NBR- Which House Would You Buy?

JCWhitey · October 2014

Totally not baby related, but kind of "OMG we're having a second baby and need room!" related. If you were buying a house which one of these two would you buy? The hubby and I are torn!

House #1: HUGE 4,000 square foot home. It is technically a two family home with a 1 bed/1 bath "grandma suite" in the front and then a 4 bed/1.5 bath with large rec-room main house. The main house is probably about 3,000 square feet of the whole house. It has no flooring (just plywood), the kitchen is in rough shape, the bathroom is in rough shape, and the previous owners LOVED bold bright colors. Weird bold bright colors. So basically a full reno in the main house. The grandma suite was recently remodeled and is very nice. Total cost to heat the house in the winter can go as high as $600 with the current system. So, that needs to go, too! Renovations would probably cost $30,000+ if you only deal with the stuff you can see. It probably needs a new roof, too. TONS of potential including getting $600-700/mo to rent out the grandma suite.

House #2: Smaller 1,100 square foot home with a full unfinished basement. 3 bedrooms/2 bathrooms with the option to finish the bathroom and have a fourth bedroom/guest room down there. VERY nicely kept up. The previous owners have all been elderly couples with only grown kids, so no little kids to trash the place.

Insulation is fantastic, the house was really warm considering the heater wasn't turned on (it's 40 outside today). All heating units are brand new and efficient so heating bill is under $150 even in the winter. New roof in July '14. Tons of cute character. The only thing that would need to be "fixed" is to replace the carpeting in the kitchen and bathroom. Both are in great shape but who the fuck puts carpeting in the kitchen and bathroom!?!? Overall move-in ready at least from what you can see. But we estimated $15,000 to do a few things like paint and replace some funky curtains then finish off the basement.

Both houses are going for the exact same amount and we would be planning to move in January/February (long closings are common here). So I will be super pregnant and mostly worthless to help.

We actually NEED to buy one of these. There are a total of four houses in our price range in our town (with a total of 10 houses for sale, period) and we have yet to be able to find a rental larger than our current 500 square foot cabin, which we have to move out of in April. I wish we could take the time and see if something else comes up but in the past year the only new listing in town in our price range has been house #1 and we'll be homeless in April if we can't get a home. It's tragically slim pickings here. A part of me sees the big house and thinks "POTENTIAL! BANG FOR YOUR BUCK"! But the more sensible side of me says "MONEY PIT! OMG THE WORK!!!". The other house is move-in ready and way more appealing to my fat pregnant self.

janda426 · October 2014

If you have the money and connections to get the work in the bigger house done then that's a no brainier to me. High resale value, lots of potential in this house.

The smaller one is finished nicely but doesn't sound like there's any more room for potential growth or finishes. Especially since these houses are the same price.

ETA you also won't be pregnant forever and shouldn't make a home purchase based on move in ready vs not IMO

MeganPobega · October 2014

If it were me, I would just determine how long you planned on being in that house. A few years? More than 10? How many children I planned on having. As much as renovating the bigger house sucks financially, you could probably receive more after fixing it up if you planned on selling. You could always stay in grandma sweet while doing some renovations. But it's all about how much you want to spend.

Haps92907 · October 2014

I see two big questions that would guide your decision. Are you buying a forever home (as someone else mentioned), and can you tolerate an imperfect house for a while or do you need it "move in ready?"

We bought a house that needed a lot of work a few years ago, and have gradually been upgrading things. It's a lot more house on a much bigger property than we could have afforded if it had been move in ready. We focused on the functional stuff that needed to be upgraded first, like the roof and insulation, and lived with the ugly for a while. It's gradually turning into out dream house, and I'm really glad we made the choice we did. I tend to have a lot of patience though and didn't mind a slow transformation. My H struggled more with that, wanting everything to be perfect right away, but he got through it. I think the bigger fixer upper is the move if you can tolerate it.

rowboat4 · October 2014

I'm on the side of the smaller home, especially if finishing the basement is in your budget. I just think, like pp that the renovations on the bigger home are going to be a lot more than what you are currently estimating. You'd be surprised though how much you can make of a smaller home, so that would be my choice.

honkytonk_kid · October 2014

I would go with the second house.

The first sounds like it could be promising, but all I can think of is the massive hassle (pregnant or not) and money pit of a full renovation.

There aren't really houses with basements around here, so I'm kinda intrigued by the possibilities! You could put a guest room, another bedroom, a play room, etc.

LBeez13 · October 2014

I like the idea of the basement but I think I would go with the larger house and do the fixing.

Although, I may be more inclined to just rent out something for another year until I find something that feels more right for my family.

