There's no truly wrong answer.
I can tell you that my wife and I are currently renting a ridiculously cramped, inefficient mobile home about 20 minutes away from our property. We are hustling to get the utilities in so that we can haul up a trailer (cheap/free if possible, but even new trailers cost less than our rent, so we'll go that way if we have to) and get to living on the property as soon as humanly possible. Couple of reasons for this:
- We bought the land because it's awesome. Living on it is the goal, even if it's in a mobile home while we build.
- Even living 20 minutes away, it is a pretty big time committment to go up to the land to work on it. I generally need half a day to make it worth my while to go up there.
- We have yet to involve a bank (but have a loan from my parents for about half of the land--and have saved enough to nearly pay them back, or build the house first and then pay them back), so building with cash is mostly a function of how fast we can make that cash, and how much of the work we can do ourselves--which is largely dependent upon our ability to get hours in on the project.
- Once the house starts going up, there's a lot of smaller jobs that will be easy enough to get done before breakfast, after dinner, etc… If it's a 150 foot walk away, I tend to get a lot more done.
- Once the house is built, we will probably build a guest cabin. The trailer will provide a lot of things that will go into the cabin (like a small heater, stove, etc…) if we want to part it out, or we can sell it to fund the cabin depending on how much we could get for it.
- It's REALLY nice to get my firewood without the need for a truck ride to retrieve it.
That's the thought process we used. If we owned a place 20 minutes from our property, we'd probably stay in it and build with cash. That way, you avoid paying rent, and can get some equity back when you sell the house eventually. Building with cash can be slower to get the house up, but you'll pay it off faster.
Like you are likely figuring out from the other answers, there's no right or wrong answer. The right answer is the one that gets you into a house without the burden of a massive mortgage.
Dan
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