Post # 1
Fiance and I are looking at buying our first home this year. We have been looking for over a year but are not sure what path to take. We are not sure to buy a brand new home with a small backyard (pros: ready to go just move in/no maintenance needed. cons: tiny backyard/limited space), or an old house with a large backyard (pros: potential to knock down in future and build dream home/more value for money due to large 600metresquare+ block. cons: older houses need maintenance/spend a lot of cash fixing it up and making it habital).
We are not sure what to do because we don’t know which option will benefit us. We are in Australia and we get first home owner grants of $7,000 for established homes, or $15,000 for new builds.
What are your thoughts/opinions? We are a little stumped… which option will treat us better in the long-run?
Post # 3
First of all lucky SA! We only get $7k no matter what in WA.
I think it all depends on what you find as your needs, we have two dogs and plan on having kids in the near future so a new home without a yard or much of one isn’t good for us. We would prefer to have something that we had to do work to if it meant we could get the room to move.
Post # 4
- Wedding: October 2011 - Bed & Breakfast
Is this your forever home, or something you plan to keep for only a few years? I think that may effect your decision. Think about it in terms of the neighborhood/area? How close are your options to work? Do you like the neighborhood? If you go for construction in a new community, are you comfortable with having construction going on around you for a few years? Do you want to have pets or kids, who may want space to run and play in a yard? Do you want to have to do yard maintenance, or would you rather not spend much time on that activity? Do you love something fresh and new, or do you crave something with character and history? I really don’t think there is a right answer here. Itr’s really about which option best fits your needs and goals.
Post # 5
I think it depends on your needs and wants. For Darling Husband and myself we always thought we’d want a huge yard for the dogs but then before we bought we had an opportunity to rent a house with a big back yard and we ended up not using it ever. The house we rented had a nice deck that we always used but the yard was just a pain for us to care for. We have two dogs and they used it but mostly we ran them at the dog park and walked them. When it came down to us buying we went with a new build with a small yard. We decided we didn’t want to do a lot of renovations (we still have a lot of projects but it’s more small stuff like painting and decorating) plus we didnt have the cash for major renos and loved the neighborhood we got to build in. We also built a home we are going to get to grow in to. But that’s what was right for us. What do you think is going to be better for you?
Post # 6
I always thought that I would purchase an old home and fix it up just the way I want it. I love homes with character and large backyards, so I thought fixing up an old home would be perfect for us! However, my sister in law just purchased a fixer upper and seeing what she is going through has really changed my mind. There is constant work to be done–she never really has time to sit back and relax because there is always something that needs to be done on the house. After she finishes a 50 hour work week, there are still hours and hours of things to be done on the house! Although it’s nice because she is getting to pick out all of th enew elements on the house (what color flooring, cabinets, wall color, etc.) it’s so much work!
I think it made me realize that a fixer upper is a lot more work than I thought, and with my busy schedule, I just couldn’t imagine to making such a big committment! (For example, she is fixing something as simple as cabinets, and it’s turned into a two week process that has been driving her mad!)
On the other hand, the house we live in now was purchased turn key. It had been newly remodeled. At first I was super bummed out because I didn’t get to pick anything out (granite, tile, molding style, flooring, etc.) but now I realize that this is what works better for us.
What is your schedule like? Do you see yourself with lots of time to work on the house? Are you a pretty task driven person (AKA you won’t give up when you get tired of it) Talk with your SO about it… just don’t bite off more than you can chew!
Post # 7
@kfiorita: @lisha_1988: I think both of you are lucky! In NZ we get nothing 🙁
I think this is a really personal decision that only you and your Fiance can make.
My Darling Husband and I ended up buying a house we needed to do work on as having a large backyard was important to us plus we don’t mind renovating ourselves (my dad is a builder so has helped a lot and I lived in a lot of half finished houses growing up so know what it is like!)
Whereas my sister brought a brand new apartment in a nicer part of town but has no backyard etc but that is what suits her and her husband better.
We do want to use this house as a rental in the future but figure the more land it has the more rent we can charge and hopefully we will get a family to rent it.
I agree with other people about what your needs and wants are at this time – will this be your forever house? Or a for-now house?
Post # 8
Thank you everyone for your feedback and opinions. We are in a tricky situation at the moment and that is what is making things so difficult. FI works full time and is a fully qualified boilier maker/welder. He always talks about doing jobs on the side and needing the space for a big shed with enough room to weld steel and what not. We both love the outdoors and gardening so we would appreciate having the space to grow fruit and veg. We also have a dog together… Benny the beagle 🙂 and we love him to bits (the yard size will be the deciding factor on whether we can bring him with us or not – or maybe buy him a girlfriend lol). I have always lived on a hobby farm so I have never had to live in the suburbs where I look out my bedroom window and see a fence.. I look out of my window and see paddocks and horses lol. I still study full time at uni and I will grauate as a highschool teacher end of next year. I have casual work and between our wages we make enough to pay all the bills and have a few hundred left over at the end of each week for entertainment/savings.
To give you an idea, a brand new home on a small block will cost us $265,000 and an old house on a large piece of land will cost us $230,000. But I guess once all the ‘fixing’ is complete that may roughly cost the same??????? THEN AGAIN, the brand new home gets the $15,000 grant and the established home only gets a $7,000 grant. (should I just forget about the grants and focus on what is best for us???? – then again.. every cent counts!)
