Land & Residential Development
Tom is knowledgeable and up to date with municipal and district zoning, building codes, regulations, and legislation. He has first-hand experience with residential construction, subdivision, and development, and can help you find the right property for your next project or dream home.
Purchasing land to build your own home can be an exciting and rewarding experience. Building from the ground allows more freedom and flexibility to design the home and site plan how you want (vs. purchasing resale and adapting existing infrastructure). You can tailor the floor plan, features, fixtures, and finishes to your needs and preferences, which is an appealing concept for most people. Moreover, building a home may be the only option for locations with limited turnover or those with specific needs.
While building a home has advantages, it is also costly, time-consuming, and can be overwhelming if you do not have support or experience.
Financing
A land purchase requires a higher down payment (35-50%+) than a standard home (5%-10%), because of added risk for the lender. Therefore, unless you already own the land, building a house requires a substantial upfront cash investment, in addition to construction costs. The average cost to build a home on Vancouver Island ranges between $400 to $550 + per square foot.
For example, buying a $500,000 vacant lot to build a 2,000 sq/ft home would require $175,000 to $250,000 for a down payment on the land, plus an $800,000 - $1,200,000 builders loan paid in addition to the remaining land mortgage.
Timeline
& Mental Fatigue
Other factors to consider are building timelines and mental fatigue. On average, building a house takes 1-2 years from start to finish. This timeline can vary depending on construction delays, access to trades, municipal inspections and approvals, financing conditions, and more.
If you plan to live on-site during the build period, the temporary placement of a certified camper van or modular home during construction is allowed in most municipalities; however, the maximum occupancy period is typically around 12 months. Therefore, depending on the construction timeline, you may have to budget for temporary accommodation on top of the mortgage and build costs.
While customizing the property is one of the main attractions of building, it involves hundreds of decisions and a substantial time investment, which can be cumbersome over time. Furthermore, you may find yourself making small or significant sacrifices in your design due to budget, timeline, property restrictions, or a range of other uncontrollable factors. Thus, the “dream home” you have envisioned may not be viable due to budget constraints.
Hiring experienced home designers, architects/planners, engineers, contractors, trades, and other professionals to help with design, planning and budgeting will help to mitigate these issues. Depending on your availability, resources, and experience, they may be essential services to include in your budget.
Summary
Purchasing land to build a home has advantages and disadvantages. If you are considering buying land to develop or build a home, contact us first. Tom is happy to share his experiences and have an honest and transparent conversation about the advantages, risks, and estimated costs beforehand so you have a complete picture of what to expect and can decide if it is the right option for you.