Wish you bought more house?

[99-venom]

I'm in the market to buy my first house here in the next few months. The housing market has been climbing pretty steady here in Austin, so the longer I wait the less house I can afford or the further I have to go out of town.

With that being said, I have an opportunity to buy my brothers house that is conveniently located less than a half mile from my work. The bad thing about it is its a little on the small side, single car garage and its coming up on that age where things like water heater, AC and roof might need attention in the next five years. The good, proximity to work and the price is well within my means.

My other option is to buy something new 5 miles south of where I work. The bad, House prices start bumping up against the top end of my price range and I will have to sit in traffic for up to an hour per day. The good, little bigger house and a two car garage.

The delta between the two prices is roughly 30-50k. Not huge, but I'm also not made of money and the extra savings from buying the cheaper house would be nice.

Ever wish you bit the bullet on cost and location to have a little better house?

 

[getTwisted]

Not really, but I'm sure everyone's situation is different. We purchased a bigger house than what we were looking to buy but it was a foreclosure so we got the house the same price as other smaller houses were selling for. There was nothing wrong with the house and the only thing we replaced were the floors and that was just for personal preference.

If I had the opportunity to save 20-30k and get a smaller house I would do it but only because my wife and I are in the market for a vacation home and that extra money would be nice to have for that.

In your situation you might initially save money on the home but it looks like you might be spending some pretty serious cash on preventative maintenance in the near future. So you may just want to go with the Newer/bigger home.

As far as the drive to work, my philosophy on that; live where you want, work were you have too (within reason obviously). However 5 mile drive to work and you might sit in traffic for an hour..lol I'm glad I dont live in a place like that.

Best of Luck.

 

[Blk04L]

Yes and no.

Yes because I would of liked to cut my commute in half, and have a slightly bigger garage. The AC coverage in my current place is more than enough for me right now/future.

No because when we were looking at the housing closer to work, it bothered how much we were going to pay purely for location. Almost the same exact house/finish/yard, but the place a mile from work would of cost an additional $150k more in price. Especially since kids are in the short term future, having a payment being 500-700 $ a month less definitely was a sticking point. Even had our closing costs paid for, while the other places didn't have that bonus.

For me, the no outweighed the yes due to being more than comfortable in our expenses. That extra money being "saved" is being thrown into additional principal as we are paying off the loan on an accelerated "15yr mortgage" instead of 30 years.

For you, if there are some potential big ticket items like the AC/roof that may need repair/replace, it may not be a bad idea to go new.

 

[2000gt4.6]

Half a mile to work vs a hour long commute, in traffic ?

1/2 mile is easy walking/biking distance to work. And homes are meant to be sold..buy it, pay it off and if it's too small sell it at a most likely good profit.

If I were you I'd take every dollar of that extra payment you were gonna make and dump it on top. 30 or even 15 year mortgages are for suckers.

 

[nxhappy]

don't worry about your first house being "too small". Of course it's small, it's your first house lol. Which is fine, because statistically, you will only live there 5-7 years anyway...only buy what you can AFFORD

 

[Blown 89]

I do but it's worth it not to be house poor. We are still working on downsizing. Our biggest problem isn't the size of the house but the lack of storage and no garage (car port).

 

[BrunotheBoxer]

Are you saying it would take an hour to drive 5 miles?

 

[99-venom]

The traffic in Austin has gotten increasingly worse the last few years. The Austin greater population has gone from one millionish to two millionish in the last 7 years. All of the people moving here have driven the prices up with outside money. The job market is good, but its not growing at the same pace as housing. My brothers house appraised for 125k two years ago, now its at 190k and trending upwards quickly.

The conservative side of me says go with my brothers place. The extra savings would be put right back into the principle of the house, so if I need to take a home loan for any kind of upgrade or repair, it should be within my means plus I wont be offloading my saving into the down payment.

The risky side of me wants a bigger garage for tinkering on my cars. I have always wanted a garage that big enough to just about work comfortably on my car.

 

[99-venom]

30 minutes either way during rush hour. Not horrible, but much worse than if I live a few blocks from work.

 

[99-venom]

don't worry about your first house being "too small". Of course it's small, it's your first house lol. Which is fine, because statistically, you will only live there 5-7 years anyway...only buy what you can AFFORD

This has been my thought process up until I started looking at homes. You make a ton of sense.

 

[venom_inc]

Are you saying it would take an hour to drive 5 miles?

If that's true, I'd move far away from that area.

 

[99-venom]

If that's true, I'd move far away from that area.

Austin traffic is ridicules! When school is out it speeds up a bit, but the rest of the year it sucks.

 

[c6zhombre]

Get an inspection on the old home, test the efficiency of it. Ask for 12 month utility bills. A roof, ac, hot water heater are not cheap and might just be the tip of the iceberg. If it tests out, great. If not, consider new. Texas is not friendly on electrical bills in summers (long summers at that). For example...I was in a 30 yr old 1800sq ft rent house at one point, tiny 2 car garage, the ac was old, electrical bill was near $400 per month and the unit barely got it to 79 with imo excessive humidity. I'm in a new 3000sq ft house now, 3 car garage, highly efficient insulation and radiant shield, super nice/dry 76 air quality...electrical bills are running $125. I guess you could retrofit the old home with some of the new tech, but just something to consider and factor in for old versus new and is it worth the commute (30 min doesn't seem bad at all)/initial down $$$. No right or wrong answer, just more factors to weigh when trying to figure out true costs of ownership...

