Choosing real estate

[disneysteve]

Location obviously but what about other factors other than "good" neighborhood. Does busy street or next to train tracks or gas station matter in a good or bad neighborhood? Run down street in good neighborhood?

Layout - is size and potential more important than just buying a layout that works and might need updating.

Updating - yes easier to update but what about potential surprises when you start to do work?

Specific location definitely matters, as I've said above. We would not have bought a house on a busy street. I'm not risking my life every day pulling out of my driveway. I don't want a city bus running past the house waking me up every morning (we had that in the house we rented when we first got married). We didn't want a house where our kid could get run down if she stepped out into the street accidentally.

We also didn't buy the house that we liked best when we were shopping because there were electrical towers and power lines running right behind it.

Layout absolutely matters. I think that's one of the top priorities. You have to like the house and it has to meet your needs. That isn't really something you can generally change, or at least not without major construction.

Updating is always a risk but such is life. I wouldn't let that be a factor except maybe if you're looking at a really, really old house.

[clatoden99]

"Any Real Estate" is broad. Ideally the first question I am asking is why am I buying the real estate? For a business location, investing or other reasons.

If for investments the next questions I am asking is, are we investing for Cash Flow (money every month) or are we investing to gain wealth?

Then I am asking what is the budget. Once I have these, it opens a long line of questions which are market and product specific. Answer those and I would be glad to continue on.

[dawnwes]

We are currently selling/buying, so I will address some of these and then add in our ideas. BTW: This is our FOURTH house we will be purchasing since getting married 21 years ago.

Okay everyone talks about how to pick real estate and we touched on bad house in good neighborhood versus great house in bad. But what factors are involved? What's important in buying a house?

1. Condo versus house? Let's assume you can't afford a house in your chosen neighborhood but you can buy a condo. Which is it?

Never a condo. I want a fenced yard for the dogs, PRIVACY, and noise control

2. If you did buy a condo what if you can't afford a 2 bd but only 1 bd?

I once (when single) was offered a 1 bedroom in Los Angeles for $70K. In retrospect, I probably could have used it for a rental as I am sure it is going for much more now, but I got married the following year and we had kids within 3 years. So, I wouldn't advise a 1 bedroom. They are also HARD to sell.


3. If you could buy a house in your chosen neighborhood what if it were only 2 bedrooms instead of 3 bedrooms?

For us, NO, but we are a family of 5 and need more. If it were just DH and me, I might consider it, but would still prefer 3.

4. What if the house only has 1 bathroom?

Depends. In Los Angeles, that may be our only option. We had only 1 when we lived there, but I would much prefer a min. of two.


5. Do you buy a house in the "right" neighborhood but on a busy road? What if it's not in a neighborhood but a commuting traveled road?

No, not with kids and not for noise levels.

6. Do you buy a home with a bad layout and not easily fixable due to constrained lot size?

Eh, I have lived with funky layouts. Would have to know how "bad" it is.

7. Is it ever worth to buy a home fixed up or better to always buy a fixer?

Can't answer. It might be. We are finding that by the time you fix it all up, it costs about the same but with added headaches.

8. Is it worth looking for a bigger lot with an older house or newer house on a smaller lot?

Again, preference

I'm curious as to people on the board's experiences.

We are moving FROM 2.5 acres in the suburbs to about .5 acres in the city. I am THRILLED!

We are looking at houses 3/4 the size our current house, for roughly the same price we will get for this one.

Our GOAL is to find either a house with MINOR repairs needed OR unfinished space we can add on easily.

No busy streets, no townhouses or condos, no major fixers.

Our house before this one was in LA, 1500 sq. ft Craftsman built in 1910. I honestly loved that house, but it also had issues. I would prefer not to buy something that old again.

[LivingAlmostLarge]

Personal reasons not investment buying of property. So we have to love it. RE for living I don't think makes much profit. Investing is a different story. You look for different things i think when buying rentals than what you want in a house.

[disneysteve]

You look for different things i think when buying rentals than what you want in a house.

I am not a real estate investor, but I would think the answers would be fairly similar. If I'm buying a property to rent out, I'd want it to be appealing to potential renters: good location, nice layout, quiet street, quality schools. All of the same things we were looking for when we bought our own home.

[dawnwes]

I think this line of thinking gets so many people into trouble financially. They're never satisfied. They always want more and more and more.

My parents' generation (born in the 1920s and 30s) didn't do "starter" homes. They bought a house and lived there their whole lives. My parents bought their house in 1955 and there they stayed. My dad died in 1992 and my mom remained there until 2008 when she sold the house and moved to a sr. citizen apartment house.

My wife and I have followed in that pattern. We bought our one and only house in 1994, 22 years ago. Our next move, if we make it, will be to our intended retirement destination.

