with people chastising posters for wanting a forever home. Who cares if someone wants a home to live in long term? I know we will move out of this house but I’m also certain we will live in it a good long time before that. For us we couldn’t find what we wanted in a ready built home. So we made it ourselves. It totally depends on your needs and wants and budget.

" When we built our home it cost less than comps in the area "

When and where was that? It makes a difference. I'm sure it could cost less, but I think the odds of it costing more are greater than the odds of it costing less. And that's just the financial cost, not counting the opportunity cost and the time.

" The forever home debate is also always on here with people chastising posters for wanting a forever home. Who cares if someone wants a home to live in long term? "

I don't care if people have fantasies of living happily in their home forever - but I will argue against investing more time and money than you otherwise would because you think it will be your home forever.

Of course where it is matters. But blanket statements that undermine posters intents or motivations are foolish and condescending.

We built in Vancouver BC in 2017/18.

Many people do in fact live in forever homes and love them. It’s their home. If they want to make it special why judge them?

Many people do in fact live in forever homes and love them. It’s their home. If they want to make it special why judge them?

When my ex and I moved into our Victorian house back in 1993, he told me that the only way he was leaving was feet first in a box. That it was his forever home. Um nope. Thankfully he is still alive (not with me!) but living clear across the country from that house.

Well my step dad has been living in his home for over 50 years now with no end in sight. Everyone’s experiences are different and folks here should stop suggesting there is only one way to do things

Thanks for all the replies and points of view. I am very confident this will be a very long term home if not a forever home. My wife hates change and our jobs, while could produce a relocation, it is not required. We have been together for 15 years, and have known each other since we were 16 years old (30 years). I cant speak for her, but i wouldn't want to be with anyone else or live without her.

Also, I have a couple friends (golfing buddies, etc) that work in custom home building as contractors. I spoke to one the other day, and he has a recommended general contractor for us to use that he highly recommends.

Im also open to certain building lots in subdivisons that dont have houses right on top of each other, but would be 1/2 acre or so. I’d also point out that we are looking at build plans in the 2000 sq ft and 2 or 3 bedroom arena. Honestly, we probably are more concerned with outdoor space.

I know its possible to use land as equity in a home build, but would like some advice from people that have done it.

Also, has anyone used the FHA construction loan that doesnt require 20% down payment?

" Many people do in fact live in forever homes and love them. It’s their home. If they want to make it special why judge them? "

Well, anyone who posts here is open to getting advice, and that's what I give them - my advice. And my advice is to not to spend more on a house because you think it will be your "forever home" - spend more if you want to and are able to, but don't spend it because you think you'll be there forever. Maybe you will, maybe you won't.

Yes, building a home in 2017/18 is a hugely different marketplace since Covid supply-chain issues.

And anyone who posts here can get advice from those of us who think building what you hope is a forever home is also totally fine. Also that it doesn’t need to be a waste of money and cost more.

I completely disagree with not attempting to make choices based on a 'forever' home. The 'forever' outlook allows you to evaluate choices beyond builder grade. Beyond the current limited lifespan offered by some Harvard Business and the like trained corporate officers as commercially appropriate.

An example is a well pump. The original Red Jacket pump for this build lasted 30 years. It was replaced with another Red Jacket pump. Unfortunately, during the first time period Franklin bought Red Jacket and other domestic manufacturers. The new pump lasted 7 years. The electric motor has not been changed. Only the multichambered pump segment partually failed. The servicing industry has recognized this engineering for failure. They refuse to install Franklin products. They'll only use a Danish product with the traditional life. Grundfos. Sub-Zero vs Whirlpool refrigeration with their 1 year warranty is another example.

@Architectrunnerguy "Often life really begins at the edge of our comfort zone." I love this! So true.

" The 'forever' outlook allows you to evaluate choices beyond builder grade. "

Lots of different outlooks allow you to evaluate choices beyond builder grade, LOL. Simply the desire not to buy disposal products, for instance.

@chrisr4419 - The answer to cash problem is more money, not less down payment. As someone mentioned above, there are actually three pools of money required in a home loan (1) the down payment, which is typically 20% of appraisal, (2) the loan amount, which is typically 80% of appraisal, and usually (3) the appraisal shortfall, which is the difference between the cost to build and the appraisal.

Few houses will appraise for their cost to build and because of that you don't have enough cash to build right now even using a 10% down or even a 5% down loan. The problem isn't only the down payment it is the appraisal shortfall that you will have to cover at 100% of cost.

Having said that, designing and building a home takes some time and you all have quite a bit of income. If you really want to build then I would recommend take your time and look for the perfect lot, while saving. Then design a great house for that lot, while saving.

With your income, you should be able to easily save another $100,000 before you actually need it, even then that is going to be a pretty tight build so don't include a lot of allowances in your build. Find actual fixtures, flooring, cabinets, etc. that you can be happy with and ensure your bid includes those items.

