Where to live: What would you do?

[Dreamer_D]

My husband and I are relocating accross the country and are presently trying to decide where we would like to live and buy a home. We have spent a long time studying the area, talking to my future colleagues who live in the area, and my mom has gone over to visit and see the area to help us decide.

From this, we have narrowed it down to two very different options and we are having a hard time deciding which we prefer. Both options would result in about the same net amount of money out of our pockets each month. Both involve compromises from our ideal way of living because the area we are moving to has *extremely* expensive realestate.

Some background. We have a young son and will likely have another child in a couple of years. We have two small dogs. My husband will be working from home for his company, with occassional (maybe one day a week) trips to visit other locations. I have flexible hours in my job and so can travel during non-rush hour. I will probably also work from home one day per week. We have one car that we share and would like to keep it that way for a couple of years. We will be having out-of town family visit fairly often. Our son will probably be in daycare near our home. I don't like commuting.

Option 1:

We can buy a house that is within 1 mile of my work. The house would be in a 1960 subdivision, very family friendly, quiet, residential area. I could ride my bike or walk to work. Parks abound. There are no commercial areas, so to shop or anything we would need to drive. To afford to live in this area we would need to buy a house with a rental suite. The rental market is very good for suites, we could rent it easily and would be able to be somewhat picky about the tenant. We would soundproof the suite as best we could. In a pinch, we could afford to pay the whole mortgage if it was unrented, but when it is rented we would end up with an extra $300 per month in our pockets. The house would be older and in need of updating. Our living space would probably be about 1200 sq ft. We would have a yard. With updates we could probably add good value to the property.

Option 2:

We can buy a house that is about 10 miles from my work. The house would be in a modern subdivision, very family friendly, quiet, residential area. This is an area where many young families go to live because it is less expensive than living in town. Many of the neighbourhoods in this area include shopping areas that you can walk to. I would have to drive to work, which would probably take about 20-30 minutes depending on the traffic. On days my husband needed the car, he would drive me to work, which would be on his way to his own stops. It is not a particularly busy highway, as the local population for the region is only about 300 000. Parks abound. We would *not* require a rental suite. The house would be brand spanking new with no need for updating. Likely no need for repairs very often either. Our living space would probably be about 1600 sq ft. We would have a yard. Although we can't really upgrade the interiour, this is an area that will probably become more desireable over the years as it becomes even more expensive to live in town. They also plan to add a commuter train, which would also increase the value of the property.

So which option would you choose? If you want any more information please ask!

 

[D&T]

I voted for #2 option DD, just because both you and your DH will be busy and with a new little guy plus you want to have another one in a little while, and with all thats going on, I think one less thing such as updating is a nice thing not to have. 10 miles is not bad at all jmho, and you have less worries on home maintenance as well for a new home versus #1 option, and bigger living space to boot. Sounds more appealing to me.

 

[KimberlyH]

I crave walkability. I want to be able to walk to the store, a restaurant, the park, etc. I also wouldn't enjoy having a tenant in my home (I'm assuming you would be renting out a room in your house, not a detached unit). I don't enjoy commuting, but 10 miles 4 days a week doesn't fall into that catergory for me and the potentiality for mass transit would erase that problem all together for me. With a new baby and plans for another 1200 sq. ft. might be a tight fight in a few years (and I prefer smaller homes to larger) plus the home being new and not needing updating sways me (unless the older home had an architectural interest, which I'm guessing the 1960s homes do not). All of these things would definitely lead me to choose #2.

 

[Mrs]

DD, I voted for number 2 as well. Given that you''ll likely have another baby before too long and you''ll have family visiting fairly often, I think the larger space would be needed. I also know that I wouldn''t want to share a part of my house with others even if it would net $300 a month - I wouldn''t want to deal with the headaches that can come with being a landlord. I think being able to walk to a store or restaurant is also really nice.

good luck! I''m excited for you!

 

[Dreamer_D]

Thanks for the votes so far!! I should clarify the rental suite issue:

The rental suite would be self-contained with a separate kitchen, bathroom, entrance etc. We would not share living space.

