Its tough to pick a house!

madmax

In my new area housing is cheap. Add to that nothing is selling so all of them have been tweaked into absolutely perfect condition to try and grab the attention of a buyer. For what I absolutely need (as a single guy) any of them would be fine and actually quite an upgrade from what I had in the higher cost area I used to live in.

So, I keep looking for bigger and nicer places. When do you say thats enough? I'm torn between going all out or being minimalistic. There doesn't seem to be a whole lot of difference in price. For example, $200K buys a perfectly new looking 2500 square foot house with all the standard equipment in a nice area. $300K buys a 4000 square foot house with the granite counter tops, wood floors, lofts, tile, more internal design, even nicer area etc. They all have about the same amount of land.

Here is the real question in my mind. I'm thinking things will take an upturn over the next 5 to 7 years. With the fairly low interest rates and the currently low housing prices it actually seems reasonable to me to over-buy (still staying in my comfortable price range) now and make a good profit when things turn around. I really don't need all that extra room and glitter. Any advice?
madmax

danger boy

think about it this way.. even though you are looking for a new house in your new city.. what about 5 yrs, 8, or 10 yrs down the road when you want to sell it? what will people be looking for? One with granite counter tops and wood floors, tile, etc is going to be easier to sell then one without.

buy a big house.. so we can all come and visit you.

F1nut

Buy one with more land than most as they aren't making anymore of it. Seriously.

Besides, it'll give you more options for the bodies.

madmax

One thought was to buy an awesome piece of expensive land with views in the mountains and live in a trailer for awhile. That would get old really fast and I would have to store most of my stuff. I actually found some places I couldn't quite get to in my Camaro but most are right off a highway. Oh man, the views are awesome!

hearingimpared

I second the more land idea. God isn't making anymore land so that will be the shortage 10 years from now and will be selling at a premium.

Chuck when I was house searching, I needed three things; 1. a room big enough for my 2 ch rig; 2. privacy; 3. BIG master bedroom.

Hope this helps.

mule

I would say to look for a good house rather than a big house.

I bought a dumpy house with a good location for me and acreage, that was mostly because I needed area to build my dirt jumps and bmx track and I didn't have the .5 mil or above to buy a good house in my area

But every time I pull up my driveway and look at the crappy vinyl siding it makes me sick.

I would say to look for a house that has a masonry exterior, stone, brick or stucco.

It is a lot easier to replace carpet with hardwood or put in granite counter tops than it is to rip off vinyl siding and put up stone or stucco.

Phasearray

madmax wrote: »

Here is the real question in my mind. I'm thinking things will take an upturn over the next 5 to 7 years. With the fairly low interest rates and the currently low housing prices it actually seems reasonable to me to over-buy (still staying in my comfortable price range) now and make a good profit when things turn around. I really don't need all that extra room and glitter. Any advice?
madmax

If by upturn, profit, and turnaround you mean realestate will rebound and go up in price in 5-7 years I kinda disagree. The ratio of a family's medium income in a neighborhood to the average house that family can afford is very stable with the exception of the past 4 years caused by the fed's interest manipulation.
The only real way that realestate goes up is if the neighborhood all of a sudden becomes a more desirable place to live in. If realestate really did go up, then eventually the average family wouldn't be able to afford it and there would no buyer.
I would only view realestate as an investment if the equity or rent you gain from the house outpace your rent saving.

Phasearray

I'm in the same shoe your in. All the hidden cost of home ownership is beginning to finally dawn on me. Taking into accout tax, higher utility bills, insurance, mortgage payment I would save $15-$20K a year not feeding my income into a house. If it takes 5 years to recover, thats almost an extra $100K I can throw into down payment.

wingnut4772

How can you not just be drawn to the granite counter tops and all the other house bling? If you can comfortably afford it, the nicer house will have a better resale down the road. Assuming, of course, that the world doesn't end in a fiery Apocalypse in the next few years.

madmax

wingnut4772 wrote: »

How can you not just be drawn to the granite counter tops and all the other house bling?.

That is the bad part, I had zero interest in that stuff until I started exposing myself to it. The more you look the more you want. Yesterday I looked at a place with an RV garage. I don't have or even plan on ever having one but I thought it was cool.

Oh yea, I got hooked on HGTV this week as well. I can't seem to change the channel.
madmax

Early B.

Max, you're definitely thinking about the home purchase from the proper perspective -- investment. That being said, you're in a win-win situation, so buy what you like and a little bit more than you need. Don't buy too much house because you'll want to maintain some cash. A larger home will drain your bank account every month. Settle on a dollar amount and don't go beyond it.

