By Adlene Hanna
After years of hard work and saving up, you finally have enough money to buy your first house. But the fundamental question is – should you buy or build a home?
For those living in the city, the answer is easy as it can be pricey to purchase land in urban areas, especially in the Klang Valley.
For those who have empty land to their name, either through inheritance or your own purchase, it may be a good idea to build your own dream home.
Ultimately it depends on the circumstances you find yourself in. There are many factors to consider, ranging from legal and financial to practical.
What are the draws of building your own home?
The most appealing part of building your own home is that you can build it exactly the way you want it.
From permanent fixtures like doorknobs and sinks, to easily interchangeable parts such as paint colour, everything will be personalised exactly to your lifestyle and tastes.
Since new homes must be built according to the latest building codes and regulations, you will not need to worry about huge repair works or heavy maintenance issues for the first few years.
And since you get to choose every single factor – choose the most up-to-date technologies that will last you for a long time. If you’re lucky, your contractor may offer you a limited warranty should something break.
Additionally, you can choose the most energy-efficient systems and materials, which means lower electricity bills and bigger savings in the long run. So, although it might cost a little more during construction, you’re actually investing for the future.
Building a new house is probably not the best choice for those relocating for a new job or those looking to move in immediately, as the process can be tedious and take at least a year to complete.
Firstly, assemble a solid team of professionals to help you through the process. The key game players that you will need in your house building journey are architects, engineers, lawyers, surveyors, and builders.
Needless to say, there will be a lot of planning and applications to settle. Some of the documentation in the endless list of paperwork include blueprints, besides applying for your loan and permits.
Your new property is going to serve you for a very long time, so your plans must be very detailed.
Not only do they need to follow all the relevant building and zoning regulations, they also need to deliver practical considerations such as lighting, plumbing and most importantly, safety.
Your architect will help you create a blueprint that will bring your ideas to life, while making sure you don’t end up breaking any local rules.
Now that you have your blueprint and can estimate the total cost needed, it is time to secure a loan.
There are two types of loans to consider when appraising financing for a home construction, namely land loan and land & construction loan.
A land loan only covers the purchase of the plot of land, while a land and construction loan offers financing for both the construction and the land purchase.
The construction element of the latter covers everything from construction costs to permit payments.
The reason you’ll need to obtain financing before applying for permits is because like all administration processes, it’s going to cost you some money.
Requirements and permits may vary slightly according to your location, but in general, there are four different applications that you’ll need to make, namely:
- Application for land ownership and transfer (Local Authority Land Office/Department of Director General of Lands and Mines);
- Application for planning permission (Local Authorities Planning Department);
- Application for building plans (Local Authorities Building Department) and
- Application for road and drainage plan, and earthworks plan (Local Authorities Engineering Department)
The actual construction
Now that you have gotten the tedious planning and paperwork over with, it’s time to set up the construction site.
You will need to set up a designated storage area for construction materials and tools; prepare a place for construction workers to rest, as well as a space for them to relieve themselves; demolish any unwanted buildings on site in addition to clearing away debris and foliage that may be in the way; and lastly have the land graded and levelled to prepare it for construction.
Remember to be very clear with your contractors during this stage, as you don’t want to incur unexpected additional costs like renting portable toilets or extra charges for demolition.
Based on your architectural and structural plans, you should already know the types of materials you will need, as well as their costs. However, this is another stage where you may accidentally bear extra costs as prices could have surged, especially if the loan and permit applications took longer than expected.
Another point to remember is that if you’re importing materials, the prices depend on currency conversion, and could also have fluctuated since your original budgeting.
Communicating with your contractors is key, so that you know where and when they will be getting their supply of materials.