It will be a first home but we are ideally looking for a long term investment. We would like to buy something to live in for the next year or so (to be eligible for the grant) and then move on while still renting it out.. This is our plan because once I have graduated I will be doing a 3 year teaching placement in the country which means I will need to move away anyway. So depending on whether Fiance can find a job near me, he will either stay in the place we bought, come with me or maybe move back home to help save up while we make money on renting it out.
So that is why we are a little stumped. We are trying to think about the future but it is just sooo tricky! I guess we are leaning towards an old house and big block. We can always sub-divide it and sell it or even sell half and build our dream house on half later on. My dad said that it will be the best way to go because there will always be money to make on it. However we have also found a brand new villa that we love, we have put an offer down but still haven’t made our minds up yet. It has a small backyard but the house is gorgeous and very nicely finished off.. we love the colour scheme used but the only issue is that it is in a community where everyone uses the same driveway and there is no parking if we had visitors.
I am getting a little impatient.. Sometimes I wish I had a fortune teller who could guide me in the right direction lol
Post # 9
@nzgirl: Not true! We get local councils, LIM reports and real estate fees!!!
I agree with one of the PP’s who asked whether or not this would be a forever home or just a temporary stop on the road.
When Darling Husband bought his first home, we didn’t even think about location and bought a 30 year old place in desperate need of renovation, seven years later and we STILL haven’t finished the place and now that we’re expecting we’re have totally different priorities when it comes to buying a place.
For me personally I wouldn’t bother to renovate again and I can totally see the appeal of buying a brand new place!
I would try making a list of all the things you wish you had in a place and then decide what sort of house is going to best fit your needs. Good luck 🙂
Post # 10
@nzgirl: Thanks for your post 🙂 A you can read in my jumbo post after yours :S we are looking at living in it now and then renting it out later.. until we decide where we want to live. So it may or may not be our forever home. We may decide to divide the land and sell it later, or even build a new house on it… The hosue we are looking at is very old solid brick but in great condition with a lot of character. The facade is sandstone and it has a wood fire inside, the rooms are huge and the ceilings are over 2m high. It is also on 866msqu which is an amazing size. Price dropped from $265,000 to $239,000. My dad seems to think we can get it for less but we’ll see. So many decisions to make S:
Post # 11
@Kemma: I think a list is a great idea. We have done one just casually and it always leans towards a larger piece of land and with an older house. I guess having an older house isn’t what we both WANT but it is generally what comes with having a lot more space. We daydream about our garden and our dogs and all the space we have for entertaining.. but then we think ‘a small finished place will be easier’ lol. I keep thinking to myself, a small finished home will be great for us because we won’t have to do anything to it and practically just move in. But then I think that it has reached it’s peak and doesn’t have potenital to get better (unless the suburb happens to boom). Then I think about an old house on a big block.. there are endless opportunities with knocking dow, renovating, renting, extending, sub-dividing. I feel that if we can get it cheap.. we will have heaps of choices and options on where the house and land can bring us. AHHGGG!
Post # 12
@kfiorita: There are certainly plenty of opportunites in old places but buyers do need to be realistic on the costs of renovation and ongoing maintenance.
As an example we’ve spent about $35,000 on renovations in our place and $20,000 of that was the kitchen area alone (cabinetry, floors, new gas hot water system, appliances etc – my Dad did the labour for free!). We also had to replace our gas heater, re-carpet and re-wallpaper the entire place. We were very lucky that our house was structurally ok so the work was all cosmetic (but still pretty major).
I think the key with old places is to make sure that you don’t over-capitilise and that any $$ you put into your place can be re-couped by increased property values.
Interestingly enough, when we buy our next place, my biggest priority will be location. I want to be closer to our town centre, live on a much quieter road and live in a good school area 🙂
Post # 13
Something to consider if you intend to rent your home out later down the track is a depreciation report. You can depreciate quite a lot more of a new home than you can in an old one- so this is worth looking into also. Again, if you intend to rent it out- it might need more repairs and maintenance than a new home which can be a financial and logistical nightmare when you are elsewhere. We bought a fixer-upper for our first home, rennovated it completely, then rented it out. We sold it about a year after we bought our new home as things constantly needed repair and I couldn’t handle the stress of not knowing what might need fixing next. In hindsight, we probably should have sold it right away because it would have made more sense- and a whole heap less stress.
That being said, my SO is a carpenter- so we bought another fixer upper and I can’t wait to do it all again..! I LOVE rennovating! But he’s got the skills to do it. I couldn’t do it by myself.. and it works for us!! Goodluck with your decision =)
Post # 14
If you intend to rent it out in a year – I’d think newer would be a better option. An old home is going to require a lot of maintenance and upkeep (especially when compared to a new home) and as a landlord, you’d be responsible for all of that. It won’t be easy to deal with from a distance while you do your teaching placement. Also, I think more people would be interested in reanting a newer, more renovated place than an old home.
Post # 15
It depends on the funds you have reserved for the renovations, the time you would be able to devote to it and your current needs when it comes to space. If you will be tight on cash after the sale and you work full time, the established home might not be such a good idea since you are getting a smaller credit for buying it and you don’t have the funds or time to make the renovations. But if you will have some cash and you feel like you need the yard NOW and not in 5 years, then it might make sense to buy the bigger home now.