 

[cara]

While I hate communting, 20-30 min is not that bad, and I love walkability for shopping. The downsides of option one (rental, smaller, driving for shopping) make me prefer #2. Especially as your husband will not have a sucky commute either way.

Don''t know much about how feasible it is in your location or how interested you are in it, but 10 mi is a doable bike commute especially if its only once or twice a week.

 

[KimberlyH]

I would be fine living with a tenant in a seperate unit but I would still choose option #2 for the size/space, walkability, and mass transit. Those things outweigh being a mile from work and $300 a month for me.

 

[MustangGal]

I also say #2 for the size. We''re in a 1500sqft house, and with just 1 baby and frequent guests, it''s starting to feel small and we''re looking to upgrade to a larger house.

I also would like to be able to walk to shopping, which would be handy to take the baby with you in a stroller when your DH has the car. I also driv 11 miles to work, and it''s not that bad.

 

[sparklyheart]

I chose #2 for several reasons.. I''m against buying a house that you can''t comfortably afford. If you truly need a tenant to be comfortable and you are unable to get a tenant for whatever reason, then what happens if the heater goes out, the dishwasher breaks, the whatever goes out? You said it needs upgrades too and if you can just make it already, how will you pay for those upgrades plus any needed repairs in the meantime? Old houses need more upkeep than newer houses which means more money from your pocket. Also, I wouldn''t buy a house that I might outgrow in a couple years (if you have more kids). Everyone else has mentioned you having more kiddos and I think 1200 sq ft is pretty small for kids to be running around in. It is definitely doable but I would chose the 1600 sq ft so they have more room. On the other hand, there is something to be said about the character in an older home.. the coziness.. the unique features..

But I still think practicality would win out...

 

[janinegirly]

I would go with Option #2 because it is less complicated and seems better suited for long term family situation. Plus 10 miles is nothing really.

If you prefer set up of Option #1 (like to be closer to work), consider renting. That way you can feel it out first without worrying about this whole renting the extra space deal. I have quite a few friends who''ve opted for renting this year--I''m guessing it''s a new trend with the market (can''t sell their current place, need more space, and not willing to commit to buying,etc). Not that this is what your issue is, but just a thought.

 

[zoebartlett]

I voted for #2. I wouldn't be crazy about having a tenant in my house, nor would I like the amount of square footage that house would have. The second house you mentioned sounds like a better option all around.

ETA: I wanted to add that my parents' house has an in-law apt. that has a completely separate entrance and you'd never know there was anyone else living there (they've had the same tenant for aboout 4 years now, and they've rented it out to family friends in the past). Their tenant is a great guy and he's done a lot of work around the house and the apt. If I had a similar set up, I might not mind having a tenant. It would depend though.

 

[packrat]

I voted #2 as well, for the same reasons the others gave.

 

[purrfectpear]

I would have opted for #1, but since you mentioned your family would probably grow to include a second child, I voted option #2.

 

[TravelingGal]

I didn''t look at any of the responses before I voted for #2. Woah, looks like a landslide vote!

 

[Linda W]

Date: 7/6/2009 3:18:48 PM
Author: TravelingGal
I didn''t look at any of the responses before I voted for #2. Woah, looks like a landslide vote!

HA, same here. No question about #2

 

[steph72276]

No doubt about it, #2. I think 1200 sq. feet would get really small, really quickly esp. if you add a second child...seriously, kids toys, equipment, furniture, etc. take up a LOT of space. Plus, I would not want to be dealing with a small child and being a landlord. A 10 mile drive to work is nothing!

 

[gailrmv]

Here is what I would do, depending on a few things:

1) Do you and your DH expect your salaries to grow more than inflation over the next few years?

2) Could the rental suite later be turned back into more sq footage for the main house?

3) Is the older area considered more desirable overall (not just because it is close to your work)?

If the answers are yes to all, I would buy in the older area. Live with the older decor and get a tenant. Save as much money as you can. Using your increased income and your savings in the future, I would update the decor and then turn the rental suite back to living space for your family. That is, if you expect to be in this area and in this job for a long time.

