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Buying a house, what to do?

Buying a house, wha to do?

  • Buy old house and renovate. ($)

    Votes: 8 38.1%
  • Buy old house in perfect condition and just move in. ($$)

    Votes: 6 28.6%
  • Build a big new house we design. ($$$)

    Votes: 7 33.3%
  • Keep renting, you don't need to build any equity

    Votes: 0 0.0%

  • Total voters
    21

DocVijay

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City, State
Tampa, FL
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1999 Sport 2WD
OK, we are looking to buy a house right now, and we have three options but aren't sure what to do. We have three house in particular picked out, but aren't sure how to proceed. They start at expensive (1) and go up to really expansive (2) and end with holy crap (3). The size of each house also goes up with each option (from 2700 to 3600 sq.ft.)

1) Buy an older house (16 years old) and completely renovate it inside and out. We would obviously be limited by what is already existing, but it would be like a new house. Positive: we get a house with almost exactly what we want; cheapest option. Negative: Don't get to choose floorplan; still an older house underneath; time to do the work.

2) Buy an older house (15 years old) that is in immaculate condition. Looks like it was built only a year ago. It also has 75% of what we want, and only needs minor upgrades, which can wait for a while. Positive: Almost what we want. Negative: Still an older house; on the golf course, so the price is much higher than (1) even after renovation.

3) Build a brand new house. This would be our house, with nearly every interior and exterior feature chosen by us. We get to choose the floorplan, and pretty much every detail imaginable. Positive: High tech, top of the line, really is OUR house. Negative: Must wait at least a year to move in, costs over twice what (1) costs!

So what would you do. We have been pre-aproved for a mortgage tha can cover any of the three options, but we're not sure of how much we would be comfortable spending. If we go with (1) then we would be living there for a few years, 5 or so, and then getting something bigger later on. With (2) we would stay a while longer, and then get something slightly bigger. If we choose option (3), it our house for a LONG time, probably till the kids go away to college.

So which choice is right? I know it's a hard question to answer, since it is such a personal thing, but what would you do?
 



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I would go with 1 if you plan on moving within the next 10 years again because you will be able to fix it up like new and it will be worth a whole lot more when you would be ready to sell.

Plan 3 would be if you would be staying in that home for more than 10 years because it would need no work for a long time, you would know whats its bee though and it will be made just for YOU.

plan 2 just wouldn't be as ideal unless your a big golfer.
 






I wouldn't go with # 3 unless you plan on staying longer than 5 years.
Sounds like # 1 to me! Just make sure it's in a condition that your family can move into and not have to do anything RIGHT away. It should be comfortable for at least the first 6 months, time to settle in! Also, consider how much work you can do and/or afford to contract. If you are handy enough and can get the right tools & equipment, an older home can be very fun! My house was built in 1920, the outside is completely refinished, new siding, roof and all, the intrerior still needs lots of work, but it's getting there! Just make sure you're not getting in over your head with a fixer-upper!
 






With option (1), it would need all the work before we move in. The guy who is selling the house is a big-time smoker, and the house REEKS of smoke. So the carpets and anything the smoke sticks to would have to go. No reason to not go ahead and do the rest then also. We would redo the floors, kitchen, doors, bathrooms, and the patio/pool area (and probably more). As for doing it myself, the amount of work needed is really overwhelming for one person, so we'd end up having most, if not all, done by someone. I really don't think it's getting in over our heads, as the house is already underpriced becuase of it's condition. Many people have looked at it and all have turned away (it's on the same street as my parents, so I've got the inside scoop).

The length of time we stay would determine how long we would live there. If we went with (3), then it would be our home for a very long time, if not forever. With the other two, we would eventually move and get something bigger and newer. So this is basically the issue, do we build our dream home now, or wait until later?
 






i would build the dream home now... but you need to make sure you have the financial capital to do it.....
 