Not constantly moving and upgrading our home is one of the biggest reasons that we are as well off financially as we are.

I can see this line of reasoning for those who have no intention of leaving the area, but we are a very mobile society now and moving around is the norm.

[dawnwes]

Steve,

I know you live in NJ and your property taxes are high. If we had those kind of property taxes, we would be buying a cheaper house. Most people I know in NJ pay around $12K in taxes for a small house. A similarly priced house (just going by a $300K estimate for comparison purposes) is $3K here.

Salaries being the same, I could see the line of thinking that the additional $9K could go into mortgage and a nicer home could be purchased.

[disneysteve]

I can see this line of reasoning for those who have no intention of leaving the area, but we are a very mobile society now and moving around is the norm.

Dawn, I'm not talking about people moving around for jobs or to relocate by choice. I'm talking about people who stay in the same general area but just upgrade their house 2 or 3 or 4 times. We had friends who did this in central NJ. Yes, they had 3 kids, and yes, they made a ton of money (he works on Wall Street), but their last house was just ridiculously large. They had several rooms that they didn't even furnish because they never used them. What purpose does that serve? And these are people who I'd say are actually very responsible and very fiscally well-educated, and they still did it.

Their first house was a little small but they didn't have 3 kids when they bought it. Their 2nd house was beautiful and spacious. It was the 3rd house that started getting silly. They've since moved again but we haven't seen their current house yet. So this is 4 houses in about 20 years compared to our one house in 22 years. Who do you think has spent more money on closing costs, moving expenses, furnishing, decorating, landscaping, etc?

[dawnwes]

Dawn, I'm not talking about people moving around for jobs or to relocate by choice. I'm talking about people who stay in the same general area but just upgrade their house 2 or 3 or 4 times. We had friends who did this in central NJ. Yes, they had 3 kids, and yes, they made a ton of money (he works on Wall Street), but their last house was just ridiculously large. They had several rooms that they didn't even furnish because they never used them. What purpose does that serve? And these are people who I'd say are actually very responsible and very fiscally well-educated, and they still did it.

Their first house was a little small but they didn't have 3 kids when they bought it. Their 2nd house was beautiful and spacious. It was the 3rd house that started getting silly. They've since moved again but we haven't seen their current house yet. So this is 4 houses in about 20 years compared to our one house in 22 years. Who do you think has spent more money on closing costs, moving expenses, furnishing, decorating, landscaping, etc?

Yes, I do understand that. I just was saying that that isn't the reality for most people.

What do you consider ridiculously large? We have several friends with houses much larger than ours. 6,000 sq. ft and up. One family lives in a house 13,000 sq. ft. Their house is like a mini castle with 12 ft. ceilings, etc.....I can't even begin to imagine, but I don't have that kind of money.

[disneysteve]

What do you consider ridiculously large?

When you have multiple rooms that you don't even furnish because you have no need for that space, I think that qualifies.

[dawnwes]

When you have multiple rooms that you don't even furnish because you have no need for that space, I think that qualifies.

Well, everyone I know who has those large houses, has them completely furnished and useable. One even hosted a current candidate's dinner for the greater city area early in the campaign. The cost was $250 per dinner.

[LivingAlmostLarge]

I've found that a lot of people buy homes that are big. Looking at floor plans I can easily say 2700-2800 sq ft would be more than adequate if the right floor plan was available. If not I find a lot of wasted and useless space at 4000 sq ft. Ugh.

[scfr]

Buying a home is such a personal decision. Even if you say "location" for one person that might mean access to top-rated schools, but for another it might mean a short commute to work. Believe it or not, for my husband access to good public golf courses is a very important aspect of location!

And everyone has different home features that they think is important; again it's highly personal.

Among the features I look for that doesn't make many people's list is a combination of electric & gas power. I don't want to have to rely on one of the other, in case one goes down. We lived through the Puget Sound Hannukah Eve windstorm of 2006 and were in one of the later neighborhoods to regain power. If we had not had a gas fireplace, gaswater heater, and gas stove our lives would have been even more miserable!

When we were home shopping, we rated these criteria: location, home features, bottom line move-in price (which includes any necessary upgrades, appliances, blinds if not already installed, etc.) , and perceived investment value.
Neither my husband or I are big DIYers so "fixer-uppers" were out of the question.

[FrankFacts]

I would also consider future income potential. If you don't plan to live there forever, would you just sell the home? Rent it? Depending on either, what's the outlook? Will you be able to get a decent return on the investment, or might you lose money? Are there enough renters around to rent to?

[LivingAlmostLarge]

Snafu interesting points thanks. I think location for commute matters most to us. I'm not sure about the rest of the things with location.

I think this is our 20 year home then downsize when the kids leave.