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EthanYQX 06-01-14 03:26 PM

Buying a house-opinion question
 
Ok, I'll be buying a house in the next year and three distinct "types" of options stick out to me. Background information first:

I'm 21 (22 in a week), single, no kids. I do want to entertain, and ideally family would be able to stay with me. The town I live in (and I have to stay here for work) has a built in market with two major employers and housing values have not significantly moved in years. Just over 12k people and it'd be an 8 minute or so commute from option A or B and a 15 minute commute from option C. I do not have specific houses in mind, just specific areas.

A) A smaller bungalow with a basement and 2-3 bedrooms, on an older, quiet street. Nice sized lots and solidly built homes. In the $180-250k range. Pros: House is inexpensive, it's all I need space-wise, lots are nice, could leave from the house to ride my mountain bike, very low traffic. Cons: I'd have to upsize were I to have kids, not a whole lot of space for toys (boats, trailers, big garage, etc.), I don't really want other people's kids or cats running around my property, small driveways.

B) A larger home in a new subdivision, either buying an existing one or having one built. Small lots and questionable quality on some of them. $350-450k range. Pros: More space in the house, would last me longer, maybe more equity. Cons: More kids around most likely, small lots, could be a badly built house, more money tied up in the house, no close trails, higher traffic.

C) A really large home just outside of town near a small lake, on a 1-2 acre lot. Very expensive, 500k+ plus, and old houses and possibly poorly maintained lots. Pros: Lots of space, all of the outbuildings I want, could have an inground pool, a big garage, etc., lots of privacy. Cons: Lake could make things buggy, house would be old and probably neglected a bit, absurd amount of money tied up into my house with not much of an increase in equity, no real rules on what my neighbours can have on their lots, I'm a shift worker and the drive could suck in the winter since it's basically on a highway, low-ish but fast (80km/h speed limit) traffic.

I know roughly what I'm leaning towards but I'm curious as to what Foo would do.

ahsposo 06-01-14 03:37 PM

I'd take option A for my first home.

spinnaker 06-01-14 04:16 PM

Quote:

Originally Posted by ahsposo (Post 16811559)
I'd take option A for my first home.

Same here. You don't know what the future holds. Personally I would go with an even less expensive home.

I bought my first house when I was 24. I bought a cheaper home (a townhouse). While it had some drawbacks I was glad I went that route and was glad I did. I was able to save a ton of money over the years. Also was able to enjoy myself having no outside maintenance.
.

bikebuddha 06-01-14 04:17 PM

I would take option A, there was a time when whole families lived in those small bungalows.

EthanYQX 06-01-14 04:19 PM

Option A is where I'm leaning, but a townhouse or a duplex is totally out of the question. Not doing the shared wall thing.

spinnaker 06-01-14 05:56 PM

Quote:

Originally Posted by EthanYQX (Post 16811668)
Option A is where I'm leaning, but a townhouse or a duplex is totally out of the question. Not doing the shared wall thing.

It is not so bad. But you need to have the right neighbors that keep the noise down. The big thing is enjoying the outside of the place. There is almost no privacy.

BTW A friend of mine in Thailand had a shared wall and there was an opening at the top of the wall. So it could be worse. :)

EthanYQX 06-01-14 06:16 PM

Quote:

Originally Posted by spinnaker (Post 16811896)
It is not so bad. But you need to have the right neighbors that keep the noise down. The big thing is enjoying the outside of the place. There is almost no privacy.

BTW A friend of mine in Thailand had a shared wall and there was an opening at the top of the wall. So it could be worse. :)

It's mostly a market thing for me, all of the duplexes around here are in pretty nasty areas. Townhouses are nonexistent.

If it was more common here I'd consider it, or if I thought I could get into one where the guy on the other side was another single yuppie it'd warrant more thought. There aren't even any nice apartments here.

bjtesch 06-01-14 06:21 PM

Less than a year out of college I bought "A". Years later when I became newly single I bought "B".

himespau 06-01-14 06:28 PM

As someone who recently chose "B" for a first home (though I'm rather older and have a family), I'd say go with A.

no1mad 06-01-14 07:14 PM

I wanted A, my wife wanted C, we compromised with B (which turned out to be a mistake). In other words, A.

EthanYQX 06-02-14 06:44 AM

Yeah, Option A really seems to be the way to go. It's where I was leaning, too. Living alone means I really don't need a "man cave" and, with the steady market here, I won't take too much of a hit if I sell it off.

CbadRider 06-02-14 09:19 AM

Another vote for A. You'll have to take care of the house by yourself so the bigger the house and yard, the more maintenance required that keeps you from doing fun things like riding your bike.

JamesRL 06-02-14 09:25 AM

A = Go inexpensive, and pay it down as quickly as you can. Then when you meet your life partner, you can choose the next one together, and have some equity in A built up.

jdon 06-02-14 09:35 AM

Check with your realtor as to the trends of the neighbourhoods then buy the best house you can in the neighbourhood with the most demand. 10% gain on a 200k house is 20k. 10% gain on a 400k house is 40k. I don't see a downside forecast in your area and your job is secure as they get these days.

