What house to buy?

[wolf_Q]

House #1: 750 sq feet, no garage, .21 acres, good neighborhood, close to my work, has 2 car workshop, older home but in good condition $107k could be worth $120k

House #2: 3200ish sq feet, 1900ish sq feet space to live in (upstairs, its a rambler), the rest is in the basement which is cement and framed in, not finished at all, .61 acres (hard to find around here, awesome yard), older home, 2 car garage, needs quite a bit of work but in decent condition, great neighborhood (its a block from my parents house). $187k on the end of a short sale

[wombat2u2004]

Hmmmm, hard to say without actually viewing the properties.
One is $80,000 more than the other...I guess you have to weigh up which one is going to benefit you most in the long run, and what it is going to really cost you in the long run....eg. mortgage interest etc etc.

I guess No.2 would be my choice if I could afford it, as the "unfinished" portion of the house can be done by myself.......so I guess you have to work out the additional costs of doing that using builders if you are not capable of finishing the home off yourself.

On the other hand........would $80,000 put toward House No.1 bring it up to the standard you would want in the end ?????

I guess you will have to do a little maths.

[wolf_Q]

House #1 belongs to my fiance, he paid $135k for it when the market was high, I'd buy it to get the $8k credit and to lower the interest rates. I think it could sell for $120k but I could buy it for what he owes ($107k). It's a nice house just very small and he wants a garage. There's not enough room with the lot to put $80k into it to add on and it wouldn't add $80k worth of value I don't think.

In house #2 he could do a lot of the needed work, wouldn't have to hire anyone I don't think. We've thought about putting a basement apartment in it. We would have to purchase it together but we can still get the $8k credit if we buy it before we're married. I have a good down payment I'd be willing to use for this house. He wants to keep house #1 if we buy house #2 and rent it out but we really couldn't rent it for much more than the payment.

[wombat2u2004]

Well, then sounds like House No.2 might be the better option.
But do keep in mind, that if you keep House No.1, and rent it out, the rent receivable could be classified as income, and taxed accordingly. I'm not sure if your taxation laws allow for rent received becoming untaxable if the entire amount goes to pay the mortgage on that house.
We have a system here in Australia called "Negative Gearing", which does allow that. Best check that with a lawyer or your taxation office first. You don't want to be faced with a great big tax bill each year.

[pomtzu]

I would go with #2 if you can afford it. The other is a pretty small house and lot, and you would outgrow it in no time. I'd keep looking for a while tho - you might find something else that would suit you.

[BitsyNaceyDog]

I'd either go with house #2 or keep looking IF you're planning on having kids. Of corse if you're not planning on kids then this won't be an issue. But if you are house #2 will be a lot more comfortable. Even if you're not planning on having kids for several years you can be paying down the mortgage and fixing up the house in the meantime.

[wombat2u2004]

Yeah, and the extra land would be more suitable for your pets.

[Karen]

Depends, does either have a husky-safe fence?

[Alysser]

House #2 - more living space, still affordable, more acreage. It seems like number 1 is a little small. Plus there's more room for a certain few dogs

[catnapper]

I was thinking house #2 because of the dogs... until I read that your fiance already owns #1. I'd hold onto #1, do the repairs you want and enjoy it.

We have a large house for just us and the animals. It was perfect for us when we had the 3 kids here, but now its only us and way too big. There are days I wish we had a much smaller house like #1

[Pembroke_Corgi]

I would say #1 because it could be tough to sell/rent the house out in this economy. Plus, it sounds as though you would both benefit from him selling it to you. And a 3200 sq foot home sounds like it would be very expensive to heat/cool. But, 750 sq feet is pretty small, especially with several dogs, so I guess you just need to weigh pros and cons. Good luck!

[caseysmom]

Well considering that we have a rental that has been empty for a year I am not sure about the renting option...your area could be different.

I like more space personally but if your not a pack rat like me option 1 would be fine.

will you be okay if house number 1 is empty for a long period of time?

[gini]

My first thought was about your dogs. House #1 seems too small for everyone to have some space.

I therefore vote for house #2 - or suggest you keep looking. You could also live in house #1 after you are married - see how it works out - and then go house shopping.

[wolf_Q]

Thanks for the replies and input guys, its helpful.

[Logan]

I would not want to start married life with two housepayments (been there, done that...lol...and when house #2 didn't sell, we had to rent and it was just a pain). Why don't you just start in his small home and then consider moving after you've got some time as a couple under your belt? Marriage is a big enough adjustment without taking on a big renovation at the same time. Just my two cents!