Cost of building - pursue or give up

mike_2009

I'm taking a step back from pursuing my dream of building a house to check in for a minute to make sure I'm heading the right direction. I bought a house 3 years ago finally, I'm 50 and want to develop a better house in the side garden and sell my own (split the site).
Got planning, went to tender and prices were 300/400/400 in the responses. New house valued 350 on open market. Final build cost including VAT, services, contributions, fees, bank contingency etc over 500. Bank only offers 80% of lower so there's a big gap. I've only 3 years of equity so I've a few choices:

• wait a few years, build up more equity until I can afford a builder led project
• build via direct labour to match 350 budget with basic finish, upgrade over time
• give up on the dream, do a deep retrofit instead where I am

What I was thinking last night is am I mad considering building a house for over 500K and that doesn't even factor in the land value. I plan to live in it until I die but is anything worth that cost? I'm paying into a very expensive house when I should be paying into a pension more. That 200K + gap buys a lot of gas and electricity. It makes no sense from an ROI perspective. The bank is going to start looking at my age in a new way shortly too. My job could change too.

Direct Labour makes sense if delivered at the market price, I've crunched the numbers but finding trades and someone willing to take that risk with me & sign the paperwork is unlikely.

I live in a poorly built 22 year old house, typical for it's time. It will never perform as well as a near passive build but I have to ask the question is the dream worth the cost. Is perfect the enemy of good enough?

If you can't build a house for less than the market value, what's gone wrong with this country?! I'm Dublin based so maybe it's time to sell up and look elsewhere.

mikehn

You have a site with planning, flog it and do the retrofit on the house from proceeds, getting a mortgage at 50 will gobble up a lot of your disposable income. Life is short enough to be taking on unnecessary expense. Just my opinion for what its worth.

DOCARCH

I'd suggest that going direct labour is probably not going to save you E150K without very significant time input by you.

I'd sort have to agree with mikehn's suggestion! Most existing houses can be retrofitted to a high standard.

Gumbo

How much is the site worth?
Where are you based?

After you factor in capital gains tax, will the profit be enough to make your existing house upgraded?

Casati

What size/ spec is the house your planning to build?