Mic512 · October 2014

In my experience the better value is house #2 - there are always hidden surprises in a renovation. A lot of this hinges on if you can afford to do the renovations sooner than later. I agree your estimates sound really low, our quote for the roof alone was between $14-20k for a 3k square foot house. The other thing to consider is do you want your kids around a construction zone - dust, paint fumes, other dangerous hazards?

KT416 · October 2014

I think everyone made good points. I think it really depends on how much work you are willing to do and are you doing it or hiring someone.

It sounds like you could live in the in-law suite for awhile if you needed too. If they are the same price I would do the bigger house, especially since you could get some extra income too, so it sounds like house #1 is the better buy.

With that being said, both of you have to be on board with doing a fixer. It can be a lot of work and can cause stress in your marriage on top of being pregnant and everything else. Also, we did a total fixer and we spent SO MUCH more than we thought we would, so make sure you budget correctly and leave some room.

Good luck with your decision!

janda426 · October 2014

@mel7806‌ wow where are you that a new roof is $15k?? Our brand new roof was $6k

koshveily · October 2014

Move-in ready with the understanding you may need more space someday and will decide to move then. Between heating and upkeep of the huge house, I just can not see it being worth the money.

wishiwaspreggo · October 2014

I'm Team Big House, depending on a few factors.

Like PPs asked, will this be your forever home? If so, then the 4000 sq ft house is totally worth it. Think of the long term. Yeah, it's more space to clean and probably more upkeep but it would give you and your family a ton of space each. When your kids are teenagers everyone will be happier if they can gravitate to different parts of the house. Plus if you like to entertain having a large house would be advantageous. I love throwing parties and wish I could more often but I live in a 1300 square foot condo. I'm chomping at the bit to move already but we're waiting until we literally can't stand it anymore. Probably when baby 2 arrives.

Plus it's customizable to what you want. Over time, you could turn it into your dream house.

I'd only do this, though, if you knew enough about home renovations to be dangerous and had a *very trustworthy* contractor you could turn to. My parents endured a 2 year nightmare when I was in high school when their contractor went bankrupt and abandoned our house when it was mid-renovation. My mom about had a nervous breakdown.

But then if you don't mind moving again in 5-10 years, the smaller home may be the better option for the time being. It's a hard choice, I can see why you're struggling with it. I just know 100% that I do not want to move again after my next move so I guess that's why I'd push for the bigger home but this all depends on you and your circumstances.

Either way, good luck! Moving is a bear!

Whitfry · October 2014

If I were choosing, I'd go with the smaller house. I'd focus on making the necessary changes and then enjoy personalizing and decorating and making it homey. I'd much rather do that with an infant and a young child than rennovate a big house that will probably have hidden costs and flaws. Buying homes from elderly people is often awesome, since they tend to take such great care of things.

But I don't need a boatload of space to be comfortable, I prefer cozy and intimate spaces. Plus, that basement will make a great romper room when the kids are older. Send them down there with their friends to play and they'll keep themselves nice and occupied.

Aeml1985 · October 2014

I know the bigger one seems like a money pit but if you get a good inspection hopefully you can avoid the unforseeable. My suggestion is to get the bigger one, live in the granny suite and renovated the main house as time and finances permit in order of need;
Heating, roofing, etc.

JCWhitey · October 2014

Carmar3 said:

Is the heating bill so high with the larger house because if size or inefficient heating system?

Both. We'd definitely need to replace the heating system down the road (this is phase two of renovations we'd have to do). We WOULD install a pellet stove to at least heat the living room/dining room/kitchen/half bath area of the home and that should cut it down $200 or so. But that's still super high.

EmpireRecords24 said:

Location details? Both great neighborhoods? Big yard or parks nearby? Good schools?

I honestly cannot tell you this without you being able to figure out exactly which two homes I am talking about and figuring out my address some day. Love you ladies, but I don't know you that well yet!

I will say that we don't have neighborhoods here. This town is tiny. Population is 1200 but only about 900 of those actually live in town. It's 10 blocks wide and 5 blocks long. Both houses are across the street from the school (k-12 in one building), and where both DH and I work. The quality of the school is debatable but we have no choice besides homeschooling.

Oh, the community center, with an awesome park, is also across the street. The houses are a block apart from each other.

JCWhitey · October 2014

I was going to do this all in one reply post but that would get long.

Thank you everyone for your replies!

This WOULD likely be a forever home... or for at least the amount of time we live here which may be a long time. So the size is definitely appealing but it is A LOT of work! $30K is for the basic repairs only (the roof wouldn't be fully replaced yet, just repaired. Kitchen would be renovated so the cupboards aren't falling off, but not fully updated. Bathroom would be cleaned up. Flooring would be cheap, etc.) We are estimating at least another $50K over the next few years to fix everything up how we would want it, we just don't have the money right now. We're barely going to be able to scrape together the funds needed to do the basic stuff. I will say the house IS livable despite how dire I make it sound. As in, people live in it now (a family with kids). So we don't NEED flooring, we don't NEED a pellet stove, we don't NEED kitchen cabinets that don't fall off. But we would like them.