Are you sure that buying the old house and fixin it up isnt just gonna be the same as buying the new house. A lot of people dont know what goes into redoing a house. Its a treamendous amount of work and with houses its never just what you think. Once you open up something to remodel you find something else that needs to be fixed. Not to mention that your gonna want to upgrade piping and maybe have to do some foundation work with a house that old. From what you mentioned about the first house that needs to be redone and the things that you are DEFINITLEY gonna find that are also wrong once you open her up it seems that you will be forkin out the same if not more than just building a custom home. As you said you will have to do the work before you move in so it will be the same as building the new home in terms of move in time. We have completely remodeled two houses and built two custom homes and the way I see it is that a remodeling job the magnitude of the one you want to do is more suited to someone who is already a homeowner and can take it on as a project. My opinion would be to just go with the new home, with the baby and all you wont have the time or energy to have to fix things that will come up all the time with an older home.
 






#1 or #3. #2 You're paying $$ to be on a golf course (unless you,re an absolute golf freak), and there's a good chance of having people walking around in your yard looking for errant golf balls (if it's that close) and you might occasionally lose a window. The advantage to #1 is that you can live in the house while you are renovating, and you can slow down the pace if finanaces are an issue at some point. The advantage of #3 is you get exactly what you want (usually with some tradeoffs), but you can't live there while it's being built, and it will cost a LOT more up front.

We're in our 2nd house right now. We bought our first house knowing we would only be in it around 5-7 years, and we worked on it accordingly. Put enough $$ into it to make it liveable and resellable, but didn't go to town renovating it because we didn't want to overprice it for the market when we sold it. The house we are in right now doesn't have all the stuff we want, but it's darn close. If we have to move again at some point, I would probably build my own house or have a custom home built. I've got enough knowledge and experience to build my own place, it's just the time factor.

WARNING! When having a custom home built, make sure you know construction techniques and code very well, and make LOTS of surprise visits to the sight (Like every day). You would be amazed at how much stuff builders "hide" behind pretty siding and nice drywall. We were one of the very first houses in our neighborhood, and I've seen a lot of questionable construction go up. Things like neglecting to seal a block wall from the outside before backfilling, using 4x8 insulation sheets instead of osb or plywood for outside wall components, cutting back on 2x6 usage in favor of 2x4's to save a couple $$, crappy wiring, etc. KEEP YOUR EYES ON THE CONTRACTORS CONSTANTLY!!!!!!
 






The big thing about buying a house is you must deside if this is the one you wish to live in and grow old with!

You could buy #1 paint, clean inside, clean outside garden abit, invest $1,000 - $ 3,000 and turn around get a good realty company and make $10,000 - $30,000 +

I know a few people who did this in a few months many times.

You have to deside, myself I'm in the same boat... I would build if I could but will have to build up first. Then build my own.

You will not see a property value increase for a while by building. Not right away anyway, sometimes it happens, but more often value is slow to rise. With a older house, good planning and little work will increase faster.

I know its tough but when it all comes down to it...
If you buy #1 fix-up sell & build #3 cool.
If you feel that #1 would only be temp then I say build your own.
I really don't think you will be happy unless you build your own.
 






16 year old house isn't old. Mine is 83 years old. Now THAT'S old. Sure it needs a lot of fixing but it was a big house for the money. I could do almost all the work myself so I save somewhat.

If I were you, I would go with the most expensive, biggest one you could afford. Calculate your finances carefully and go from there.
 












I like option 1. The housing market is somewhat overvalued. The bubble may or may not burst anytime soon, but I find it yard to believe that the current real estate market can sustain itself much longer. Renting and waiting a year can be costly when you considering equity, taxes and low mortage rates. I am assuming that you have never built or renovated a home. If you buy the fixer upper you can learn, sometimes from mistakes, what works for you and what does not. You can learn about what you like and what you really want in a house.

Also if you invest the money you will save by going with option 1, you will have cash when you want to build your dream home. You could also invest in the future home by buying a lot or acreage for your future home now as an investment.

One more thing being house poor is a drag. You can't afford things like sooped up Explorers.
 






