Which would you chose?

The bigger house with a higher mortgage with an apartment or a smaller house with a smaller mortgage that you would be comfortable with paying on only mine or dh's salary? I'm leaning towards the bigger house with the apartment so I can always in a couple of years convert the apt into more living space The house with the apt would be cheaper overall since we would have the income coming in.

Which would you chose?

I wouldn't want to deal with being a landlord, and I feel like it would give less privacy..so I would do the smaller house :)

Which would you chose?

Smaller house.

Re: Which would you chose?

Small house. I would never buy a house unless I could afford the mortgage on our own.

Re: Which would you chose?

Based on what you describe, the smaller house. We don't want tenants living in our house.

Re: Which would you chose?

Smaller for sure. You can always get a bigger house down the line when you can afford it on your own.

Re: Which would you chose?

Personally, I would choose a smaller house because I wouldn't want to be an onsite landlord who shares my house with tenants. But that's just me.

Also, when I bought my house, dh and I bought much less than we could afford at the time because I was pregnant and we thought that I might scale back from my career at a large law firm or switch careers down the line (which I did). I wouldn't have had the luxury of making a switch if I bought a larger house. So I always advise my real estate clients to be honest with themselves about changes that could impact their income in the future and bear that in mind when deciding how much to spend on a home.

As an agent, I see so many people who specifically want properties with income potential and it works out great for them. But in Nassau, where there are a lot of apartments within one family homes, I think people take a risk. That income can disappear in a heartbeat if someone reports the illegal apartment. Legal rentals -- two family homes, or an apartment with a permit in Suffolk -- can be lucrative. But if you find you don't like renting out part of your house (and if you've never done it, it can take some getting used to), it sounds like you will be stretched financially thin. And since you talk about converting the apartment to living space down the road, I don't think you are talking about a two-family home. I would maybe do some further research about being a landlord if you haven't done it before, and talk to some people who have experience with it, so you can really weight the pros and cons before jumping into it.

If you feel the smaller house is too small (and the only other option is buying a home but renting part of it out), then have you considered expanding your search to other areas that still have your key criteria? Usually, when it comes to price, house criteria (size, style, etc.), and location, buyers have to compromise on 1. They can get 2 out of 3. Unless you are a gazillionaire, I rarely see people get all 3 out of 3 without making some tweaks or tradeoffs.

Re: Which would you chose?

smaller house, I couldn't deal with tenants.

Re: Which would you chose?

The smaller house! I can't imagine buying a house just so I can share it with strangers.

Re: Which would you chose?

For us. Smaller. We didn't want to be landlords.

Which would you chose?

I have the opposite opinion to the other people who responded. We knew what our budget range was, on only 1 salary. We bought on the high end of the budget with an apartment. We have a plan and will have to stick to it strictly, but if all goes according to plan, the apartment will be converted back to our space a few years down the road. For us, it was the right decision. The house that we are buying is large enough without that space that we would not feel like we are sharing or losing out on anything in the house. We are not even sure if we will rent out the space yet. We may keep it for ourselves.

On a side note, everyone that we have told about this house says that they wish they had the option for a rental. None of them wanted it at the time, but now they wish they had it.

Message edited 7/1/2012 10:49:49 PM.

Re: Which would you chose?

I'd choose the smaller house.

Re: Which would you chose?

I'd choose smaller house as well.

When you have an apartment, there is no guarantee you will always have a tenant, let alone a good, pay on time tenant.

With the smaller house that can be paid for with either you or DHs salary - it's just easier on your mind.

Re: Which would you chose?

we had the same situation. we chose the larger house with an apartment. we choose our tenants wisely and we have never had an issue. we plan to convert the space into a play room/media room when we have kids that are old enough to enjoy it.

Re: Which would you chose?

Really think this one through. We have a 2 family and the rental portion has been nothing but trouble. Bad tenants, tenants who don't pay their rent on time or at all, no tenants for months at a time (even though it's a nice space and priced well), perspective tenants who are crazy (we had one lady who couldn't afford the rent but kept coming over and asking if she could live there anyway as she had no place to live - felt bad for her, but it was a bit scary!). I truly cannot wait to sell this house and be done with it. Since we can't seem to find a good tenant who will pay rent every month (we currently have a good tenant - in that they treat the space well and are nice - but are consistantly months behind in rent), I had to go back to work full time very quickly after having our baby... It's been nothing but stress and if I had it all to do over again, I never would have done it. Other people have had different experiences, I'm sure, but this was ours.

Re: Which would you chose?

I'd go with the smaller house. I wouldn't be good at having tenants.

Which would you chose?

Smaller house.

I have heard nightmare stories from a few ppl who went this route and then couldn't get a non-paying disabled tenant who went off their meds out for like, a year, because of their "rights". You don't always know who you are renting to.

Plus DH and I are loud. I'd feel like I'd have someone constantly in my business.

I know a few ppl as well who would think nothing of reporting someone to the town either if this is not a legal rental.

I wouldn't want to deal with drama from the neighbors. We have enough of it just living on LI ;).

Re: Which would you chose?

Smaller house for sure!

MIL has a high ranch and she rents out the lower level. Her 1st tenant (after buying the house) was a quiet family (mom, dad & baby). They moved out in Feb and it was vacant until this month. It was vacant (= zero income) for 4 mos (= $4,800).

We live with MIL (since March 2011) and have a (now) 5 yr old - I hated having to constantly keep him quiet, not jumping, not running, not hopping, not banging things, etc.

These two examples alone would make me chose a smaller house versus one with an apartment.

Re: Which would you chose?

Smaller. My husbands parents rented out their houses and had people not pay them and had trouble evicting them. It takes a long while, they can ruin your home.

Id take the smaller house.

Re: Which would you chose?

Smaller for sure.

I love the idea that you only need one salary and don't need to rely on a tenant if something happens.

Re: Which would you chose?

i would chose the smaller house since you would be comfortable with the payment regardless of a tenants income. We are currently renting out our first house (waiting for the market to come up hopefully) and although we haven't had many problems with the tenants, it adds a lot of stress thinking if they were to leave and we couldn't find a tenant. Paying for both mortgages would be a bit rough. I would much rather live with less stress and if eventually you outgrow the smaller home, you can move on or expand

Re: Which would you chose?