Also while the size is appealing to me it's also a daunting thing for me. Even the 3,000 sqft in the main house is HUGE to me. I mean, I go in there and I just look at the space and think "WTF am I going to do with this!?". I grew up in a 1,500 sqft house and even as teenagers I liked the smallness. I feel like I'd lose my kids in this house. I know that's not really true, but it does make the small house more appealing. Almost like forced family time.

Ugh, you are all so helpful and I thank you but you are all like my friends here! Helpful but not helping to reach a decision. I feel like we just need to throw the addresses into a hat and draw one out. Or maybe just get an inspection on both and see what happens with those. I really just wish we had 4-5 more homes at least to choose from so we could find the perfect home and not the "good enough" home.

JCWhitey · October 2014

LBeez13 said:

I like the idea of the basement but I think I would go with the larger house and do the fixing.

Although, I may be more inclined to just rent out something for another year until I find something that feels more right for my family.

If this were a possibility we would soooooooo rent! But it's not. Long-term rentals run September-April here. For the rest of the year rentals are used as vacation rentals and the price is at least double, if not triple or more. We can't afford our place once vacation season hits and the one apartment building in town has a 1 year wait list for 2 bedrooms and a 3-5 year wait list for 3 bedrooms. It's kind of a nightmare. We got very lucky to get a rental, period. A lot of people end up getting rooms at the hotel for a month or more before they find a place.

JCWhitey · October 2014

totesmcgotes said:

Another cost to consider is furnishing the new house. 500 to 4000 sq ft is a lot more house to furnish. That is another up front cost to think about.

cardboard furniture. That is the only way we will have furniture for the first 2-3 years in the big house. Seriously, I wish I were kidding.

On the other hand, the smaller house comes half furnished with three chairs in the living room, beds in each of the bedrooms, two dressers, and a dining room table and chairs. All previously owned by an elderly couple so it all has that "grandma" feel to it, but it's functional!

JCWhitey · October 2014

Darbie914 said:

Am I the only one who shudders at keeping a 4,000 sq. ft home clean? Hell to the no.

THANK YOU! Everyone lately seems to think "Big is great!" To me big seems really scary. I can only imagine the nooks and crannies spiders are going to get into.

stine28 · October 2014

If you liked the coziness of a 1500 sqft house, then I'm definitely on team small house. My 2100 sqft house feels cavernous, and we bought it with our future teenagers in mind. But it could easily be smaller.

I cannot imagine cleaning your 3000 sqft portion of the big house, and I would not want to be a landlord if cash flow was tight either. There would be double the appliances that could break, all on your dime.

Finally, if this will be a forever house of sorts, I imagine you'd rather grow old in the smaller house as well. The bigger one would probably feel like a burden when the kids move out.

Edit: Embarrassing number of typos.

cafecreme · October 2014

I've been looking and researching houses for the last 3 years, and owned a condo.

I would go with #2. My reasoning is that bills will be a lot less because of less square footage. You won't have to budget for flooring, kitchen, etc. You could live comfortably for a while, and not think about extra expenses for remodeling this huge house. Everything is already in good condition and move-in ready with the small house. The space doesn't bother me, I live in a 800 sq. ft apartment currently..and if we had an extra bedroom and full finished basement, we would be set for the rest of our life. If you're the type that needs a ton of space, and wants that 2nd living room, and suite, then that's your choice. But, it's not necessary..actually, I wouldn't want it. Too much of a headache.

JenLa21 · October 2014

Sounds like you want the smaller house over the bigger one. Buying a home is a huge decision. And no one can make the decision but you and your SO. Sounds like both homes need some work though. And the cost of carrying a larger home can be very high. Usually higher taxes to start.

One thing to be cautious about is keeping used furniture. I knew someone who moved into a new home and kept the previous owners furniture, which just happened to be infested with bed bugs. Not to scare you, but always be careful of that sort of thing.

CoozieInMyPurse · October 2014

I would go with #2, but that's mostly because my first home scarred me forever with the amount of work/money I put into it. I loved that house, but I never want to do more than paint ever again. And if I didn't have to paint, that would be awesome too.

