Buying versus Buidling part 2

Recently on a punaweb topic the discussion again come up about buying versus building. At this time, it is a really hard question to answer. Much will depend on what you want to do, and how you want to accomplish it. A few years ago as pricing for homes was skyrocketing, building in Puna made the most sense.

Some of the questions to ask yourself when trying to decide are:

Is this an investment property that you will rent out for a number of years, then sell?
Is this some where you might eventually live in but not right now?
Or is this going to be your dream house?
Can you afford to build at $125/SF or more? This SF price should include all space, not just living spaces.
Can you buy lot, then start building as you have cash and when done have no mortgage?
Do you intend to participate in the building? Do you have the skills necessary?

Lets take at one item: an investment property to sell at a later date. You may find in the current market a great deal on some else's loss. Can it be rented for the market rate? What will be your return then after PITI, and maintenance, tax deductions? If you build, is a kit house that goes up quick with "builder" grade appointments in the rental market range? The market wont bear many $2500 a month rentals in Puna. Look at the classifieds - what is the median rental range right now? What time frame can a builder put up the house in? (In this case, time really is money - the longer it takes to build, the longer you wont have tenants in it.) But if you are paying totally cash as you build, you also when done wont have a mortgage to worry about and then wont worry as much about vacancy.

On the other hand, if this is your dream house, do you have the patience and money to see it through while building? Is your marriage good enough to withstand the stress and strain of building together? This is a big cause of divorces right behind death of a parent or child, and moving but if you think about it, building your dream house is moving. Again, based on the current real estate market, is there a home that is "almost" your dream home that remodeling may be cheaper?

This debate continues to be the chicken and the egg argument - which comes first? It really depends a lot on you, and your family, your finances, and most importantly your level of patience.