I had a friend a while ago who had the block of land with a shed fitted out to live in. To the best of my knowledge the house never got built. The last I spoke with her they had fitted the shed out more to fit the now 3 children they had had since moving into the shed.
I think the shed could work as long as you have a clear set of goals as far as when things will be built/ready.
However, hearing the difference between the 2 property's.... I think maybe your DH is right & the established house isn't the right choice for what you both want.
Maybe keep looking for something that has the things you want to build but has the older farm house you also want.
Why do you want an old house? IMO old is not intrinsically better than new. Lots of old houses have the character features removed and if they don't the amount of renovation they need often ends up costing almost as much as building especially if there are issues with foundations, wiring etc. Retrofitting energy efficient fittings to an old house costs a great deal more than installing them as you build especially if you build with a solar passive design etc. Most old houses are built with a very different lifestyle in mind than our current lifestyles - ie kitchens tend to be shut away from the rest of the house isolating anyone who is cooking. Bathrooms are smaller and laundries are an afterthought. Making an old house suit modern sensibilities is not an easy undertaking.
Many new houses are comfortable and charming and many old houses are dreary and cheerless.
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