Buying house, fixer upper or move in ready?

[Sabrefan]

DH and I decided after our Disney trip in August we are going to buckle down and buy our first home. We've been renting the same place for 12 years now (cannot beat the rent for the neighborhood we're in) - well the landlord went through a divorce and has been very negligent with the property and has mentioned a few times he wants to sell it. We decided its time to get our own place so we dont face any surprises. (we do not want to buy this property it needs MAJOR foundation work, new septic system etc. just not worth it)

Anyways, the problem is the neighborhood we live in would be considered a very affluent neighborhood, we have excellent schools and I reallly love the community, the problem is we are not rich Most of the houses are $250+ up to several million. Our top (comfortable) budget considering taxes in that neighborhood is about $160k.

I have seen houses move in ready in our price range in this school district, but they do need cosmetic updates.

I have also seen houses around $100k that need alot of updates (I dont know that they are just cosmetic)

DH wants to move into a move in ready house. I kind of want a fixer upper. Reason being, if I am going to update the $160k house for what I want anyways, why not do it to a $100k and have a really low mortgage? Doesn't that make sense? Am I crazy?

I'm afraid if we get a $160k house, it still wont be what I want (paneling on the walls, needs new carpets, new flooring etc.) and it will take us many years to get it how we want it, and probably have to sacrifice some future Disney trips

However, if we get the $100k house, we can probably do updates fairly quickly and afford lots of Disney tips with the lower mortgage.

I'm kind of looking at houses for the layout, location and square footage - everything else can be changed right??

Moving to a different school district is not something either of us are willing to do, so we just need to make a decision on what kind of house to buy here.

SO ....advice?

 

[akcire]

Part of this really depends how handy "you" the collective you are, and your willingness to do stuff.

Typically I purchase mutiple properties a year. I look for good location, schools, backyards, proximity to parks. I want houses that are structurally sound with a minimum of one foot roof overhang on all sides. I prefer attached garages. I will not buy a home without a basement. In my area I typically buy homes for $100,000 under the neighborhood averge.

I am looking at houses that need new everything. Generally they were well maintained, but they are original everything--think 1965 kitchens. Typically I replace roofs, heat/ac, kitchens, bathrooms, carpets. My "normal" budget for updating a house is $50-60,000. Keep in mind I have existing connections and do much of the labor myself. I normally have a ridiculous amount of wallpaper to remove--or as I say "dedecorate". I generally will not buy a house that needs new windows. In my area carpenters are very expensive and the cost of window replacement can be in excess of $25,000.

This is how I buy houses for investment and it is also how I buy my personal homes. Currently we are looking for a new home, and this will allow me to get a house with all the features I am seeking without paying top dollar.

Let me know if you have any questions. Don't forget the house mortgage is deductible off your income taxes which will make it more affordable than your rental situation.

 

[Sabrefan]

Part of this really depends how handy "you" the collective you are, and your willingness to do stuff.

Typically I purchase mutiple properties a year. I look for good location, schools, backyards, proximity to parks. I want houses that are structurally sound with a minimum of one foot roof overhang on all sides. I prefer attached garages. I will not buy a home without a basement. In my area I typically buy homes for $100,000 under the neighborhood averge.

I am looking at houses that need new everything. Generally they were well maintained, but they are original everything--think 1965 kitchens. Typically I replace roofs, heat/ac, kitchens, bathrooms, carpets. My "normal" budget for updating a house is $50-60,000. Keep in mind I have existing connections and do much of the labor myself. I normally have a ridiculous amount of wallpaper to remove--or as I say "dedecorate". I generally will not buy a house that needs new windows. In my area carpenters are very expensive and the cost of window replacement can be in excess of $25,000.

This is how I buy houses for investment and it is also how I buy my personal homes. Currently we are looking for a new home, and this will allow me to get a house with all the features I am seeking without paying top dollar.

Let me know if you have any questions. Don't forget the house mortgage is deductible off your income taxes which will make it more affordable than your rental situation.

