|
Home Buyers - perfect but pricey, or fixer upper?
| Posted By |
Message |
karabara
LIF Adult
Member since 8/07 1153 total posts
Name:
|
Home Buyers - perfect but pricey, or fixer upper?
basically we found an amazing place that would need NO renovations in the entire apt, but it's about 100k more than we were looking to pay. We were hoping to be conservative and get a place on one salary but this place would require both of us to have a salary.
We found another place that is 200k less than the gorgeous one mentioned above, but it would need total renovations. we hate the kitchen, both bathrooms and would want to move walls to open up the space. Do we really save in the end? what are peoples' thoughts/opinions?
TIA!
ETA: We currently have two salaries, we are trying to be conservative financially, but I do have worries about whether we will be paying in other ways by doing this and in the end better off just buying a turnkey apt
Message edited 1/16/2012 3:32:13 PM.
|
Posted 1/16/12 3:30 PM  |
| |
|
Long Island Weddings
Long Island's Largest Bridal Resource | Prudential Douglas Elliman Real Estate |
SHOPAHOLIC
LIF Adult
Member since 1/07 1712 total posts
Name:
|
Re: Home Buyers - perfect but pricey, or fixer upper?
Is everything else equal? Area, square footage, layout, number of beds/bath etc?
Is your DH handy at all?
My feeling is that you can do a kitchen and two bathrooms for much less then 200k. Plus the interest over 30 years on that extra 200k you are spending.
Also with the home renovations you can do them over time as you have the money. You will also be building equity in the home. That would be my choice.
|
| Posted 1/16/12 3:36 PM |
| |
|
Katareen
5,000 Posts!
Member since 4/10 7180 total posts
Name:
Katherine
|
Re: Home Buyers - perfect but pricey, or fixer upper?
Do you think the cheaper house would require $200K in renovations? That is a lot of money. Plus, if you save for those reno's before you make them, you're not paying interest on that money (as you would on the more $$ house since it'll be in your mortgage).
As long as they were both in a great location, and had the property size you want, I'd go for the less $$ home.
|
| Posted 1/16/12 3:36 PM |
| |
|
Katareen
5,000 Posts!
Member since 4/10 7180 total posts
Name:
Katherine
|
Re: Home Buyers - perfect but pricey, or fixer upper?
Posted by SHOPAHOLIC
Is everything else equal? Area, square footage, layout, number of beds/bath etc?
Is your DH handy at all?
My feeling is that you can do a kitchen and two bathrooms for much less then 200k. Plus the interest over 30 years on that extra 200k you are spending.
Also with the home renovations you can do them over time as you have the money. You will also be building equity in the home. That would be my choice.
Great minds think alike  
|
| Posted 1/16/12 3:37 PM |
| |
|
ml110
LIF Adult
Member since 1/06 5435 total posts
Name:
|
Re: Home Buyers - perfect but pricey, or fixer upper?
i think it makes more sense to do the cheaper one. 200K A LOT cheaper- and i doubt you'll need to put 200K into the renovations. so you'll be saving money.
to me, its worth it- the lower the mortgage payment, the better!! thats how people get into trouble LOL
plus... really think about how "bad" the kitchen and bathrooms are. i think sometimes people get too hung up on the way things look. As long as the kitchen and bath are usuable, you can space out the renovations. like save up and do the kitchen this year, do one of the bathrooms next year. you could also save money by doing some of it yourselves, if you're handy.
haha then again, we're on our second fixer upper LOL i dealt with a golden yellow toilet/tub/sink with flowered linoleum floor for almost 4 years till we could afford to redo it. BUT, our mortgage payment is really low, and thats what matters to me
|
| Posted 1/16/12 3:49 PM |
| |
|
karabara
LIF Adult
Member since 8/07 1153 total posts
Name:
|
Re: Home Buyers - perfect but pricey, or fixer upper?