Take a woman with you while you house hunt to help you decide. You may not be single forever, and you'll want a woman's viewpoint. They'll see things you couldn't give two dick shakes about.

You're in a very fortunate position. Good luck.

markmarc

First, you're buying at a perfect time, the best buyers market in 15 years. You can be very picky. if your area is like most of the country, smaller lots with bigger homes are what is going on with new construction. Ranches are rarely built anymore and will be a hot item as the medium age rises. That being said, having bought four homes in my time here is how I'd put my priorities in order.
1. Quality of neighborhood- a nice house in a lousy neighborhood will never be enjoyed. Look for how yards and exteriors are taken care of.
2. Lot size- My current home sits on 11,500 ft lot and backs up to a berry field. The average new lot in Portland is 3,000 ft in my price range (insanity!).
3. Foundation- No amount of money can truly fix a bad foundation and you'll get hit hard on resale.
4. Kitchen- A contemporary kitchen will save $20K versus having to remodel one. BTW, granite countertops vary in quality, some require yearly maintenance.
5. Plumbing- Avoid older homes that used galvanized plumbing, we didn't and spent $7k on replacement.
6. Windows- Avoid single pane with storms. In older homes many owners have replaced with double pane, look hard at the quality of replacement windows and installation.
7. Furnace- A recently replaced furnace versus an older original one will save you half on heating bills.
8. Roof- how old is the current roof? On average a roof lasts 20-25 years.
9. Master bedroom- This is where older homes get killed compared to new. Older MBR's are smaller and less likely to have walk-in closets. Plus the master bath won't have the space women like. On the plus side, the second and third bedrooms in homes from the 70's and 80's are larger in many cases, meaning that a queen bed can easily work, a plus for for married guests.
10. Flooring- Replacing old carpet/linoleum can get expensive especially if quality is important.

shack

I would buy the best NEW house you can afford. Chances are you will get a good deal in doing so. To a builder/developer their new homes are just inventory. Just like any other business, they have to move it and it should be a bargain right now. There are many advantages to buying new and #1 is that it's NEW, has warranties on the equipment, etc...etc... Your cost of ownership over the next few years should be limited to utilities, taxes and mortgage payments. I would hesitate to buy a home from someone about to be foreclosed on or someone that HAS to sell. Why? If they can't afford the house there may be many unforeseen maintenance issues that could crop up...even after a detailed home inspection. If you like to do home improvements and so forth, that's fine...but the term "money pit" is legitimate. Besides, do your REALLY want to spend you weekend being a handyman/carpenter? Wouldn't you rather spend time seeing the beautiful country around you or playing with your rig?

Be careful of the "bling". Today’s must have features ad expense and in a few years are no longer the "IN" thing. Granite countertops are nice...but are they any better than some of the manufactured stone? Subzero refrigerators are nice...but are they that much better than a GE or Frigidaire? The big thing is HUGE kitchens cause there is lots of "bling" in there but most buyers find out they use very little of what's there and it adds lots of expense. Same is true for the huge bathrooms.

IMO....the bottom line is to buy the best home you can afford that will meet your needs and "style" (whatever that is). Don't overbuy because it might be a good investment down the road. There are lots of people selling "good investments" at significant losses today.

Good luck in your search.

amulford

I am looking for a house myself, and I am being VERY picky. I don't want BIG, just means more maintenance. To me, I want a decent kitchen, because I like to cook, but not huge. Maybe a little space in the laundry room to store.

As far as land, 1-2 acres, tops. Trust me, I know how much of a PITA big places are. You don't want or need the hassle.

My other want/need is a decent garage/shop. I can do pretty much any kind of remodeling or upgrading you could imagine, but you NEED to have someplace to work out of, and taking over part of the house don't cut it...

daniel_paul_

Early B. wrote: »

Take a woman with you while you house hunt to help you decide. You may not be single forever, and you'll want a woman's viewpoint. They'll see things you couldn't give two dick shakes about.

+1
most homes are ultimately chosen by the wife. They are the target market.

Keep school districts in mind. This can make a 5-10% difference in resale for the same house.

I agree with everything markmarc said. Windows are a good indicator of the quality of the whole house. Be sure to check these and plumbing on new houses. Some new homes are built so poorly. Make sure the hot water comes from the hot side, the water drains properly, etc. In new developments ask the neighbors if they have had problems.

wingnut4772

madmax wrote: »

That is the bad part, I had zero interest in that stuff until I started exposing myself to it. The more you look the more you want. Yesterday I looked at a place with an RV garage. I don't have or even plan on ever having one but I thought it was cool.