Thanks for all the input!!! I am definitely one to finish I started but since we've only been renters we've never had a project like anything we would be doing in a home (we've painted but thats about it)

I do have a question about the mortgage being tax deductible, I thought ti was just the interest that was tax deductible?

 

[ilovemk76]

DH and I decided after our Disney trip in August we are going to buckle down and buy our first home. We've been renting the same place for 12 years now (cannot beat the rent for the neighborhood we're in) - well the landlord went through a divorce and has been very negligent with the property and has mentioned a few times he wants to sell it. We decided its time to get our own place so we dont face any surprises. (we do not want to buy this property it needs MAJOR foundation work, new septic system etc. just not worth it)

Anyways, the problem is the neighborhood we live in would be considered a very affluent neighborhood, we have excellent schools and I reallly love the community, the problem is we are not rich Most of the houses are $250+ up to several million. Our top (comfortable) budget considering taxes in that neighborhood is about $160k.

I have seen houses move in ready in our price range in this school district, but they do need cosmetic updates.

I have also seen houses around $100k that need alot of updates (I dont know that they are just cosmetic)

DH wants to move into a move in ready house. I kind of want a fixer upper. Reason being, if I am going to update the $160k house for what I want anyways, why not do it to a $100k and have a really low mortgage? Doesn't that make sense? Am I crazy?

I'm afraid if we get a $160k house, it still wont be what I want (paneling on the walls, needs new carpets, new flooring etc.) and it will take us many years to get it how we want it, and probably have to sacrifice some future Disney trips

However, if we get the $100k house, we can probably do updates fairly quickly and afford lots of Disney tips with the lower mortgage.

I'm kind of looking at houses for the layout, location and square footage - everything else can be changed right??

Moving to a different school district is not something either of us are willing to do, so we just need to make a decision on what kind of house to buy here.

SO ....advice?

How handy are you and your DH?

Do you want to give up weekend after weekend fixing the house?

If the house is older it could have major problems with the plumbing, electrical and structure. The $100K house could end up costing more than the $160K house. Have you ever heard of the money pit? Some house are just that.

 

[I loveStitchnippyjon]

We bought a (less expensive) fixer upper, thinking it would take DH (Mr. Handy Man) about 8-10 years to make the house into what we wanted.
Two words.......TWENTY YEARS!!!
Now that everything is replaced/repaired/remodeled, we have to start again with the first rooms we did, because they are now outdated!

 

[HM]

Go for a move in ready. Make priorities about what you would like to fix about it and do them over time. We hated the kitchen wallpaper in our last house. But, we lived with it for eight years before we redid the entire kitchen. You can live with things that are "ugly" or just cosmetic, but it's hard to live in a house that needs major work right away. Plus you'll have more time to "live with the house" and really decide what you want to do to it (what works and what doesn't and how you can fix it).

 

[akcire]

Thanks for all the input!!! I am definitely one to finish I started but since we've only been renters we've never had a project like anything we would be doing in a home (we've painted but thats about it)

I do have a question about the mortgage being tax deductible, I thought ti was just the interest that was tax deductible?

Look at an amoritization table. Most of what you pay on your mortage in the beginning years is interest. Additionally the property taxes are deductible.

 

[ariel71]

Of course it depends on the property, but I think you have an unrealistic (or naive) expectation about what fixing a fixer-upper may actually cost and the effort involved. I don't live in a fixer-upper but recently renovated my small 8x10 ft kitchen. Down to the walls but no change in footprint, lowest cost granite, fairly cheap cabinets, mid-range appliances. Found out electrical needed to be rewired. Total cost was around $20k, and that was with a Groupon that probably ended up saving me at least $5k in labor.

As a prior posted mentioned, the more work that has to be done, the more likely you are to run into code violations and/or more serious structural issues. Air conditioner, furnace, roof, hot water heater, etc. may need to be replaced sooner. You may need to rent or buy specialized tools or pay for skilled labor. Having parts of the house limited or unusable for longer periods of time can be a major pain the butt. I would recommend watching some of the renovation shows on HGTV or the DIY Network to get some better insight into the pros and cons.

The more cosmetic things you note regarding the move-in ready house can mostly be done yourselves on the cheap as time permits.

