I am planning on hopefully purchasing a house in Ottawa with the intent of a long term investment. Here is my plan: purchase a very old run down house on a large piece of land, and use that as a base to build an attachment....but the attachment will really be building a new house.
I would rather buy land and build, however, from everything I have read.... that needs major capital. You have to buy the land in cash, and then finance 1/3 of the build yourself (if I am not mistaken).
What I am planning is a work around. I am instead buying a very run down old house (that is VERY small....a bungalow with 2 bedrooms and a tiny living room and kitchen and 1 bath and thats it. ) which is on a large piece of land (about 10,000 square feet!). I would like to build the house around it (maybe make the existing space into the future family room / dining area or something? And add on to it.
However before I go forward with this I want to make sure the build is doable. From my research, a not 'luxurious' but still pretty nice house would cost roughly $200 per square feet. Is this correct? I would appreciate hearing from builders (and others) experience for how much an 'addition' of such magnitude (really its a house being built) would cost in the Ottawa area? What goes into the prices? How much would a top of the line luxury home cost? How much would a mid range with a few nice extras cost?
The farther out of the City you want to go the cheaper it would be to build. I have been a Period Restoration Specialist for over 20 years ( Restoring Old homes ). My step son presently is building ( Brand new build )
including 1.6 acres of land for approx. $27K. Had 75% cash and is paying approx. $ 275K to have a nice 1100 sq.ft. house built. He is only 23years old, is single and only makes about $ 23. per hour. The house is approx. 35 min. south of Ottawa however. So yes this can be done. Shop around look at builder on BBB and word of mouth.
Although it is true that buying a property is easier to purchase when there is a home already present, but you need to ensure that it is considered "livable" which typically means your also paying more for that property.
The rule for buying land typically is that you require 50% of the lands value as a deposit in order to mortgage the remaining. Also this depends on credit etc.
As for the mortgage to build. We have third party lenders who would lend the construction funds required to construct the home, which upon completion would be appraised by a bank and mortgaged at a lower value. Typically a construction loan is 6%-8% because it is a short term loan.
In regards to the cost of construction of a new home, it is safe to budget $200-$250 per square foot for a finished product, including utility connects and sewage.
Some other fees to consider: *approx*
-Architectural : $5,000
- survey: $1,100
- permit fees: they vary
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