Build new or Buy old?

To build new or buy old is a GOOOOOD question.

That has an easy answer. In short. A deal is good if you can make an 8% return above whatever you are paying in interest. If you manage to reach these levels, investors will put 100% of the cash in and you can pay the investors of using the income your investments provide.

This whole post is similar to a video I made. And a document I made. You can find them if your scroll down THIS PAGE. Look for “BYGGA NYTT“.

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The question was, when should you build a new house and when should you buy an old house. The answer is, build when the cost of new is less than 10% more expensive than buying old.

The cost of building a place is simple to find out. Call your county (din kommun) and ask how big of a house you can build on X lot. Ask how many stories, how many apartments and how many square feet. Once you know. You have a sq. ft. cost of buildable sq. ft.

Next step. Call builders. 10 of them. Ask how much they think it will cost to build what you want to build per sq. ft.

When you know how much what you want to build will cost per sq. ft., then find out how much rents are per sq. ft. You do this by looking at Google or by calling other property owners and asking them what they charge.

When you know the cost of building compared to the rents per sq.ft. you can estimate your return.

Simple, isn’t it?

Next step. Compare that number to an investment in an existing place that is for sale. Will you get a better return on a new construction or the existing place? Remember that a new built place is worth 10% more in the reduced headache that comes with dealing with older buildings.