 

[englishteacha]

Our house was tiny and cheap ($62K in 2002). The downstairs was in great shape, but dated. (1985 called and wants their paneling back!) The upstairs needed new windows, insulation, sheetrock, etc. For our cheap mortgage, and the fact that we're handy, we were able to do a lot of the work ourselves within the first year. The downstairs is still dated. We've been here 10 years and we're putting an addition on to make room for baby, as this is only a 2 bedroom home and my DH needs an office space for his business. We thought about moving but we couldn't afford what we really wanted unless it was a major fixer-upper. We don't have the time with a newborn to fix stuff!! And I'll be living with paneling for a while longer. So while this isn't our dream house, the fact that it was, theoretically, move in ready (for the most of the house) made it much more appealing because, while the upstairs needed work, we knew we could live with it as-is for a while if we had to, and we could do 95% of the work ourselves.

 

[taymorel]

Really depends on how much updating the home will need. Like are you trying to rip out the original kitchen and bathroom? From what I have heard now is a good time to hire contractors for renovations since the construction business has slowed.

I like move in ready since my husband is not handy, but it depends on if you could find a good deal on the renovation work. Good luck.

 

[Sheaboys]

Our story, we bought a fixer-upper for our first time home. We LOVED the layout. It needed alot of work, but still "move in" ready. A lot of work meaning, windows (the big picture windows were fogged), eventually it would need a roof, bathrooms, and a new kitchen and kitchen floor. Again, liveable, but we could see us fixing it to what we wanted. This was 1996.

Well, that first year we took out windows, put in sliders, built 2 huge decks. Had 5 kids between 1998 and 2009. We began really renovating in 2007-2010. Built a new bathroom in the master bedroom, built a huge bathroom for the boys (taking out the 2 middle house bathrooms and making 1 huge one), put a metal roof on, did all new windows and siding.

We also replaced the heating system, added wood stoves, along with appliances as they went.

So we moved in, did very little (paint yes), started the family, then began doing the work. DH did it all himself. So it was hard, but in the long run, we paid cash for everything. So it certainly depends on where you are financially, and if you are handy.

Good luck!

 

[Claire&TheBoys]

I would look first for neighborhood, then second for floor plan. When we were looking for a new home (over a period of several years), we only looked in the school district we were already in; it is one of the best in the county and we wanted to stay in the area. There were also some geographic boundaries that we wanted to be within, so those 2 stipulations limited our search area. Fortunately, there are quite a few homes in the area so we had lots to choose from, but then of course we were limited by budget. When we looked at homes, I could overlook things like paint and wallpaper -- the floor plan and the lot the house was on were the two main criteria. #1, we wanted 4 bedrooms plus a room for a playroom. #2, we wanted a decent-sized backyard - enough for a swingset and room for the kids to play. We wanted the rooms to be a good size.

We wound up buying a house that was close to the top of our budget, but gave us 1000 sf additional over our previous home, plus has a glassed in "Florida room" as we call them down here (about 400 more sf). It is on a double-lot, so 100 ft x150 ft. The master bedroom is very large and the 3 other bedrooms are good-sized (guest room is smallest, but that's OK). There's a large playroom with doors. We have a formal dining room, formal living room, family room and eat-in kitchen. The floor plan is really one of the best we saw of any house we looked at (and we probably looked at 100 houses over several years). Now, the house was built in 1995. The carpet needs replacing. We had to have the master shower re-tiled before we moved in. We painted almost every room before we moved in. I plan to spend this summer stripping wallpaper from the boys' bathroom. We put new appliances in the kitchen, but the cabinets are cheap and not big enough and I have hunter-green-faux-marble-laminate countertops and hunter green ceramic tile in the kitchen (welcome to 1995!). But, we will fix up as we can afford to. I can live with the kitchen (even though the wallpaper is awful). What matters most is that the house is sound, it's large enough for our family as our children grow, and we like the neighborhood.

I wouldn't want a fixer-upper that will consume all my time and energy and money for months to come. I'd rather pay a little more now, get what I really want, and plan to work on it over time.