We went through something similar a few years ago. We opted for a new, larger home in a convenient suburban area vs getting an older, smaller home that needed fixing up in the most desirable part of our city. DH and I both regret it now. We both wish we had bought an older home that was livable, but could be improved (even added on to) in future years. It would have been a better investment. We may try to move to that older part of the city in a few years. Hopefully we'll be able to update it before moving in.

Don't forget to think about school districts for your children, if it works the same way in Canada as in the US. Here, you are assigned to the school based on where you live. If you are unhappy with the assignment you may be able to request a transfer but it is not certain. Some people opt for private schools but they tend to be very expensive. This is another thing we didn't consider (weren't sure we would have children when we moved here). Currently, our school district is not great. Luckily we have a long time to figure it out!

 

[gailrmv]

One more point to consider - do you colleagues all live in a certain area? Do you expect to become friends with them? I would strongly consider this. Twice now, we''ve found ourselves living across town from colleagues/friends and found we didn''t get invited to impromptu, neighbor type gatherings or we didn''t go because it was too much of a pain to drive across town. If possible, make sure that the people in your neighborhood (either one) seem friendly, seem like people you''ll want to socialize with (and have kids that you''d like your son socialize with) and keep up their properties nicely.

 

[neatfreak]

I''ve got to agree with TDM if the answers to her questions are yes...

 

[nycbkgirl]

numero 2 all the way!

 

[Italiahaircolor]

#2 hands down.

You don''t want to be a landlord. You just don''t. Esspecially not when you''re living right above the person.

You''re already going to have your hands full with the move, the new job, the baby...don''t overwhelm yourself with tenants and remodels if you can help it.

 

[Jas12]

DD--the short commute is what sold me on option 1. Think about adding an hour or so to your day in the car. Will Hunter be with you during this time (i am assuming so b/c you''ll have to pick him up and drop him off for daycare right?) My MIL takes care of Cohen and i have to drive to her place, out of town, and back in. I hate that drive and so does Co. We haven''t seen each other all day so plopping him in a car seat does not make him happy. He puts up a huge fuss the entire ride home (despite my signing to him, giving him toys, snacks etc.) . Obviously you have a different kid and this may not be a problem, but something to consider.
I also like the idea of owning a home in a market that is going to significantly appreciate in value. Even if you do eventually outgrow the space (which will likely happen sometime after #2) you can either sell and make a nice profit, or continue to rent out the whole home to students etc.

 

[vip0802]

how exciting! good luck with whatever you choose!

i voted for option 2. pretty much everything you explained for #2 sounded much more appealing than #1 IMHO. i agree with what D&T said as well. i don''t think 10 miles is too bad of a commute, plus i like the fact that you could spend more time with your little guy rather than worrying about being a landlord. i also like the fact that there are shopping areas and parks close by.

 

[Dreamer_D]

I''m going to start by answering TDM''s questions since these are issues I should have included in my write up about both options.

Date: 7/6/2009 10:38:23 PM
Author: TanDogMom
1) Do you and your DH expect your salaries to grow more than inflation over the next few years?

YES. For me in particular. There is a steep increase in salaries in the first 5 years as a prof, so my income will go up a lot. My husband''s income should also increase, though probably not as quickly.

2) Could the rental suite later be turned back into more sq footage for the main house?

YES. However, I am not sure that reclaiming the space is the best financial option. Where I am moving, probably 60% of homes have suites because property is so expensive. Many/most buyers *want* a suite and so we might actually be decreasing the value of the home by removing it.

3) Is the older area considered more desirable overall (not just because it is close to your work)?

YES! And I can''t beieve I left this out! It is one of the older and most desirable areas in the city. Homes of equivalent size are about $125k more in the older area than in the newer area. This is why we would need a suite to make it affordable for us. Buying in that area would mean buying the "worst house in the best area", which is the real estate mantra.

4) Do your colleagues all live in a certain area?