Oh yea, I got hooked on HGTV this week as well. I can't seem to change the channel.
madmax

HGTV is all I ever watch.

phuz

Land is a big one. If you can get at least 10,000 sq ft. lot in a development you're doing ok. The bigger the better. It can be hard to find something like that these days. This is the only thing that bugs me about my house (7500 sq ft lot, ugh).

Get a house that has most if not all of what you want in it already. Fix ups and additions will cost you in the long run. I'm talking all the way down to light fixtures, ceiling fans, cabinets, bath fixtures, crown moulding, designer paint, sprinkler system, hardwoods/stamped and acid washed concrete, tile, landscaping, pre-wire for data/internet/voice/surround sound, patios, decks, etc. You will be very suprised how much these little things will effect your quality of life down the road as well as your resale value when you are ready for that front.

You don't want to buy a plain house and add all of these things later! Also, these are the things that will make your house stand out amongst comps in the area when you're ready to sell.

New home builders are giving away a lot of this stuff right now. Now is a good time to buy. Good luck and update us when you are done!

BAD ASP

I am no expert but I would offer the folllowing. If you buy as an investment, ask what will make the property hold its value or appreciate in value. Land and homes in the "path of progress" will appreciate. Homes in established areas with great schools and community development will always be in demand. Well established neighborhoods have most of the infrastructure in place and therefor capital development for roads, schools and utilities has already been put in place thereby limiting large tax increases to support new development. If you are buying in more rural areas what are the adjacencies to transportation and roads. What community services are provided in your tax bill and what are "add" costs. Just a few random thoughts..........

cfrizz

As usual Shack is making the most sense.

I feel that looking at your home as an investment is the wrong approach. The main thing you should be concerned with is will you be HAPPY living there no matter what the value of it is at any given time. Especially since the value of it is NOT guaranteed.

Do you have all the space you need? Do you have storage space? Are you in a good neighborhood? Do you really want a fixer upper or do you just want to move in, sit back & enjoy without worrying about the next big outlay of cash to FIX something.

On top of the mortgage, what is it going to cost to heat, pay for water, keep cool, insurance, plus all other regular monthly expenses. No point in being house rich & cash poor once all expenses become apparent.

If you are happy living there, have everything you need, and can afford it without strain & worry then all is good. Now if you happen to make a profit when you sell it, that's gravy but should not be the only factor taken into consideration.

candyliquor35m

I try to only buy what I need especially if you can pay cash for it. Right now there are better investments than a house I think. I have a 3 year market linked cd (copper, aluminum, nickel, crude oil, unleaded gas, agriculture) that's up 16.88% as of today. PM me for details.

MikeC78

cfrizz wrote: »

I feel that looking at your home as an investment is the wrong approach.

I'd have to disagree with that statement. A home is an investment in my book, it's the largest purchase you usually make in your lifetime. Houses are not cars.

With the prices of home these days, I'd personally get the "most" house you can afford. Get something you will be happy with, and also consider the taxes that go along with it. I'm still kicking myself for the house I bought, I was in Iraq during the whole transaction.:(

If I had to do it all over again, I'd have a 3k Sq/ft house, 3 car garage, and NOT live in a subdivision. I hate backyard neighbors, and would like some privacy every once in awhile. I feel like I have 5.1 lawnmower surround sound going on the weekends.:eek:

bobman1235

I agree with Cathy; yes a home is an investment, but if you look at it SOLELY as an investment it's not your home. Your first priority is to have something that will make you happy, within reason; then you worry about the investment. Because if you buy a house that doesn't make you happy, and you're ready to dump it after two years for your profit, but the housing market is in the tank, what are your options? Stick it out and be miserable for another few years and hope the market turns around? What if it doesn't? How long do you while away in your "investment"?

I'm not saying it's not important to consider the investment angle, it just wouldn't be my number one priority in such a volatile market.

MikeC78

Yes, but you think the economy is going to be in dumps forever? With such a pessimistic attitude like that, you are right. That can go the same with stocks, but I believe now is one of the best times to buy. People who buy and sell when when the value drops, are the ones that get into trouble.

I'm not telling him to go out and go over his head, just get something you want and not be regretting once you move into it.

bobman1235

MikeC78 wrote: »

Yes, but you think the economy is going to be in dumps forever? With such a pessimistic attitude like that, you are right.

I'm sure it will eventually go up, but how long do you want to stick it out living in a home that you don't like for the sake of your investment?

It's just my viewpoint; anyone who is investment-minded will think I'm a moron, and they're probably right. But most reasonable homes are going to make money in the long run; if you want the house, someone else will want it when you're ready to sell, unless you're dumb and buy something that's falling apart. When I buy a home, I'd think "if I never moved, would I be happy here" and the answer better damned well be yes. If the place doubles in value and I feel like moving, then fine, but I'd rather be happy in my modest home than miserable but sitting on a pile of money.