GAH! I just wrote four paragraph response and lost it!!! 
So here goes the second version:
I think you have all helped me make my decision. Thank you for all your comments! We are first time homebuyers and don't have a clue to the costs of renovations, and your other comments were very helpful to think about.
DH is not handy at all, but my dad and uncles are, and I am willing to learn. I hesitate on this b/c I know I will end up having to manage this aspect of the home, and frankly DH and I struggle with what I view as lack of motivation around doing anything substantial around the home. He refused to even hang a curtain rod for me the other day, and took two years to hang hooks for me, and when he did, it wasn't right - you can't put coats on them b/c the hooks fall out of he wall. (it's a sore point in our relationship)
I think having some financial security is more impt to me. We are both in corporate and I was laid off in 2008 and took two years to find a permanent job. So I think knowing it's unlikely that renovations would be 200k is comforting!
Another question = so can doing renovations really increase the value of a home? How is that? I always thought a property was worth a certain amount regardless of what the inside looked like, and that only things like lot size, whether you have new furnace etc impacted the value. but again I really have no idea about how these real estate things are estimated.
Message edited 1/16/2012 4:12:50 PM.
|
| Posted 1/16/12 4:12 PM |
| |
|
Katareen
5,000 Posts!
Member since 4/10 7180 total posts
Name:
Katherine
|
Re: Home Buyers - perfect but pricey, or fixer upper?
Posted by karabara
Another question = so can doing renovations really increase the value of a home? How is that? I always thought a property was worth a certain amount regardless of what the inside looked like, and that only things like lot size, whether you have new furnace etc impacted the value. but again I really have no idea about how these real estate things are estimated.
Well if you're going by Zillow or something like that--if the home hasn't been sold recently they can really only estimate its value. They have no idea if the house has been fully remodeled or is in original condition.
If a house in original 1950's condition were for sale, and the house nextdoor (identical house style, property size, layout. etc) was also for sale but fully renovated--the 2nd house would absolutely be worth more money!
|
| Posted 1/16/12 4:24 PM |
| |
|
CSK
LIF Adolescent
Member since 9/11 892 total posts
Name:
|
Re: Home Buyers - perfect but pricey, or fixer upper?
Posted by karabara
GAH! I just wrote four paragraph response and lost it!!!
So here goes the second version:
I think you have all helped me make my decision. Thank you for all your comments! We are first time homebuyers and don't have a clue to the costs of renovations, and your other comments were very helpful to think about.
DH is not handy at all, but my dad and uncles are, and I am willing to learn. I hesitate on this b/c I know I will end up having to manage this aspect of the home, and frankly DH and I struggle with what I view as lack of motivation around doing anything substantial around the home. He refused to even hang a curtain rod for me the other day, and took two years to hang hooks for me, and when he did, it wasn't right - you can't put coats on them b/c the hooks fall out of he wall. (it's a sore point in our relationship)
I think having some financial security is more impt to me. We are both in corporate and I was laid off in 2008 and took two years to find a permanent job. So I think knowing it's unlikely that renovations would be 200k is comforting!
Another question = so can doing renovations really increase the value of a home? How is that? I always thought a property was worth a certain amount regardless of what the inside looked like, and that only things like lot size, whether you have new furnace etc impacted the value. but again I really have no idea about how these real estate things are estimated.
Not to take an opposing view point here, and granted I don't know how much 200K is to the purchase price either, but here goes...
as a person who is somewhat handy and who comes from a family who is handy, you should not get the cheaper place.
Lets start off with how much are these places? 200K is a lot of difference on a 300K apartment, not as much on a 1M plus.
How nice is this more expnsive place and does it have other things going for it? I guess what I'm saying is, in most cases I'm not seeing 200K differences on identically sized, locationed properties at lower price points.
can you afford the more expensive place comfortably?
I'm not particularly comfortable with my mortgage on my 1 corporate salary unfortunately, but with a little extra income from my wife but we are able to pay it every month.
