how much $$ is saved by buying a lot and building, vs just buying

[Account Closed]

Hello, i was wondering if you typically save money by buying a vacant residential lot, and then paying to put a house on it, vs buying a similar-valued property and a similar-sized lot together? do you save money by buying the lot separately and the putting the house on it?  thanks

[Marco Vigueras]

If building, would you be the general contractor?  A GC would likely charge 15-20% to build for you.  Also, make sure you're buying the lot for lot value.  If you buy it for lot value and GC the project yourself and do a good job and not overbuild for the neighbourhood, you could likely have some instant equity in it when it is complete.  Even if you used a GC, you'll likely come out under what you could sell it for on the market.  Just consider if that is worth it because it will take +/- a year before it is complete and will take a lot more effort than buying something you are happy with already complete.  Also, I agree with the above on the developed cost per sq-ft estimate.  If it's a high end neighbourhood figure on $300/sq-ft to build.

Hope that helps!