Lower priced smaller house or higher priced bigger?

amother

Tue, Aug 04 2020, 7:11 pm

Need to make a decision between two houses. One is lower priced and wouldn’t be as difficult financially, but is smaller and smaller potential.. like the bedrooms are very small and no room for expansion other than adding a whole additional floor(very expensive). The other house is significantly more and would be more pushing ourselves to afford it but is bigger right now and has better potential to add bedrooms in an easier cheaper way than adding a whole floor. Side point, the cheaper smaller house is more updated. Having a very hard time making this decision.

amother

Lawngreen

Tue, Aug 04 2020, 7:26 pm

Following. I'm trying to make a very similar decision right now. In my case, the smaller home would likely be a starter home where we would have to sell and move to a larger home in the future iy"H as our family grows. It is much more affordable right now but we're trying to decide whether we should stretch ourselves for the bigger house now to avoid the starter home step. Especially with the current economy, I'm a bit nervous about taking on a bigger mortgage with larger monthly payments in case chas veshalom one of us loses our job. I don't have any advice for you but I'm hoping someone else will!

zaq

Tue, Aug 04 2020, 7:29 pm

Conventional real estate wisdom says to buy the most house you can afford. If yours is a young and growing family, this makes the most sense, all other things being equal. What do you mean by “updated”? Modern in style or new appliances, windows, roof, wiring, heating, a/c, plumbing? Style who cares, what’s stylish now will be passé in a few years, but if the house is cheaper because the infrastructure is old it’ll cost you big time as each element will poop out one by one and be a completely false economy.

amother

Tan

Tue, Aug 04 2020, 7:29 pm

Is there any income potential on the bigger house? I bought a small starter house, and load there for 2 years. I sold it after that making a little bit of money, and bought a bigger house but I rent that a part of my basement and my mortgage is the same as my old house with my tenant.

Personally, I would push myself for the bigger house. Could you afford the bigger house at all or is it really really stretching? I would do less with things and have a bigger house.

amother

Tue, Aug 04 2020, 7:31 pm

Rutabaga wrote:

Houses are expensive beyond the asking price. Something always needs fixing or replacing. Don't spend more than you can afford, especially if you won't have savings for the inevitable things that will crop up.

with interests rates very low, we plan to put down sig less than 20% so we would still have savings to fall back on. also to add neither house needs any immediate work. we anticipate our income going up over the next few years iyh. we will have savings to fall back on for a few years if cv we cant meet our monthly expenses.

amother

Tue, Aug 04 2020, 7:32 pm

amother [ Tan ] wrote:

no income potential.

queen esther

Tue, Aug 04 2020, 7:32 pm

I also would be nervous to be stretched financially more than is necessary. Moving is a hassle of course but better than stressing about mortgage every month...is the smaller house really too small for you now? Or are you thinking about only iyh if your family grows? No one really knows how big of a family they will really end up with. I also think being updated already is nice, if it's not too small now. If even now is tight- having space is important. I hear why it's a hard decision, so I don't know what I'd do in your place, just giving my thoughts.

amother

Tue, Aug 04 2020, 7:35 pm

zaq wrote:

interesting. they were both built around same time. bigger house has brand new central air system and gas heat. smaller house has oil heat. bigger house has better solar potential. other than that, not much else different. smaller house has new kitchen with new appliances. bigger house kitchen is old but in great condition, but yes older appliances.

amother

Silver

Tue, Aug 04 2020, 7:38 pm

amother [ Khaki ] wrote:

Also keep in mind that utilities etc are all more expensive on a bigger house
Its a really tough decision though!

Personally, I'm paying approximately the same amount in utilities for my largish house that I paid for my tiny little 600 foot apartment. My large house is newer so it's more efficient.

I would vote the larger house, because it's such a hassle to move if you outgrow the smaller house, but that's just me.

LittleMissMama

Tue, Aug 04 2020, 7:42 pm

The larger home will have higher utilities and taxes. Only you can decide how tight you want your budget to be.

I probably would have stretched the budget if I was younger and making such an exciting purchase. Now that I'm older and see that every year gets more expensive (tuition increases, medical stuff, braces, camp, bar/bat mitzvahs, etc etc), I would go back in time and choose the cheaper house.

amother

Beige

Tue, Aug 04 2020, 7:57 pm

This was me 2 years ago. Here's how it worked out for us.

We almost bought a tiny house for 700k. It was really, really small with a tiny kitchen. I'd have nightmares about where I'd store things (we actually called it the doll house - that's how small it was)

The next level up that was semi decent condition was in the mid 900s - which was way too much for us.

Then I saw the perfect house but it had just sold - at 800k. I talked my husband out of the tiny house and said I was going to wait for the next 800k house. If there was one, then there would be another. It was a stretch for us in terms of monthly income, but it made much more sense long term.

Long story short, we found our house a few months later. Much bigger in terms of space and about 800k.

We made a similar chesbon. Our income will go up in the next few years when DH gains more experience in his field. We renovated what we could afford - leaving a sizeable amount left over as a security in case we needed it to cover the mortgage. I worked seriously overtime all summer to put away enough to fix my kitchen. Until then, I had a trief kitchen covered in silverfoil and contact paper and no oven but I knew as soon as I reached a certain amount of savings, I could afford to fix it.

Then I stated saving up again to replace the light fixtures and buy decent shades.

DH said to me the other day - thank goodness we didn't buy the tiny house. This was a much better house with more room to stay long term.

amother

Green

Tue, Aug 04 2020, 8:54 pm

I was in a similar situation. My husband wanted a smaller more updated house but I grew up with many siblings in a small house and could not bring myself to buy such a small house. (I hated having no space!) We ended up buying a bigger house that needed some work and was slightly more money. However, it is nice to know that we are set for the future iyh and we are not planning on moving again. It really depends on priorities and your budget.

Buying a house is really stressful! Hatzlacha raba!