I think the forever home debate is a bit moot in this situation, even with $170,000 cash to put towards land, design, and build, you are still going to have to defer to standard marketable selections. You are not going to get a $100,000 custom kitchen on that budget or many other features that are uniquely your desires for a forever home.

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ETA: Plenty of people spend their entire lives in a house, it isn't rare, it is just rural. Go to any rural community and a significant number of people will live in the same house their entire life. Often it is house they built on family land, or it was their parent's house.

ETA2: This is not saying that the OP can save $100,000 in six months. I literally said "take your time" as a necessary component to saving. The build process is likely going to be a couple of years.

I agree with everyone who says you need much more cash to start off with. Maybe reduce the luxuries now that you have a great goal.

: )

I am building right now, and had lots of equity, a fully paid off house. I am building an upgrade house on acreage in a cheaper area. I thought I could get through this fully paid, but ended up back into another mortgage. I am happy about our new place and new life, but not going back into debt for it. We will be ok, and not financially ruined, but I can see how others with limited equity could go bankrupt. It really does cost more than you think to build new.

Lot of assumptions about OP..... said 70k saved to make this happen. OP may not be including other savings, such as retirement, college funds, or even a rainy day fund. We don't know how long ago previous marriages ended, that's expensive, or how long their combined income has been 210k. Maybe they both just got big raises. Or finished residency or law school. Heavens.

Debating a "forever" home concept is not chastising - but it might be interpreted differently by different people. I built a "not-forever" home and I can assure you that it is not builder grade. It is also not wheelchair accessible.

It is not very common to just graduate from professional school in your mid 40's - and that probably would have been stated if true for the OP.

I may not be as huge into savings as some, but you do have to look at the total cash position here and mostly conclude that it isn't enough.

Building is a gamble in some ways - more than buying existing. You could start building now, and when finished, the resale market may have tanked 20% because interest rates are 8% - which you roll your construction loan into. So then you paid 20+% over existing and got a higher interest rate. Win-win!

You always make assumptions on a forum. If a truly accurate financial advice was desired - we should have bank statements, W-2s, and current budget. But we don't. Doesn't mean we can't guess that the cash position is really not ideal for building.

Is $210K income gross income or take-home pay (minus federal tax, state tax, Medicare/SSN tax, etc.)? If $210K is pre-tax, I don't see how you can save $100K of that in a year for a house (not retirement account). Say 1/3 of income goes to tax -- take-home pay is $140K; if maxing out on 401K, that will be $45K for 2 people. Take-home pay now goes down to $95K before any expenses. Subtract housing, food, gas, insurance, utilities, clothes, etc. and you are nowhere near $100K of cash savings.

@RTHawk - I am not sure that anyone said anything about a year. The process of finding a lot, designing a home, finding a builder, getting a loan, and getting started often takes longer than a year. Add to that the length of the build process itself and you can easily be three years out before you need to actually have the cash in hand.

The $22,500 cap on 401k deferrals is pretax income (which is the reason it is called a deferral and that includes the employer portion or match). With a combined salary of $210,000 it is very likely that there is some employer contribution to retirement. Furthermore, 21% is pretty high for retirement savings, 15% is much more reasonable and likely.

So a more realistic calculation of retirement savings would be a 5% employer match and a 10% pre-tax employee contribution which would be about $14,000. Which is a far cry from the $45,000 that you noted.

The OP is likely bringing home about $120,000 after taxes, insurance, retirement, etc. and two people in a modest rental in South Carolina could likely live on $40,000 take home (since about half of South Carolina does). If the process takes more than 18 months (which it will) they are fine. I was actually thinking the entire process will take closer to two or three years as that has been my experience.

It all depends upon your tolerences. i have never had the slightist interest in building a home from scratch. Some of my friends have done it a few times, they enjoy the process. I know I wouldn’t. I’ve purchased several homes over the years, I buy for location & remodel ( if needed ) to suit my taste / needs.

@bry911 I agree that 3 years is doable. And I always max out my 401K (if I remember to change when the limit increases) so not outside the realm of possibility for some people.

RT Hawk, you are correct in your assumptions. The 210K is Gross income .

Health insurance on 2 children, myself and wife is $700/month, insurance on 4 cars $400+/month (Thanks to stepdaughters 2 accident claims), Both myself and wife allocate 10% payroll to retirement fund, high income taxes, life insurance, etc etc . Cost of living is insanely high when you are paying for everything out of pocket. The only way we could save anthing close to 100K in a year, would be to buy a piece of land, put a camper on it and build later . We actuallly considered this and know someone that did exactly that. Granted, one stepson is going in the navy in 6 months, stepdaughter is finishing sophmore year of college. So, the extra financial burden is getting lighter . Kids are expensive . Grocery bill alone during summer when both kids are home is enough to give me ulcers .

I came to the forum to get some real world advice/experiences on building a home and money required. Honestly, I'm less inclined to build now . It seems like a huge hassle and we are both in our mid 40's. This would be very different scenario if we were 15 years younger . Both went through awful divorces back then and we were both starting over .