That said, my father told me starting out, "the worst place to live is beyond your means" so don't be mortgage poor.

Darth Lefty 06-02-14 09:36 AM

In your shoes I'd go with "A", until the hypothetical wife and kids arrive; or even just an apartment. Your wife may not want to live in your bachelor home regardless of which letter it is, buying a new house together is common. I have a wife and a baby on the way and a "B" but that's almost not important.

Here's what's important: Can you afford any of these with a starter salary and minimal down payment? I don't know about tax rate or mortgages in Canada. Are you planning on roommates? Are you planning on ever affording a new car?

jsharr 06-02-14 09:43 AM

I do not see B or C as options. Buy the smaller house, save money to invest.

EthanYQX 06-02-14 09:57 AM

Quote:

Originally Posted by CbadRider (Post 16813614)
Another vote for A. You'll have to take care of the house by yourself so the bigger the house and yard, the more maintenance required that keeps you from doing fun things like riding your bike.

I have family in town that will help me with some maintenance, but yeah, that's another big plus.

Quote:

Originally Posted by JamesRL (Post 16813632)
A = Go inexpensive, and pay it down as quickly as you can. Then when you meet your life partner, you can choose the next one together, and have some equity in A built up.

I don't think it will take very long at all, with option A, to get to the point I can sell it for more than I owe. A year or two, probably. The other two would be questionable, so there's another point.

Quote:

Originally Posted by jdon (Post 16813669)
Check with your realtor as to the trends of the neighbourhoods then buy the best house you can in the neighbourhood with the most demand. 10% gain on a 200k house is 20k. 10% gain on a 400k house is 40k. I don't see a downside forecast in your area and your job is secure as they get these days.

That said, my father told me starting out, "the worst place to live is beyond your means" so don't be mortgage poor.

Yeah, this is where my thought process is. Basically between us and a big hospital there's always going to be demand so even if I leave it should be sellable. Option C would probably take the worst hit if the economy started to suck again. And yeah, I am pretty much in for life, it's my favorite thing about what I do.

My coworkers have a tendency to book a trip on Monday and leave on Thursday so I'd like to be able to afford to do that kind of stuff. Yet another point for A.

Quote:

Originally Posted by Darth Lefty (Post 16813673)
In your shoes I'd go with "A", until the hypothetical wife and kids arrive; or even just an apartment. Your wife may not want to live in your bachelor home regardless of which letter it is, buying a new house together is common. I have a wife and a baby on the way and a "B" but that's almost not important.

Here's what's important: Can you afford any of these with a starter salary and minimal down payment? I don't know about tax rate or mortgages in Canada. Are you planning on roommates? Are you planning on ever affording a new car?

This is what I'm thinking, even if it's big a hypothetical wife may not want to live there. I wish there were some nice apartments locally, but there aren't, and besides I would probably want the equity and space for toys even if there were.


As far as the money question goes, yes I can afford these. Mortgages I'm counting on a 3% or so rate but I expect better. No roommates, I don't financially need them and I like being alone. I have my eye on a new Tacoma, most likely before I buy the house but it depends on what comes up at a deal first.

leob1 06-02-14 10:03 AM

A, pay it off as quick as you can. You'll be in a much better position when you need B.

Nachoman 06-02-14 10:21 AM

I'd also go with option A. That's what my wife and I did.

blacknbluebikes 06-02-14 11:38 AM

1. accept no forecasting. human stink at forecasting, always have.
2. any resale can just as easily be +10% or -10%, or worse, given what you said about this being a "2 company town." One serious round of layoffs, and ...
3. meet your needs, don't exceed your needs, BANK THE REST.

skijor 06-02-14 11:59 AM

The choice is obvious....Eyy :thumb:

RPK79 06-02-14 12:00 PM

I'd rent.

StupidlyBrave 06-02-14 12:24 PM

Buy the first house you find with a star on it

jdon 06-02-14 12:43 PM

1. accept no forecasting. human stink at forecasting, always have. So, you know his local market?
2. any resale can just as easily be +10% or -10%, or worse, given what you said about this being a "2 company town." One serious round of layoffs, and ... and he has a secure job with no need to sell in a down cycle.
3. meet your needs, don't exceed your needs, BANK THE REST. or save a crap load in taxes and real estate/lawyer fees and buy right once.

EthanYQX 06-02-14 01:23 PM

Quote:

Originally Posted by blacknbluebikes (Post 16814180)
1. accept no forecasting. human stink at forecasting, always have.
2. any resale can just as easily be +10% or -10%, or worse, given what you said about this being a "2 company town." One serious round of layoffs, and ...
3. meet your needs, don't exceed your needs, BANK THE REST.

I'm definitely leaning towards A, mostly for cost and maintenance, but like jdon said, my job is definitely there for me until I retire. I don't know the healthcare industry well but my job is downsize-proof and there's not really a high turnover at the hospital here, plus they serve 10-12 towns so I don't see them being able to downsize.


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