I would probably do 3 if you like the location(schools for your kids mainly) and have some job security. You are a high bracket tax payer I would guess- the only real write offs will be mortgage interest for you. Rates in the future may go no where but up. Strecthing a little buit now if you have decent job security with possible future income increases isn't going to hurt you. # years from now when interest rates are in the 8% + range you will be looking smart. On the other hand in a few years if you are looking to move you may be more constrained by rates.
IIRC you just had kids... somehting to consider when remodeling- whether you do it yourself or hire it out. They wont like the disruption, your wife wont like the disruption, and you will likley not like the disruption. Remodeling is messy, dangerous work- takes longer than anticipated, costs more and can really strain a family if the plan doesnt work.
Rent a place have a house built, and then live in it for 10 years. Having a house built is no picnic, but not having to live in it while its being done, makes it much more manageable.

Whats the market like in the areas- how does rent compare to buying? If this fixer upper is underpriced and still on the market thats may not be a good sign. I was in Sarasota this winter and took a look at a few houses, talked to some RE agents, and the market didnt seem out of line to me vs what I guessed were replacement costs, and actually looked cheap(away from water) , and somewhat slow- could be the areas I was looking in though. RE is very local. My comparisions may be shaded since here in the DC suburbs we have bid openings at posted times with automatic escallation clauses for quite a few homes- so you wont find a home thats underpriced.
I wouldnt worry too much about a RE bubble- transaction costs and replacement costs are two reasons. Its expensive to sell a home, and the cost to replace a home is rising (take a look at your insurance bill, or the tax bill, or raw materials costs at the home center/lumber yard) so the fair value of the asset is rising. But I wouldnt count on home equity increasing at the rates seen over the last 2-3 years either.
RE is a long term investment, and I would be prepared for a 20% price reduction in my area, check local history of RE prices to get an idea of what you may be able to expect. If you are forced to sell a home and dont have the luxury of waiting out the cycle - which could be 5-10-15 years-price consessions could be even more dramatic.
 






which option.

Problems with option 1. All these repairs you are talking about will require cash money on top of buying the house. This could get very expensive and leave you with no cash reserve.

option 2. gives you a house you can move into without need of work or extra cash. Sure the cost is higher than option 1, but you have that cost mortgaged over 30 years instead of having to come up with large amounts of repair cash along with your closing costs and house payments.

option 3. - not always what its cracked up to be. problems still happen, its expensive, and lots are generally smaller than they where in the 80's.

Of course, interest rates are only going up. I would make my decision yesterday and LOCK!
 






If you and your wife will live in #3 for the next 20 years then go that route. At my work one of the salesmen built his dream house 5 years ago, now he is moving because his wife wants to be closer to her friends.
 






Al: South Tampa. We need to be within 15-20 minutes of Brandon Regional. I looked around, and the cheapest house that had the things we were looking for was going for $799,000. That's a bit too much.

Well, for choice (1) I was actually thinking of investing around $50,000-$70,000 in renovations. Also, I would not be doing the work myself, too much to do. It is underpriced because of the interior conditions, not the structural soundness of the house. My parents were here before it was built, so they know the house is well built. The house two doors down just went on sale also, and they are asking $400,000. This house is almost half that.

For (2) we do have an issue with the whole golf thing. We don't play golf, and if not for that, we could get the same house for a lot less. But for resale it does help.

Choice three is an option still, but we just moved up our maximum price for a house by $75,000, so we are going to look at more houses. We'll see. If we STILL don't find anything, then we'll look to build.
 






OK, we did find another house that we liked, but we like the house on the golf course more. I'm going to go make an offer tomorrow. Then we'll see what happens from there...
 






3 words for you: Location, Location, Location


Buy the best location you can afford. You can always remodel the house, but you can't fix a poor location.
 












aldive said:
Have you looked in an adjoining town such as Brandon?

Yeah, as of yesterday we have gone through almost every available listing in Brandon, Tampa, Valrico, Lithia, Riverview, and Plant City. Houses are really going fast these days, definitely a seller's market.

Anyhow, we are making an offer on one today, with another as a backup.
 



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