 

[rock_doctor]

We bought a (less expensive) fixer upper, thinking it would take DH (Mr. Handy Man) about 8-10 years to make the house into what we wanted.
Two words.......TWENTY YEARS!!!
Now that everything is replaced/repaired/remodeled, we have to start again with the first rooms we did, because they are now outdated!

This is a true statement it is a vicious cycle. Unless you make the update a full time project it will take a huge amount of time. I am not saying you should not do it but just keep it in mind. For me, to save a hundred grand i would get a fix'er upper but it must have good foundation, roof and shell. You can do drywall, wiring and plumbing yourself (it is easy and kinda fun) but doing structural work is complicated and is something that can (and usually does) require at least two strong people plus it does get complicated trying to figure out where load carrying walls and joists are and trying to calculate (live and static) loads...just not worth the trouble... Now... if your current rental is in that bad condition, low ball the owner, live in it until you can afford better and then tear it down and put up a modular house. They are super nice now a days and are much cheaper then a stick built house. Now, i am not talking about a trailer that they take the wheel off and call it a ranch home. This is a real house but is made up of box sections built in a factory. They bring them to the site and assemble them. The houses can be huge 2900sq ft and some... We have one on the shore. It is nice and because it has to meet not only housing codes but also transportation (trucking and road way) codes it is super strong. It is rated for 134mph winds... This is the manufacturer of ours... http://www.superiorhomes.com/... Something to consider... If you do the interior finish work yourself you could save a nice piece of change.

 

[Colleen27]

As others have said, comfort level with repair work makes a huge difference - how handy you are yourself, how much time you have to put in, and how comfortable you are working with contractors. We bought a move-in ready house the first time around even though DH is handy (and went on to get his builder's license & start a handyman/home improvement business while we lived there), and it was really a waste. I ended up doing most of the things the fixers we looked at would have needed anyway - new kitchen, bathroom, flooring, etc - because the contractor-grade "new" just didn't suit my style or our needs. The house we're in now was a major fixer - in 3 years we've replaced the heating system, the upstairs windows, and the hot water tank, made some major plumbing repairs, and still have a bathroom and kitchen renovation in the planning. But we have an unusually high level of comfort and know-how to bring to the project.

Layout, location, and square footage are the biggies, but be sure you're hiring someone reputable to look at foundation and mechanical systems as well. Those are the big bucks if you have an unanticipated problem.

 

[tinan]

My vote is for Move In Ready!!! We bought a fixer upper as well but only bought because of proximity to mother in law. We have spent so much $$ in this house that we will never see out of it. The costs on most projects have ended up costing more than anticipated and in general this house has been a money pit. If we had it to do over, we would have never bought this house, never put into it what we have and definitely would have bought a house with more land. Seriously think about what you want and what is important.

 

[pfalcioni]

As I type this, I just returned from spending $800 on grout.

Just. Grout.

The next 4 or 5 weekends we will be tiling our 1050 square foot deck. I won't tell you what the total cost of this little project will be, I don't want to think about it.

We had our home built 6 years ago, we built our own garage and re-did the interior of the shop. Our list of things that still needs to be done is still insanely long.

Just doing the upkeep on a home that is new can be daunting and expensive if you haven't experienced it before.

Saying that you need to be "handy" if you purchase a fixer-upper is being way too nice. You need to have skills. You need to have tools. If neither of you has worked in the construction business, or has a really good friend or relative in the business that would be willing to teach you, then the fixer-upper route is probably not for you.

We already owned a home prior to building this one, we were decently skilled and had a nice assortment of tools. The first year here, we spent nearly $1,000 on tools and I've probably spent another $300 to $500 every year since on other, more specialized tools for specific jobs. We are finally at the point of pretty much having everything we need for most "handyman" jobs around the house.

Even though the initial outlay of money seems to be greater on a "ready to move in" home, the entire amount is in a low interest mortgage. With a fixer upper, the mortgage is small, but everything else you pay for comes out of pocket so the final price can be much, much higher.