My main comment as to why yoiu should run from the first place is
1) your DH is not handy, and doesn't seem willing to learn.
2) you don't make it sound like you need just straight rip one thing out put new one in type of renovations, you want to remove walls, reconfigure space, that in and of itself is not cheap.
3) again, I don't know what price bracket you are playing in, but if you're putting in nice finishes, costs add up quick, people make it sound like 200K is a crazy number, and it is large, but I wouldn't count on being able to do your kitchen 2 bathrooms, reconfigure space, wood floors, tile floors etc for $25-50K. The number is probably closer to 75-100K+ with some nice finishes, and possibly more.
again, I don't knwo the sqfootage location, finishes or price range you're playing in, but I wouldn't automatically assume that you can make A look like B for less than the price diff.
If you and DH aren't looking for an adventure, renovating is costly, messy, stressful, timeconsuming and I swear is going to take years off the backend of my life..... if you're not up for it, you want something done, period. maybe the price difference on these are too extreme, and you need to find middle ground....
but a full gut renovation is for 2 types of people, the niave and the very experienced, those that are too green to know what they're getting into and the huge painful expensive process it is, or those who have been there done that and aren't scared.
|
| Posted 1/16/12 8:15 PM |
| |
|
|
|
Re: Home Buyers - perfect but pricey, or fixer upper?
Posted by karabara
Another question = so can doing renovations really increase the value of a home? How is that? I always thought a property was worth a certain amount regardless of what the inside looked like, and that only things like lot size, whether you have new furnace etc impacted the value. but again I really have no idea about how these real estate things are estimated.
When valuing a home, the size of the house, the number of rooms, the lot size, etc, is all very important. But renovating/updating kitchens and bathrooms also add value. We always say that to an appraiser, a room is a room. Meaning an appraiser won't care if there's ugly wallpaper or neon green carpet v. tasteful Benjamin Moore paint and gorgeous hardwood. But kitchen and bathroom renovations are capital improvements and certianly do add value.
With any renovation, you can never expect to get back your investment dollar for dollar (especially if you are looking at a co-op or condo). But if you compare two 3 bedroom, 2 bath colonials on a 60 by 100 lot, and all other things are equal, but one has a 1970s kitchen and the second has a newly renovated kitchen with granite counters, new wood cabinets, and stainless appliances, number two will be worth more, of course!
As far as your situation, I think a lot of the points made were valid -- renovations can be more costly and time consuming than expected. And it's not as if you buy the cheaper house, that you will have the $200K difference in cash at your disposal to do the work immediately.
HOWEVER, I believe that the most important thing is to stay within your financial comfort zone. So I would go with the less expensive property, if it's really just lacking the aesthetics of updated kitchen and baths (but is liveable and in working condition). You can do that work, in time, to your own taste, and when you have the financial ability to do it.
My dh and I were conservative when we bought our home, because we knew I might not stay at my high income job forever. I did make a career change and I am VERY glad that I had the opportunity to do that. I would not have had that freedom/luxury if I had bought at the top of our budget.
|
| Posted 1/16/12 8:32 PM |
| |
|
BeachGal
LIF Adult
Member since 2/10 2827 total posts
Name:
J
|
Re: Home Buyers - perfect but pricey, or fixer upper?
I would go for the fixer upper. After living in the perfect house you will probably want to start changing things anyway. My house was considered "move in" condition and it was but after living there is got uglier and uglier by the second so we started renovating and renovating. We save up for each project so we pay for it in full. The extra $200k plus interest will add up to a lot more over 15-30 years. It is very expensive to fix up a house though if you have to pay for labor but if you can do it little by little I would get the cheaper home.
|
| Posted 1/16/12 9:13 PM |
| |
|
Potentially Related Topics:
Currently 78910 users on the LIFamilies.com Chat
|
Long Island Bridal Shows
|