My wife is fine with buying existing home- Im the dreamer. I have patience and planning, she doesnt. She wants a house this year. The 70K DP towards a 350K house in upstate South Carolina gives you some options and the existing home prices seem to be cooling off somewhat here . Honestly, I refused to pay some of the asking prices last year and couldnt belive how many were .

New home construction, however, is CRAZY still . I have friends working 7 day work weeks just to keep up . They say its mostly out of state transplants driving the new home constructions in our area. In turn, land prices are still very high. Especially anything build ready w/ utilities in place .

A quick note on build vs. buy costs...

How much you pay for something is very different than how must something costs and the two shouldn't be so quickly conflated. While you pay more for building a home than you do for buying an existing home, that doesn't mean that an existing home will cost you less. It just means you are paying less for it initially.

Just for example, many people buy a home planning on remodeling the bathroom, kitchen, etc. Most existing homes also have systems that are either inefficient or will need replacing much sooner than new homes. Both of those things require outlays of cash that a new home may defer for a much longer time.

Also, people tend to stay in homes they built for longer than they stay in homes they buy and transaction costs can be significant. Between realtor fees, moving fees, and the inevitable outlays for personal property to transition into a new home, you can easily destroy more than 10% of a home's equity.

@chrisr4419 - Remember to consider more than just the initial price of a place as you are looking. Consider all the things you are settling for and make sure that you will be happy with those things for an appropriate period. However, also consider the burden and cost of living somewhere else as you go through the build process. It may still be better to buy a house that you plan on leaving in five years when you build a different home. However, it can be a godsend to figure that out early in your ownership.

Good advice bry

We were recently in your position, although I'm guessing our area is a little higher cost of living than yours. But our experience was that the custom designed home (we went to bid in late 2020) would have cost us about 30% more than the production builder home we eventually ended up building, just based on the bid (and what you hear mostly from people who have built over the past few years is that their costs were higher than they initially budgeted). At the same time, we also looked at a few existing homes that possibly would have worked, and in general, those were even less (maybe 10-20% less than the production built home). So, it isn't an apples to apples comparison - building, and building CUSTOM, have an even higher premium than the market "premium" in general. And that's not factoring in the things existing homes have that new houses don't - like window treatments, landscaping, fences, decks...all of those things are EXPENSIVE and do not really get reflected in an existing home's price - at least not at a 1:1 ratio.

I'm sure there are those who are able to build for less than they can buy, but they're doing a lot of it themselves and are using builder grade materials to do it - at least today. Maybe if the market crashes again, custom builds will get more comparable.

I sympathize - I loved our custom design and I really wanted to build it. DH probably prefers the house we have now. Maybe in retirement we can build custom, but that house would look much different than the one we designed in 2020.

Whether this is financially doable for you is dependent on a number of factors - biggest being what custom homes cost in your area...but I would say it would probably be a stretch.

Maybe the thing to do is to buy a "starter" house for now, with the intention of selling in 5-10 years. Then you can build your "dream" house when kids are definitely out on their own, your finances are more secure, etc. And then you can build that forever house with aging in place factored in and you'll have the equity in your "starter" house.

That's basically what we did. We too are divorcees and found one another later in life. Both of us wound up selling our houses which we had to split with our exes. Then we rented for several years before buying a condo in our preferred area. We lived there for 6 years, found a small plot of land walking distance to downtown (our preference) and near theater, music, etc, and built a house that will live well for us as we aging in place. It has exactly what WE need and nothing else. Once we started our custom build, we sold our condo and rented until the house was finished.

Throwing another idea out there - you could consider a renovation loan for an existing house. While you won't get all of the customization that comes with designing and building your own house from scratch, you do get a lot of customization available. And you don't need to renovate the whole house with a renovation loan, for example, you could renovate the main living spaces (kitchen, master bed and bath, living room), maybe new mechanical systems/roofing/siding, then do other projects as you go.

We are a couple weeks from breaking ground on a custom home build. We did a 2 in 1 lot/build close. When we closed, we started paying interest on the amount of the land. As the builder starts to take draws, the drawn amount gets added to the principal, and we pay interest on that amount. It only converts to a full mortgage once the certificate of occupancy is issued. So the financial burden during construction for us isn't too bad.

I think this is pretty standard for construction loans, but YMMV.

We chose to build because we want to be on the waterfront, and within 30 minutes of Baltimore, so that left us with pretty limited housing stock to choose from. Even looking at houses that sold over the last several years, there were very few that fit our criteria of neighborhood, yard size, house layout, etc.

@stm25rs the financial burden of a construction loan really depends on how long your build lasts and how big the initial draws are. Our build was 6 months long, which is pretty short. Our builder did 3 draws. Our last payments were very close to a full mortgage payment (not to mention, construction loans are typically a higher interest rate than a mortgage as well). I could imagine that a long build with big draws in the beginning would end up being a pretty big financial commitment, especially if you are paying for alternative housing at the same time (as we did). All of those payments are basically sunk costs as well, since you are not paying down the principal.