 

[99-venom]

Get an inspection on the old home, test the efficiency of it. Ask for 12 month utility bills. A roof, ac, hot water heater are not cheap and might just be the tip of the iceberg. If it tests out, great. If not, consider new. Texas is not friendly on electrical bills in summers (long summers at that). For example...I was in a 30 yr old 1800sq ft rent house at one point, tiny 2 car garage, the ac was old, electrical bill was near $400 per month and the unit barely got it to 79 with imo excessive humidity. I'm in a new 3000sq ft house now, 3 car garage, highly efficient insulation and radiant shield, super nice/dry 76 air quality...electrical bills are running $125. I guess you could retrofit the old home with some of the new tech, but just something to consider and factor in for old versus new and is it worth the commute (30 min doesn't seem bad at all)/initial down $$$. No right or wrong answer, just more factors to weigh when trying to figure out true costs of ownership...

$130 during cool months and $230 (with water garbage and sewer) during hot months, but he runs a few big computer and a couple 60" TV pretty much none stop. I'm not as big of a gamer as he is. Good point though, I will definitely ask about having an efficiency test.

I'm pretty handy when it come to DIY. I've replaced hot water heaters and have done some roofing. I would prefer to pay someone else to do the whole roof just because it's freaking hot in Texas. I've never touch HVAC, but I have repaired automotive AC.

 

[nxhappy]

very important: are you married or is this just "your house" ?

 

[99-venom]

very important: are you married or is this just "your house" ?

Just me myself and I. I was taught to buy my my own house and any other large expenses before getting married.

 

[Screw-Rice]

I'd grab your brothers house, from the sound of things you'd be buying it under market value. Starting with positive equity right out of the gate is never a bad thing. If you have no need for more space on your first house then I'd take the one that will net higher value when I upgrade.

 

[BigFatMatt]

very important: are you married or is this just "your house" ?

Also need to consider what your plans are with the house, do you see yourself selling a few years down the road?

Depending on the local market, if the houses in your area are rapidly appreciating, it would be worth it to find the best deal you can and hold onto it long enough to make a good profit, then sell.

Sounds like you're pretty handy, I'd look for something with a few things to fix here and there in a GOOD LOCATION and flip it when the prices go up. As everyone always says, location, location, location.

As a first time home buyer, there are probably FHA options that would allow you to get a home for little to no money down, with a low rate, 30 year fixed mortgage. Why would you want one of these?? Because if you score a house in a good area for a good price, you can make a lot of money in just a few years with very little initial investment. Take the profit and put a large down payment on a much bigger, nicer place.

It took me a while to find the perfect house, but I ended up scoring big time with a brick house w/ 2 car attached garage and a full sized basement with a garage door... perfect for a workshop... but with over an acre of land I have the room to build a shop in the back yard, which is one thing I plan to do for both the work space and the investment value. I paid under $220k and I'm expecting to flip for over $300k in a few years once they extend the highway out here and prices go up.

My suggestion would be to wait a little bit while making sure everything is in order, so you can jump on a good deal when you see one. I like working on my toys too much to be without a nice garage... I had to wait around for months but I think it was worth it. I'm sure you can find something that fits the bill, and it sounds like you're in the right frame of mind, but I wouldn't settle on something without workshop space. You'll hate living there if you don't have room for hobbies.

 

[99-venom]

I'd grab your brothers house, from the sound of things you'd be buying it under market value. Starting with positive equity right out of the gate is never a bad thing. If you have no need for more space on your first house then I'd take the one that will net higher value when I upgrade.

There is definitely no need for more space just a want for more garage/work space.

Ideally, once my FoST is paid off (end of the year), I would like to plow a bit of money into this first home, so that I could turn it into rental property when I'm ready to purchase my next home. That would probably be the smart thing to do.

But, the tinkerer itch likes to get the best of me... guess I will need to find away to scratch some other way.

 

[99-venom]

Also need to consider what your plans are with the house, do you see yourself selling a few years down the road?

Depending on the local market, if the houses in your area are rapidly appreciating, it would be worth it to find the best deal you can and hold onto it long enough to make a good profit, then sell.

Sounds like you're pretty handy, I'd look for something with a few things to fix here and there in a GOOD LOCATION and flip it when the prices go up. As everyone always says, location, location, location.

As a first time home buyer, there are probably FHA options that would allow you to get a home for little to no money down, with a low rate, 30 year fixed mortgage. Why would you want one of these?? Because if you score a house in a good area for a good price, you can make a lot of money in just a few years with very little initial investment. Take the profit and put a large down payment on a much bigger, nicer place.

It took me a while to find the perfect house, but I ended up scoring big time with a brick house w/ 2 car attached garage and a full sized basement with a garage door... perfect for a workshop... but with over an acre of land I have the room to build a shop in the back yard, which is one thing I plan to do for both the work space and the investment value. I paid under $220k and I'm expecting to flip for over $300k in a few years once they extend the highway out here and prices go up.

My suggestion would be to wait a little bit while making sure everything is in order, so you can jump on a good deal when you see one. I like working on my toys too much to be without a nice garage... I had to wait around for months but I think it was worth it. I'm sure you can find something that fits the bill, and it sounds like you're in the right frame of mind, but I wouldn't settle on something without workshop space. You'll hate living there if you don't have room for hobbies.

This is my biggest worry about buy my brothers house. But, to be honest my work consists of 3 CNC mills and two CNC lathes (one with live tooling) along with a 3d printer, plus my boss encourages me to use them when I want just to have more practice at applying these tools. I can find other ways to scratch my tinker itch. My brothers have also told me that I can use their garages for small car projects.

Edit: If I wait too long I will be priced out of what I'm willing to afford for a first house.