Demiurge

A house should be an investment and a place you want to come home to. Not sure why it needs to be one or the other. Not hard to find both if you just look around, especially right now.

shack

Your personal home is a very poor investment. Homes are illiquid and they are more of a savings tool vs investment. If that is the case why do people seem to think their home is such a windfall? It's because they tend to think short term. In the period of time between 1999 and 2005, the value of homes did beat the stock market with home prices increasing by 56% and the market stayed flat. As of today it is hard to say which has taken the greater plunge. However in the long term...THERE IS NO COMPARISON! From 1980 to 2005, home values increased 247%. A pretty good rate it would seem. However that is similar to the rate of return of Money Market accounts or Treasury Instruments. Over the same period, however, the S&P 500 shot up more than 1,000%.

People who buy homes because they think they will be worth so much in the future are simply making a bad decision. There are factors that they have no control over...like when to sell. Often one must move for a job or other factors. At that time the home probably must be sold, regardless of what the market is doing. Want to take advantage of the big value gain in your home? You can sell it when it is at the peak...but chances are you must buy another home and probably pay as much or more than the one you sold. The market or the economy in your part of the country is also something you can't control. Ask the folks in Detriot how that home "investment" is working out. Same can be said for LA and Miami.

As I said...homes are a good way to create assets much like savings accounts. Slow steady and relatively safe (over the long run). As an investment tool commercial R/E or equity markets are much better options.

MikeC78

Demiurge wrote: »

A house should be an investment and a place you want to come home to. Not sure why it needs to be one or the other. Not hard to find both if you just look around, especially right now.

Exactly! Now is a great time to deal and walk away if you can't.

PolkWannabie

shack wrote: »

However in the long term...THERE IS NO COMPARISON! From 1980 to 2005, home values increased 247%. A pretty good rate it would seem. However that is similar to the rate of return of Money Market accounts or Treasury Instruments. Over the same period, however, the S&P 500 shot up more than 1,000%.

247% of what ? Total Value ?

Given that most people don't buy houses outright that number is somewhat misleading ...

For simplicity ... Assuming one bought a $100k house with 20% ( $20k ) down ... Then that 247% increase on the purchase price is a $247k gain on what was a $20k investment ... There are of course mortgage, taxes, insurance and upkeep costs but the first two are for the most deductible and there would of course be costs to live wherever so from the perspective of owning versus renting those should be a non issue ...

Willow

We bought our most recent home last July. It's only 2yrs old now. It's a bit more than what we needed,we are only 2 but it has 4bdrms and it's 2100sqft. People ask us all the time, why did you buy such a big house. We did not intend to, the moment we walked in if felt like home. We are also fortunate that it has tonns pf upgrades. Again friends and some family ask, s, what are you doing to your house...answer is always the same, NOTHING! (well we painted some rooms and changed light fixtures and little crap), it's another reason why we bought it, we didn't want to live in construction. When we come home we want to put our feet up and chill not think, ok must get this done, then that oh yeah and this....
Sure we paid more for our house then the people who ask us those questions all the time, but they are spending lots of money and time fixing their houses.

We lucked out, there are not many 4bd homes in our area most 90% are 3bd and ours is also the biggest model as well. Again we were not looking for this at the time, we actually were looking at the smallest model, but none were available.Things add up fast, from insulated garage door, to tiles on the floor and backsplash.... Make a list of what you need in your house, what you would like and what would be nice. When walking through check off the items or make a mental note, in the end this will help you.

All that to say, buy what feels like home and what's very comfortable. As someone else mentioned buy something that makes sense, in terms of floor plan, which makes sense to you and to your life style. Oh and remember, you will NEVER find the perfect house.

Sorry for the long post.....if it doesn't make tonns of sense, blame my meds...

seeclear

Depending on how long you plan to be there, I would definitely stay away from wood exteriors and look for stone or stucco. MUCH lower maintenance here in the high UV exposure of the mountains. I don't know where you were coming from, but the sun exposure here is much greater than most other places. Also, don't think of air conditioning as a must have, altho you may use it a little down at the lower elevation of Ft Collins compared to where I live, but you would probably use it a few days a year at most. Remember CO is very dry, and therefore feels cooler even when the mercury hits in the 90s. And at night it will reliably get down into the 60s to cool the house off in between the hotter days.

MikeC78

Or grab a piece of land and build your own, that's what I will be looking into next. Some areas have 5 year tax-free options for new homebuilders. I know someone who does this and makes a good chunk of change doing it, he builds them then sells in five years.