Should I buy a new home in an ok neighborhood or an older home in a good neighborhood?

Question

I am in Gainesville, FL, which is an ever growing town due to the University of Florida. I am newly married and looking to become a first time home owner. My price range is 120K-175K. I really have 3 options:

1. I can get a house kind of in the ghetto (which the city is trying to restore) for 135K and fix it up.

2. I can get a nice house but built in the late 70's for 170K in a neighborhood that has almost doubled in value in the past four years.

3. Buy a brand new house for 150K, but it is on the outskirts of town.

Anyone with some real estate background have any thoughts? Thanks for your help in advance! :)

Answer 1

I read the expanded question and understand your dilemma. However, your personal residence is not a gamble. Dare I say, even an investment? It is a place for security for you and your family.

Let me put it to you this way... If you were to gamble, would you gamble on the 1-9 team betting that they might actually win this time or do you gamble on the 9-1 team because they have proven to consistently win over time?

I hope that makes your answer obvious. This coming from a guy who runs a foreclosure business that never sees the inside of a property until AFTER they buy it. I take a lot of risks in my line of work. I never take more than I have to, it doesn't make sense (cents, either).

Best of luck.

Answer 2

3. Get the brand new house for 150. That's in the middle of the two price range rise, even though it is on the outskirts of town now, growth will have it quite desirable in the coming years. What are the demographics? I mean if you're a newly married young couple, you'll want to consider looking at schools, and raising kids if that's what you want, so consider that too. Also, since you're a first time home buyer, you're going to get a great deal at the bank better than those on their subsequent houses. So, with that in mind do you really want the ghetto house? You say the city is trying to fix it up, hence that translates to me they've lowered prices so people will buy them and hopefully fix them up to a better standard. Do you have time and experience in fixing a house???? #3 is my best bet for you. #2 would be alright, but remember even though you fix up an old house you still have an old foundation. How long before it needs a new roof, new furnace/'air conditioning unit???? I vote the newhouse.

Answer 3

1. depending on how much you have to put into it, and how much you beilve the negiborhood will improve and property values will go up...

2 highest initial investment, and possibly the highest to restore, electrical and piping are going to have to be looked at after 30 plus years...

3. best choice if you just plan on moving in and not having to worry about anything for the next few years. least expensive choice, as the area grows you wont be in the outskirts of town for long, the property value will proballay increase as more housing is built.

for investment purposes i would say 1 would be the best choice for profit within a few years, while the value has doubled the past 4 years for choice 2 it has to top off somewhere, and may drop, so unless you feel it is still undervalued then it may be worth it, but it also seems it may require the most money for restoral, number 3 is proballay the best choice, as it is move in condition, no work needed, and the negiborhood is going to grow, and property values increase...


I dont own a home, and i am not in realestate, I however have worked in the contracting business, and am giving just my opinion based on observances of my own...

Answer 4

I would make a list of the pros and cons of all three properties. and make sure you take into account the location, price, cost of renovations, conveniences (shopping, restaurants, etc.). and narrow your choice down from that. The newest house will have the lowest renovation costs, maybe some paint, little things. Also take into account how much of a mortage you REALLY want every month.

Answer 5

Older home in a better neighborhood!!

Answer 6

No long winded answer. Let me give you three very valuable words.

LOCATION LOCATION LOCATION