Worst house in a good neighborhood or best house is a bad neighborhood?

**Thrif-t** · 07-26-2015, 06:22 PM

Me personally. I'd want to live in the good neighborhood with the worst house. Nice houses around you are going to pull your value up. Whereas in the crappy neighborhood they are going to pull you down and you're not going too get what your house is worth.

**riverwed070707** · 07-27-2015, 06:59 AM

I'll bite. Both times we've purchased a house we bought on the less popular side of town. Not bad neighborhoods by any stretch, not even run down, just not the most sought after, best school district areas. Our money goes a lot further and we're able to have more of the features that are important to us like a big yard.

Our current home we purchased for $165k. Its 2600 finished sq ft on a half acre lot just east of our metro. I'm 10-15 minutes to downtown (where I work) and there is virtually no traffic. The same house on the north or west side of the metro would have easily cost $215-230k and I'd spend 35-45 minutes commuting because there's so much more traffic. I wouldn't do anythign differently if we were to do it over. That said, we've tried to sell a couple times with no luck. Even after spending $40k in updates, every realtor wants to list for what we paid for it... whether thats the market, the school district or something else, I'm not sure but I do think the area has kept our value from increasing in line with other homes.

**John Doe** · 08-02-2015, 02:52 PM

The real estate market is a tricky game. I've bought a home that turned out to be a terrible investment. And I've bought a home that turned to be an excellent investment. Everything depended on the location and whether the area was going up or down. If you buy in a "bad" neighborhood and gentrification improves it, you can make a killing. If you buy in a "good" neighborhood that is overpriced and past-its-prime, you can lose your shirt. The bottom line is you have to know the area well. I read some excellent advice once that said "never buy property in an area where you don't the market very well". I would also recommend looking at hard data: percentages, trends, averages, projections. That helped me a lot, too. I would also recommend trying to study and understand some of the underlying factors that affect your local markets: school distrct performance, reputation, future development plans, demographic patterns, economic factors, etc. Good luck.

**LivingAlmostLarge** · 08-03-2015, 01:12 PM

Depends on how good your crystal ball is. I leave RE to professional. Me I live where commute is short and schools are good. I end up paying a premium.

**snafu** · 08-06-2015, 06:32 AM

All but one of our homes were the worst or smallet home in the best neighbourhood. I like to decorate and manage projects. It's critical to use an experienced, accredited home inspector so that there are no structural or high cot money pit issues. It's amazing how a couple of gallons of paint upgrades and updates ugly. The new, vinyl flooring is a remarkably easy DIY. Changing out door and drawer pulls, often available at Habitat for Humanity, helps a lot.

I don't see the value of McMansions. Clever use of space and banishing clutter allow an average family enjoy smaller square footage. It all comes down to your view of sweat equity. You Tube and Saturday morning classes at Home Depot type outlets.

**disneysteve** · 08-06-2015, 07:20 AM

Better to buy the lesser house in the better neighborhood.

You can fix up the house. You can't fix up the neighborhood.

**LivingAlmostLarge** · 08-06-2015, 07:56 PM

Now i say bad house but MANY of my friends are doing this recently and my DH says no way. Average house in neighborhood you can afford. Why?

His take is if the only way you can get into a neighborhood is to buy a fixer you will constantly be struggling to keep up. And stretching to repair it. It's one thing to buy fixer and repair it and you can easily afford it. But most of my friends are doing this as the only way to get into a neighborhood they really can't afford.

Personally I'd rather buy and middle of the road. Able to afford it comfortably a normal house and I pick a fixer because I want to fix a place to my tastes. Not because I can't be average.

**disneysteve** · 08-07-2015, 04:18 AM

Originally posted by LivingAlmostLarge View Post

His take is if the only way you can get into a neighborhood is to buy a fixer you will constantly be struggling to keep up. And stretching to repair it.

This is a reasonable point. If you do buy the lesser house, the fixer-upper, make sure your budget has room in it to actually do the fixing.

There is a big advantage to buying the fixer-upper. The cost of those repairs isn't built into your mortgage.

We bought a 30-year-old house that still had the original roof, AC, heater, siding, windows, etc. We knew all of that stuff would need to be replaced. But the sale price of the house was about 30K lower than comps which gave us a much lower mortgage payment, leaving income free to address those projects one by one as they become necessary, which we did over the following 5-10 years.

Don't buy into a neighborhood that you can't afford by finding the trashy house in that neighborhood. That just won't go well long term.

**ronb** · 08-08-2015, 10:50 AM

One concern I have about buying the worst house in a good neighborhood is my lifestyle inflation. Me (or my future wife or possibly future kids) may be pressured into spending more money than we would in a less affluent neighborhood. I'm pretty sure I wouldn't but wife and kids... I don't know. It would be hard if all my wife's neighborhood friends would always talk about going on 5 trips abroad each year or w/e... I'd feel bad and probably do stuff to impress them.

**disneysteve** · 08-08-2015, 12:24 PM

Originally posted by ronb View Post

One concern I have about buying the worst house in a good neighborhood is my lifestyle inflation. Me (or my future wife or possibly future kids) may be pressured into spending more money than we would in a less affluent neighborhood.

When you said "good" neighborhood, I took that to mean a neighborhood that you can afford to live in. If you mean buying into an area that you can't really afford, then it doesn't matter what condition the house is in.

Stick to an affordable house in an affordable neighborhood where you would be happy living an affordable lifestyle. Doing anything else would just be plain old stupid.

**John Doe** · 08-10-2015, 02:33 PM

Lifestyle inflation is a real concern...but it can happen in most neighborhoods. And at the end of the day, you close your doors to the rest of the neighborhood and you spend only as much as you want to spend.

**Buyer** · 01-05-2016, 07:05 AM

Originally posted by disneysteve View Post

Better to buy the lesser house in the better neighborhood.

You can fix up the house. You can't fix up the neighborhood.

X2, with emphasis! You can fix up that run down house, or make the small house bigger, but you can't do anything to improve the neighborhood. And the smaller, less expensive houses in a neighborhood, appreciate faster (as a percentage) than the larger, more expensive homes (all else being equal).

**LivingAlmostLarge** · 01-07-2016, 08:45 AM

except if you can't afford the repairs. My friends now are running into unexpected, unbudgeted repairs they can't afford.

**bjl584** · 03-11-2016, 04:50 AM

Not sure if you want the worst house. Repair costs add up quick. When the smoke clears you might find that you would have spent the same by just buying the house up the street that was in move in condition.

Worst house in a good neighborhood or best house is a bad neighborhood?