Post # 1
Ok so Darling Husband and I have been house hunting for the better part of a year and seem to meet at the same cross roads. We’ve found 2 potential houses that both have pros and cons.
House #1 is $350,000 (would probably go for $325,000), in our current neighborhood which is good, but not our favorite school district (I have a 10 year old daughter). The house has a HUGE backyard (1/2 acre) and has been remodeled beautifully. The only thing it needs is new countertops.
House #2 is $265,000 (would probably go for $200k or $225), in our favorite school district (best in the county) but not our favorite neighborhood. It has a newer kitchen but needs some work. Carpets to be ripped up, molding replaced, furnace and A/C, and the basement needs to be completely re-done. There is some sort of hole in the ceiling that we aren’t yet sure what it is from.
My feeling is that I’m not afraid of work and the lower mortgage payment would be awesome. It would allow us room to put money into the house and/or still be able to do things like go on vacations other than our annual family trip to the beach. DH I think is a little afraid to do some of the work. I also feel like if we put money into the house, we can sell and upgrade in a few years, but if not, the house is a good enough size to live in with 3 kids anyway.
So what would you do?
Post # 3
I think there are a lot of factors that would come into play here. Would you rather have a better neighborhood to live in, or better schools? What kind of loan are you getting (FHA requires things to be done before you close)? Can you like in the cheaper house while its being renovated? Would you do the work yourself or have a pro come in? Would it honestly be cheaper to fix up that house?
These are all questions I would ask myself if I were in your situation
Post # 4
Thats a tough one.
We chose our house because it needed some work, but was in a great neighborhood. The school district isn’t great though, so we plan on selling in 7-10 years (we don’t have kids yet). However, who knows what the housing market will be like then.
Based on your description I would lean towards the second house, but the fact that you dont really like the neighborhood is a huge negative in my opinion.
Post # 5
Honestly, the better school district would be the deciding factor for me. Plus, you could do the repairs on the cheaper house much cheaper than the $125,000 difference in price.
I’d buy the cheaper one that needs some love.
Post # 6
We would be able to do majority of the work ourselves.
We would be going conventional and most likely putting down 5% to 10%.
House #1 is in our current neighborhood which is a similar neighborhood to House #2. The difference is the school district, which for me is #1. The other difference is the yard size. House #1 has a huge yard and house #2 has a smallish yard.
I have a hard time letting go of this house that is sooooo cheap. DH just doesn’t see my vision, lol.
Post # 7
Ususally the better neighborhood goes hand in hand with the better schools, so I’m a little confused on that point. But, I’d choose the better school and a house that needed some work. There is a TON more value to be made doing the work yourself.
Post # 8
- Wedding: September 2009 - City Hall
If you’re comfy with the work, I’d say go for the cheaper house in the better school district.
A lot of the things you’re describing are repairs that could happen over time (like ripping up carpet, molding, basement, etc). If you could live with those things now, go for it. Also, how confident are YOU with doing the work? I mean you, not your hubs. Sounds like he’s not sure he wants to, and so maybe you’ll need to take the reigns. I’ve done the majority of the work on our home and have learned SO MUCH doing it! I think my Mr. appreciates it that I don’t force him in to doing projects he doesn’t want to do. I just do ’em!
Obviously get any house inspected. Things like a hole in the ceiling–you want to find out what that’s from. It is so worth it to spend a few hundred bucks to have a pro take a look.
Post # 9
Hm. You said it’s not in your favorite neighborhood but is it a good neighborhood?
Do you have kids now? If you don’t I would be less concerned about the school district since you plan to flip in a couple years.
The biggest thing for me in your situation would be can you get it low enough to make it worth your time and money that you will put in the new house to fix it up?
My husband and I wanted a fixer upper in a great neighborhood and great school district. We don’t plan on moving ever again. And to us no matter how fixed up a house is it won’t be to our exact tastes. So remodeled or not we would be changing it. So for us a lower priced fixer upper was perfect for us. But then we’ll be here for at least a good 20 years.
Post # 10
Do you have the money to do all these renovations to this house? How long are you planning on staying? If you aren’t going to stay for 5+ years, it might be hard to get back that money that you put into renovations, especially since it’s not the greatest neighborhood. You want to buy the worst house in the best neighborhood if that makes sense. Putting a bunch of money into a house in a not great neighborhood probably won’t turn into money when you want to sell it later.
PS – Have you talked to a lender yet? It seems like a lot of them won’t do 80/10 loans anymore.
Post # 11
@pinkshoes: The neighborhood is difficult to describe. Not that either is a bad neighborhood, but we live in a water oriented area. Both neighborhoods are “shore” neighborhoods without sidewalks. Some homes are not exactly kept up and others are. The houses on waterfront and either little cottages or completely re-done McMansions. It’s really a plethora of home options. Both neighborhoods date back to the 1950’s-1960’s. Hope that helps!
I am totally confident that I can do the work…I just need to learn how. My dad and my Father-In-Law are both super handy. My dad used to do construction and can do anything but electrical work. My Father-In-Law has done a ton of projects on his house and has the ability to do electrical work. My Father-In-Law helped his son, my BIL, completely gut and renovate a Baltimore row home back in 1999.
Post # 12
@regberadaisy: Yes, both neighborhoods are good neighborhoods, just not our favorite. Our favorite neighborhood features homes that need work for $350k-$400k and completely finished homes for $400k++++++.
Yes, we have a 10 year old daughter going into middle school next year, so schools are a BIG concern for us. The current middle school is ok/good…but we don’t want ok. We want the best.
We would have the money to do these renovations and live in the house too. We have money saved up plus the cheaper mortgage payment would give us room to invest in the home. This house, we could stay in forever…it’s big enough. Or we could sell, it really doesn’t matter.
Yes we have talked to a lender and there are plenty of banks doing 5% down conventional loans still.
Post # 13
If you aren’t opposed to doing the work, then I think cheaper house in the better school district is the way to go, especially if you plan on staying for a substantial period of time. And the renovations you mentioned don’t seem tooo bad. Furnance/AC will cost some money and so will the basement, but unless you need the basement right away, that can be done at a more leisurely pace. With a daughter going into middle school, I think the school district should be the biggest factor, and obviously a smaller mortgage is great! And all the renovations you mentioned can be done for much less than the $125k price difference.
Post # 14
I voted for the cheaper house because it’s in the good school district. To me that was our top priority and we didn’t even have kids yet when we were buying a house. Heck, we weren’t even engaged yet. But it helps with the property value of the house as well.
Post # 15
I voted for the cheaper house that needs work in the better school district.
If you guys are willing to do the work thwn I say go for it! 99% of the time is you chose your renovations wisely your house will appraise for more than the renos, then you’ll have a great house in a great schhol district.
Just don’t let the work get you down. Fiance & I just started this process ourselves, except the house we bought needs everything, roof, windows, doors, ceilings, flooring, kicthen and baths. It’s a little overwhelming sometimes, but when its done the $40k in renovations should bring our house to appraise for $300k minimum, which is $130k more than we paid. The key part to this is that we have a great big piece of land in a great neighborhhod, with great schools, the previous owners just never did ANYTHING to the place.
Good luck! It’s very exciting!
Post # 16
We bought the cheaper one that needed some work. Two years (almost three) later and thousands of dollars and TONS of work, and we’re still not done. I vote pay the extra money for the house that’s complete.