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Here is the deal. We are looking at homes and all our ducks are in a row. What I am wondering is it better to buy an older home that needs work, and I have the ability to do all those things that the home needs, or to buy a newer home that is more modern updated but cost more?
One home was built in 1978. It is a 4 bedroom 2 bath home with a 2 car garage, single story. It sits on a 6,000 Squre foot lot and has 1,500+ square feet of space. The neightborhood is well kept and as it sits the home has minor cosmetic work. Nothing too hard to handle. No other amenities in this home, just basic home. Still not sure what the electrical or plumbing looks like after all these years. It is listed for $250,000
The newer home was built in 2003. It is a 4 bedroom 3 full bath home with a 2 car garage. two story home. It sits on a 4,800 square foot lot and has 2,100 square feet of space. The neighborhood was started in 2001 with a new high school built in 2001. The neighborhood is well kept but then it is less than 10 years old. The roof has a 50 year tile roof on it and should not need anything for the next 40+ years. Everything is modern. The home has AC, forced air heating, a fireplace, and media area. It is listed at $335,000
It should be noted that if we were to buy the first home we would want to make upgrades to make it more modern. The problem is that I have not priced out what I want to do. I have the ability to do the work needed to make the improvements. The newer home is just the way we would want it now, but cost a little more.
Four bedrooms in a 1500 sf house seems like one too many in my mind. The public spaces, kitchen, circulation, closets and bathroom sizes are probably all compromised because of cramming that extra bedroom in there. Other than that you have left out far too much information on neighborhood, schools, convenience, walkability (deal breaker in my eyes) also, the budget of renovations. I think the whole one story vs two story may have the most relevance here depending on your family situation.
I'm not a fan of newer homes generally, that is, post 1950s, and older, established neighborhoods are almost always better in my mind. As an architect I could quickly discern the potential, or lack thereof of both, (a smartly designed addition on the larger lot, older single story might be just the ticket if the home is small for the area) but your needs and aesthetics are likely different than mine.
Two other things to consider. What is the difference in taxes between the two? Would you have to pay PMI for the more expensive home and not for the cheaper home? That can be a lot of money over time.
Both are in good locations within our city. The same school district for both but different high school. Both are close to amenities, shopping, parks. The newer home being down the street from a park and the older home around the block from a park. The older home is in a neighborhood of homes that are all similar in size and look. Nothing to distiguish the differance other than orientation on the lot. Homes on that street are either 3 bed 2 bath 1,300 square feet or 4 bed 2 bath 1,500 square foot homes. All of them look the same.
My thought is that we would want to add on to the older home eventually. With the newer home we would keep it the way it is.
Taxes are the same or in our area 1.25% property tax. We will be puting more than 20% down so will not need to pay mortgage insurance. With the older home we could pay 20% down and still have money left to make upgrades. With the newer home we could put 20% down but would not have any money left for upgrades but would not need any. Maybe that is the real question here.
We had the same dilemma a little over a year ago when we bought our house. Two houses in the same general area, same schools, same type of neighborhoods etc. We relocated to a new state and fairly newish area so most of the homes are from 1975-2010. No classic architecture. Personally I am not a fan of 1970's architecture. So for me, I do not see too much of a difference between that time period and something built in early 2000's in terms of quality. I think the newer homes are more energy efficient though. We chose a house that was built in 1994 vs the home that was built in 1978. For me it was the layout. I prefer two story homes and I liked the more modern update of the floor plan vs the home built in the 70's. The 70's house had a very small master bathroom with only a shower. There also was no family room. The drawback was that the newer home has vinyl siding where the 1978 home was brick but it was that typical 70's brick. Very dark brown and I did not like it all that much.
My husband and I have renovated many homes over the years and we decided a house with less work would fit our needs better. We paid 50k more for the newer house that did not need anything done. It was worth it for us but I have to admit sometimes we itch for a project and there really isn't one. The neighborhood we chose does not have as many mature trees and that is definitely a drawback when you go with a newer sub. Lucky for us the original owners had good taste so when they had the house built they chose classic and it has kept the house feeling very new. Most people are surprised when they see our house as they think its only a few yrs old. Also the owner planted a ton of trees upon moving in so my backyard is full and lush. No barren feel at all but there are many parts in the sub where no one ever planted a tree so it looked a little bare.
The square footage is key. The bigger home is actually cheaper per square foor - $154 psf vs. $166 psf for the older home that needs updating. If they had been the same size - I would have voted for the one-story home, as $75K is plenty for upgrades.
The square footage is key. The bigger home is actually cheaper per square foor - $154 psf vs. $166 psf for the older home that needs updating. If they had been the same size - I would have voted for the one-story home, as $75K is plenty for upgrades.
But where does the 75K come from? It's not like because you buy a house that is 75K cheaper you have that cash to do upgrades. If you are financing 80% of the purchase price you are only going to have 19K of that savings in your pocket.
Will the older home be "over-improved" for the neighborhood after you're done with it?
We bought a 1970's home because, as fallingwaters mentioned, we loved the trees. Also the larger lot was a big draw for us. Plus, we love DIY projects. (Ours was already 2600 sq ft. though. Just ugly! LOL)
HOWEVER, I will say - I wish we would have looked more closely at the energy bills here before we moved in. The windows are terrible and the insulation is nil. Our first electric bill, our jaws hit the floor!
Have you met the neighbors? We are so lucky we have the nicest neighbors on both sides of our 70's house. They were original to the neighborhood. Maybe you should talk to both neighbors and see how they like it there?
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Personally I am not a fan of 1970's architecture. So for me, I do not see too much of a difference between that time period and something built in early 2000's in terms of quality. I think the newer homes are more energy efficient though. We chose a house that was built in 1994 vs the home that was built in 1978. For me it was the layout. I prefer two story homes and I liked the more modern update of the floor plan vs the home built in the 70's. The 70's house had a very small master bathroom with only a shower. There also was no family room. The drawback was that the newer home has vinyl siding where the 1978 home was brick but it was that typical 70's brick. Very dark brown and I did not like it all that much. 