YES! They actually all live in the older area near the school. Many of the younger faculty are in the same position we are in, however, and are living in smaller houses or renting to save $$ to get into the market.

 

[Dreamer_D]

Date: 7/6/2009 1:41:55 PM
Author: D&T
I voted for #2 option DD, just because both you and your DH will be busy and with a new little guy plus you want to have another one in a little while, and with all thats going on, I think one less thing such as updating is a nice thing not to have. 10 miles is not bad at all jmho, and you have less worries on home maintenance as well for a new home versus #1 option, and bigger living space to boot. Sounds more appealing to me.

Yes ,you hit the nail on the head regarding my concerns about option 1. And 10 mi is not that bad. But in the case of option 1 there is the extra financial gains to be had, also the area is more central and more desirable, and it isn''t too suburban in the sense that it is from the 1960s.

One additional issue is that the people who actually live in the area already are saying that *if* we can stomach it, we should try to get into the Option 1 area. The norm in that area is to have a suite and tenants to help pa ythe mortgage, so maybe it isn''t as scary? Still, seems like such a hassel to me

 

[Dreamer_D]

Date: 7/6/2009 1:49:03 PM
Author: Mrs
DD, I voted for number 2 as well. Given that you''ll likely have another baby before too long and you''ll have family visiting fairly often, I think the larger space would be needed. I also know that I wouldn''t want to share a part of my house with others even if it would net $300 a month - I wouldn''t want to deal with the headaches that can come with being a landlord. I think being able to walk to a store or restaurant is also really nice.

good luck! I''m excited for you!

After talking to more people I may have over stressed this in Option 2. There are outdoor mall areas that we can walk to in Option 1, but it isn''t like a nice promenade type thing. There are areas like that in the city, but the affordable houses are tiny and the nice houses are about $650k!

 

[Dreamer_D]

Date: 7/6/2009 1:57:32 PM
Author: cara
While I hate communting, 20-30 min is not that bad, and I love walkability for shopping. The downsides of option one (rental, smaller, driving for shopping) make me prefer #2. Especially as your husband will not have a sucky commute either way.

Don''t know much about how feasible it is in your location or how interested you are in it, but 10 mi is a doable bike commute especially if its only once or twice a week.

I think that biking occassionally could be an option for sure! There is a really great biking trail that bisects the city and it goes through forest areas adjacent to the highway. It rains a lot though, so it wouldn''t be a common thing.

 

[janinegirly]

dd: I guess I would say don''t mix financial motives with long term family living decisions. If they happen to be one and the same (rare) that''s great, but doesn''t sound like it here. Anything that has to be "stomached" is not sounding great to me! If you guys were childless, just starting out and nothing to lose, that would be different. I say keep the 2 separate--buy investment properties as investments and homes to raise children separately--this makes the decision a bit clearer. Up and coming areas tend to not be ones with great schools, established neighborhoods,etc. And I''m kind of having a hard time imagining a neighborhood/area that consists of multiple homes with rented out suites as being great long term investment anyway...it sounds like an area that isn''t sure what it is yet and with people outside their financial range maybe?

 

[Dreamer_D]

Date: 7/6/2009 1:58:12 PM
Author: KimberlyH
I would be fine living with a tenant in a seperate unit but I would still choose option #2 for the size/space, walkability, and mass transit. Those things outweigh being a mile from work and $300 a month for me.

I should have been clearer: We will actually earn about $800 from the suite, which will pay the difference in mortgage between Option 1 and Option 2, and also result in an extra $300 in our pockets at the end.

 

[Dreamer_D]

Date: 7/6/2009 2:03:59 PM
Author: MustangGal
I also say #2 for the size. We''re in a 1500sqft house, and with just 1 baby and frequent guests, it''s starting to feel small and we''re looking to upgrade to a larger house.

I also would like to be able to walk to shopping, which would be handy to take the baby with you in a stroller when your DH has the car. I also driv 11 miles to work, and it''s not that bad.

This is a major concern for me, for sure! We live in about 1000 spft now and it is a little tight. With my husband working from home, will we feel even more cramped? Probably!