Help- First time buyers. Millennial couple (Plano, Frisco: apartment, mortgage, daycare)

[KTlove2017]

Hello everyone! My wife and I are looking to leave our apartment in Frisco and purchase our first home. We are in our early 30's and would like to stay there for the next 10 years at least We are looking for a town home or a Single family home in the Frisco, Plano, Prosper area. Our budget is 360K and could extend to 400K if we have to. We don't have kids yet, but will be family planning next year after.

What advice would you give your younger self on purchasing your first home, with the budget we have? Where should we move? Are town homes a good idea?

[mSooner]

Nope to a town home. They don't appreciate as well as SF homes and you will be dying for more space/at least a small yard when you do have kids.
I think you are going to be happy at the elementary school level in any of those towns, so you are good to go there.
As someone who did do this 6 years ago, I'd say make sure you leave enough room in your budget for a mortgage + home maintenance. It adds up quickly.

In the first 5 years of owning our home (which was 30+ years old at that point, but had been recently updated). We spent:

--$5000 replacing the Heat Pump System (we knew this was needed going in--check the serial number on the units of any place you look at and you can find out the age)

--$7000 redoing the master bath (and it is a very simple master bath). Obviously this isn't usually a must, but in our case it actually was. The shower pan was leaking into the slab, which required redoing all the tile too.

--$1200 replacing a garage door (including a spring that broke within the first week of living there)

--$5000 on a sprinkler system so the corrected foundation issues didn't happen again. And so we could actually have landscaping that didn't die every summer.

--$1000s on paint supplies, electrical work for new lighting, fence stain, landscaping, new dishwasher when the 2 year old one died, plumbing repairs etc. It adds up.

And if a home warranty is included in the deal, that's great, but they are not a substitute for a home maintenance budget. Ours wasn't worth the paper it was written on and they make you jump through so many hoops. I also didn't like the people they sent out--flat out didn't feel comfortable with them in my home.

[wheelsup]

• Mortgage x2 of your income unless you expect your income to grow substantially (ie doctor). Preferably based off one income, not two.
• Buy for the lot/location not the house
• Buy in an established area with shade trees
• Buy smaller house than pushed into, large homes cost a fortune to heat/cool and are a PITA to constantly clean
• Beware of a recently "flipped" home, I'd rather buy outdated and put my own materials into it
• Learn to do home mx early on, calling a plumber to fix a leaky toilet is expensive, a complete redo kit top to bottom is $20 and can be done in under 30 minutes.
• Buy SFH, single story.
• Don't buy further out just to afford a bigger home. Live nearby the job centers.

[Katana49]

I'll disagree with some of the advice that has been given, I'll get to that.

While not our first home purchase, when my wife and I got our first home together, we used 3X my income... and only my income. She was still working, bringing in about $60k a year. We left her income out for 2 reasons. One, we anticipated starting a family where she would be leaving the work force for a few years, and two, my income was used to pay the mortgage and all expected bills, her income was used for our retirement savings, vacations, and anything unexpected. This worked well for us.

While it's not a must, knowing how to fix things can save you thousands of dollars over the course of home ownership. This is especially true if you buy an older home. If you buy a newer home, there are still plenty of things that can go wrong.

I would avoid buying a brand new home. New homes depreciate before they start to increase in value, not true with older homes. I would say to look for one that is 15 years or less.

There is a huge push in the suburbs for large homes, as people with families want to have plenty of space. For future resale, a young family will prefer a 2 story home with more space. It is older buyers who no longer have kids living at home that are a larger percentage of single story buyers. Also, a larger home does not mean it will cost more to heat/cool than a smaller home. Efficiency is key, many older homes were not energy efficient at all. My 10 yr old 2 story, 3700 sqft home cost less to heat and cool every single month I owned it versus my parents 3100 sqft 30 year old home.

Agree with the above poster... do not buy a townhome. They will absolutely not appreciate well vs a SFH.

[kyam11]

Originally Posted by mSooner

Nope to a town home. They don't appreciate as well as SF homes and you will be dying for more space/at least a small yard when you do have kids.

That is not true. The appreciation part. If that were true you would be able to find townhomes that are 5-25 years old for significantly less than SFH and that is not the case. What actually happens is townhomes lag behind SFH until the spread is a certain amount and then people realize they can get good deals on townhomes and the spread begins to diminish until it is back to the normal spread. If you look at a house that doubled in price over the last 15 years (for example) you will see that townhouses in similar areas also doubled in price over the past 15 years. Another way to look at it if townhomes in city X were 15% less than a SFH 15 years ago they are still about 15% less now than a SFH. IF they appreciated less then those 15 year old townhomes would likely be approaching 25% less than a SFH and that number would be getting larger every year and that is not the case.


What is true is that sf vs sf you can get more for your money when purchasing a townhouse but you will likely be sharing walls and outdoor space.

Having said that I too would avoid a townhouse for some of the other reasons listed above.

[RJ312]

Originally Posted by Katana49

There is a huge push in the suburbs for large homes, as people with families want to have plenty of space.

This is something that I have never understood. For the past ~40 years, fertility rates have been dropping in the United States. Those who have families have smaller families. In that same 40 year period, square footages have increased. Why is there a need for more square footage for smaller households?

[stan4]

If you're willing to get a smaller house and want to fix it up over the years, you can get some neat stuff with a slightly bigger lot in 75093 and have good schools snd access to lots of amenities.

[grilledcheeseftw]

Something that we found to be really handy with young kids was having all bedrooms on the same floor, whether one-story or all up in a two-story. I know master down is very common/popular, but we were very glad to be right down the hall from the kids both when they were babies and feeding in the middle of the night, when they were toddlers and transitioning out of cribs, and still today with our 4 year-old who gets scared in the middle of the night. Tbh, with a 4 and 2 year-old currently, the only way we'd consider a two-story with master down is if there was a functional way to have our bedroom upstairs for the next few years until they're a bit older.

Also, I'm sure you've already done this part, but if you'll both be working once the kids are here, make sure you're factoring daycare/nanny into house affordability, to the tune of a couple thousand a month if you have more than one.


ETA: I would be very conscious of commute(s) also, and sacrifice house size and level of updates for a shorter commute. What might not seem to bad as a married couple with no kids could quickly become quite a strain when you want to have some family time before bed, be closer-ish for emergencies, etc. If that's not possible, buy close to one spouse's work vs. splitting the difference.

[Katana49]

Originally Posted by RJ312

This is something that I have never understood. For the past ~40 years, fertility rates have been dropping in the United States. Those who have families have smaller families. In that same 40 year period, square footages have increased. Why is there a need for more square footage for smaller households?

Fertility rates used to be skewed high as rural households had many children to help on farms. That number has been declining for decades, but affluent families are still having children and having as many as they want, which is exactly who are buying homes around DFW in the suburbs.


Also, people are thinking about their parents. For myself, our last two homes had a "mother-in law" suite... designed for when my mother or my wife's mother became too old to care for themselves, we'd have them move in with us.

[stephwin]

Since you want kids soon you'll need to factor in the potential cost for childcare if you'll both continue working. For instance, I have 2 kids in daycare and my mortgage + daycare is about $5k a month. I would also suggest living as close to work as you can. It's not fun having to drive a long distance from work to home or daycare when your kid is sick or when you just want to spend some time with them before they have to go to bed at 7 PM.