JCWhitey · October 2014

I'm definitely leaning toward the smaller house. DH toward the bigger one. We do have in-laws and lots of people that cannot wait to come visit us and the extra space would be nice for guests. If you can't tell we live in a very touristy area. The population doubles in the summer, everyone wants a free place to stay! But one thing I point out to DH is that we don't want things to be too comfortable for people. We want them to leave someday.

rm2013 · October 2014

I'd go for the big house. As PPs said you can live in the grandma suite while the major renovations are being done. My reasons are for long term value. You might never be able to afford a house like that in move in condition, plus interest rates are back below 4% right now. In 5-10 years both property prices and interest rates will be up. You've said you live in a popular tourist destination, so the rental income is a big draw to me. You said the high heating costs would be temporary until the systems were updated, so I wouldn't make a 30 yr decision based on a couple years of bills. You're planing to spend 15k on the little house so it's not truly move in ready - That's a good chunk of change that could go towards the big house with the higher return.

You'd be surprised at expenses and maintenance. We moved from a 65 year old 1300 sq ft 1 level house to a 30 year old 4000 sq ft 3 level house. Both have single pane windows which are totally shitty. We found out the big house has almost no insulation in the attic. Our monthly utilities are LOWER in the big house. We were shocked. Our annual insurance premium only went up $200. Sure we pay a lot more property tax but that's tax deductible. And I pay $150 a month for housecleaning every 2 weeks and it is more than worth every penny. Two women come and clean from top to bottom in a couple hours. I couldn't even do that in the small house!

Last but not least, space!! We were bursting at the seams just the 2 of us in the old house. Now we know we'll never *have* to move no matter how many kids we have. DD has a huge playroom, we have a guest suite (and frankly guests aren't as annoying because they aren't all up under you) and truly space to grow into. There are about 3-4 other rooms/spaces we don't even use right now. It was a big jump but we are happy with it knowing this is our forever home, and also that if we ever change our mind it's a super resale value.

Given the lack of inventory in your area I would probably pay for the inspection now so you can make an informed decision, and second what PPs said about getting firm estimates. And of course it all depends on if you can really swing the cost of renovations and higher heat for now. Good luck whatever you choose!

TwinsCitiesMomma · October 2014

At first I was going to advise to keep looking. But if you have to decide between these two, I would go with the 1100 sq ft house. It will be less work for the both of you, especially with the baby on it's way and you can always move out 2-3 years after you outgrow it. I feel the big house is just going to cause headaches and be a big money pit, especially since you had to "settle" for it.

Good luck!

tinypug · October 2014

Personally I'd go with the bigger house, especially if you're not planning on moving anytime soon. After living in a cramped one bedroom apartment for way too long, my husband and I bought a 2500 square foot house and we don't find it too big. We both have hobbies that take up a fair amount of space, so once the baby is here (with the possibility of 1-2 more in a few years) this house will be completely full. And honestly, I find it easier to keep a big house clean vs my small apartment because everything has a place so there's no clutter. I'd rather deal with renovations, extra cleaning and higher heating bills for a house that suited my needs much better.

JCWhitey · October 2014

knitnut said:

Is the larger home a single level house? How high are the ceilings?

It's actually four stories but that's a deceiving picture to paint. Basically it's a single level for most of the house and then the bedrooms, bathroom, and the rec room are a two story house that was slapped onto the back of the house. It's half a flight of stairs down to get to the rec room and half a flight up to get to the bedrooms. Then there's a basement, but it's not something we could ever renovate. So three livable stories but only one flight of stairs, if that makes sense. From the outside it does NOT look 4,000 sqft! Very deceiving house. Ceilings are probably 9 feet in the main living part, I'd guess.

JCWhitey · October 2014

Beaujolais11 said:

Hadn't you mentioned before that you are planning on starting an in home daycare at some point? Do either of the houses work better for that business decision?

No I'm the director of an early education program in a gym and we are working on opening a childcare there. So it won't be in my home.

honkytonk_kid · October 2014

Please update when you decide... I'm curious

JCWhitey · October 2014

Thanks everyone! My ILs are flying in next week to come take a look at the houses for us. They've started a real estate investment company and buy and flip houses for a living now. We're hoping they can give us some insight. FIL also mentioned that when we were ready to settle he wanted to give us money for a downpayment. Kind of nice news and may help with the decision since it gives us more wiggle room money. But we'll see what they say!

JenLa21 · October 2014

Good luck with the in law visit. Hopefully they can help you guys make the best decision

caro5931 · October 2014

I would go with the bigger house. My parents purchased just after I was born with a very similar situation. The house was a foreclosure, 4,000+ sq ft with a small in law apartment and needed a good amount of work. In the long run it was definitely the best investment. They were able to rent the in law apartment and use that money to do repairs and pay some of the mortgage. It sounds like you could get a lot of income from the apartment especially in season (maybe even rent weekly during the summer?).
My bf and I have actually decided to buy a larger short sale "fixer upper" based on my parents experience. It sounds similar to the house you are looking at. We are planning on fixing the roof (it's in really bad shape and needs to be fixed before winter), two bedrooms, and one living room right away and then working on the rest (kitchen, bathrooms, etc.) over time.

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