The decision to buy or build a home remains a complex one in 2024, particularly in Malaysia's unique housing market. Although predictions of a cooling housing market have somewhat materialized, the reality is more nuanced. High costs and interest rates are deterring many potential buyers, while builders are grappling with rising construction costs that have outpaced inflation. According to a recent Forbes report, the average cost of constructing a new house is around $329,000 (approximately RM1.4 million), excluding land costs.
We can certainly assist you in crunching the numbers. However, a true "dream home" encompasses more than just financial considerations, especially if you envision living there into your retirement years. Here are three critical questions to discuss with your family to help clarify your vision of a dream home and how this journey could impact your Return on Life (ROL).
1. What are our non-negotiables?
While not everyone needs a swimming pool in their backyard, the time and money you invest in your new home should yield a satisfactory ROL. Comfort, recreation, and convenience are essential aspects to consider. You might find an existing home that ticks most of your boxes. However, if it lacks sufficient closet space or that extra shower in the downstairs bathroom you've always wanted, these issues can lead to dissatisfaction and additional expenses down the line.
If you're open to the challenges of building a new home (more on this below), the benefit is that you can customize every aspect of your living space. Whether it's a dedicated home office for remote work, extra bedrooms for a growing family, or even that dream pool, building allows you to tailor your home to your exact specifications.
2. How much hassle can we afford?
Generally, moving into an existing home is quicker and less complicated. However, the process still involves several complex steps, especially if you're simultaneously selling your current home. A proficient real estate agent can help you navigate these challenges.
On the other hand, building a new home requires purchasing land, which may involve working with real estate agents and lenders. You'll also need to collaborate closely with architects and contractors, making numerous decisions about every detail of your new home. This can be a time-consuming process, potentially akin to taking on a second job. For a busy family, this might be too much to manage.
3. Where does our dream home fit into our family's $Lifeline?
The timing of your move is as crucial as the time and effort you're investing in your next home. For instance, if your children are nearing college age, you might not want to spend this valuable family time dealing with the stresses of building a new home. Conversely, if your current home meets most of your needs, you might opt to live with its imperfections while saving up and refining your plans.
Reviewing your $Lifeline—a comprehensive overview of your financial goals and life transitions—can help you weigh these trade-offs. We invite you to discuss with us the ROL you're currently receiving from your home and how you can achieve a boost by making your dream home a reality.
Whether you choose to buy or build, making an informed decision can significantly enhance your quality of life. Let's explore your options and find the best path forward for you and your family.
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