Which is better? Selling the land or building a house then sell?

Question

I still can't get this idea out of my head. My mother owns land and has had it appraised. It is ready to be built on and I feel like it would be more profitable to have a home built and then selling the home. I

What do you guys think ?

There are multiple homes being built in the area, most could be considered mansion. My grandparents and Aunt have built homes already on the part of land they own, so I feel like we could have one built and sell it for more than what selling the land would bring?

Can someone shed some light on this ?

FYI the appraisal was for almost 140,000 for about 4.5 acres.

Thomas S. · Answer

You would need to find out what the appraised values of your grandparents and aunts property with home would sell for and get a quote on the building of a similar home on your land would cost.

There are many factors to be considered in building not the least of which are money to build, experience and stress tolerance. Building a home is a major undertaking that for many would simply not be worth the gains.

It is entirely dependant on the location but something to keep in mind the greatest profit will come from building and occupying the property as a primary residence first before selling.

Trevor S Foster · Answer

Do you think it'll be smarter to get the land under a assignment contact & find a buyer?

JD Martin · Answer

Depends how good you are as a GC. If you have to hire a GC, you're probably not going to exceed the margin you would have had if you had just sold the land raw. Building a profitable house depends (aside from the local market) largely on your ability to extract maximum value out of what you've built. Generally that means hiring all the subs, sourcing much of the material, arranging inspections, etc. You also need a successful home design for your area and a good broker. There's a lot of moving parts.

FWIW, I lost my ass on a similar venture at the end of the 1990s. I got great pricing on a lot of work and did a lot of work myself and still lost my ass. A lot of things outside my control conspired against me - housing glut, local market, etc - but I also spent money in areas that didn't make any money. My inexperience as a GC was a killer.

Trevor S Foster · Answer

Thanks for that info. My mom is on the side of selling it. I've convinced her to atleast let me see if there's a better more profitable way to use the land before she sells it.

Which is better? Selling the land or building a house then sell?

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