I am so happy that our first home was small and didn't need much work (we painted, replaced the roof when needed, replaced a few windows). I think that if we'd started with a fixer upper or the project we now have, we would have either gotten a divorce or gone bankrupt, or both!

 

[rascooby]

If you don't both want a fixer-upper, then I wouldn't do it. We recently moved into a foreclosure that needed a good amount of work (just cosmetic, mostly). Before we moved in we had to redo the tile in the kitchen and all the carpet (the horrible people who lived here before us abandoned their poor dogs and the carpets were ruined). My DH spent weeks painting before and after work so he could get all the rooms painted before the carpet came.

After the carpet and tile were replaced it was livable. We had to replace an a/c unit before our first summer. We have been in the house for just over a year and a half. The guest bathroom still needs to be repainted, our bathroom needs to have the wallpaper taken down (it's falling down), we still need to replace some windows and at some point *I* think we need to get the wood floor refinished or replaced. DH is working on replacing the wood trim on the outside of the house and we just replaced the fence (paid to have it replaced and man those things are expensive!).

My husband is a hard worker and enjoys the projects, but it's a long process. Our last house took about 5 years to get into perfect condition and then we moved. We aren't moving again (I hope) but I expect it will be 5 years until this one is done too.

I'm patient and he enjoys the work. Otherwise I don't think it would be a good idea. We do what we can when the mood strikes him and we when we have the extra money.

 

[dyna]

I'm in the process of buying a a bank owned home. Believe it or not 1st home DH an I looked at an (I'm very picky about houses having exactly what I want etc) We have no young kids so schools not an issue but good neighborhood is.

We got a home that needed new A/C ( outside unit had been stolen very common everywhere these days with vacant homes) Pool needed repaired the bank took care of those which was fairly major repairs to us esp not knowing what was wrong with the pool it turned out to be the pump an fairly inexpensive repair. The pool has been up an running for 3 weeks now

We are left to take down a very cheap backsplash it's already falling off the walls 12' long 18' high very simple retangle the hardest part will be picking out the tile. 1 set of closet doors, both toliets needs new guts, an I'm going to paint the entire inside before we move in just because it's much easier before moving in than after.

The walls are all a light neutral color so very easy to paint over.

DH an I can paint, repair toliets, hang closet doors but much more work than that we'd still be looking.

I agree when you own a house something always needs to be done.....

BTW I'm getting 1500 sq ft 3beds 2 baths 2 car garage an pool oh all hardwood an ceramic tile floors for less than 80,000 here in central FL l30 mins from the mouse.

 

[Halbleib1]

This is a true statement it is a vicious cycle. Unless you make the update a full time project it will take a huge amount of time. I am not saying you should not do it but just keep it in mind. For me, to save a hundred grand i would get a fix'er upper but it must have good foundation, roof and shell. You can do drywall, wiring and plumbing yourself (it is easy and kinda fun) but doing structural work is complicated and is something that can (and usually does) require at least two strong people plus it does get complicated trying to figure out where load carrying walls and joists are and trying to calculate (live and static) loads...just not worth the trouble... Now... if your current rental is in that bad condition, low ball the owner, live in it until you can afford better and then tear it down and put up a modular house. They are super nice now a days and are much cheaper then a stick built house. Now, i am not talking about a trailer that they take the wheel off and call it a ranch home. This is a real house but is made up of box sections built in a factory. They bring them to the site and assemble them. The houses can be huge 2900sq ft and some... We have one on the shore. It is nice and because it has to meet not only housing codes but also transportation (trucking and road way) codes it is super strong. It is rated for 134mph winds... This is the manufacturer of ours... http://www.superiorhomes.com/... Something to consider... If you do the interior finish work yourself you could save a nice piece of change.

We looked at superior homes as well as other local manufactured housing places before buying our townhome in 2006. The price of their homes had gone up so much from when we had first started looking at them in 2004 that it was cheaper to buy a stick built home than a manufactured home. The price of a manufactured home from them for the same sq footage was already more than a stick built and you still had to buy the land and pay to have sewyer and water put in. I can't imagine them being any cheaper today with the way the housing market has gone.