September 29, 2010

Looking at Buying a House

Not long ago I was talking about buying a foreclosure as a rental property.  We even drove out and looked at some properties.   We then put the idea on hold.    Another idea that came up was buying a different house for us to live in and then use our current house as a rental.  This would kill two birds with one stone by getting us a nicer home for us to live in and a new rental property.  So now we're actively thinking about buying a different home for ourselves.

We have been wanting to upgrade our house for a few reasons.

Reasons we have for wanting a different house:

More room.  Our house is about 1400 sq. ft. right now.   Thats plenty for my wife and I but eventually we'll want more room for a family.
Better school district.   Our current house is in a low to average quality school district. When we have kids we'd like for them to be able to go to better schools if possible of course.
Upgraded interior.  Our house is in need of some updating.   The kitchen and bathrooms are out of date and could really use remodeling.    If we're going to remodel our current home and spent a lot of money on that then I might just prefer to spend the money to buy another home that doesn't need such remodeling.
Key amenities.   Our home does not have a dining room and the washer / dryer are in the garage.  We'd like to have a dining room and utility room.   This is akin to having more room but with a specific purpose in mind.
Closer to city.   We live in the suburbs right now which is fine.  However we do go into the city on occasion and living closer to the city would be a little more convenient.

Using our current home as a rental instead of buying another property is appealing for a few reasons as well.

Why renting out our current home is appealing:

No closing costs.   We wouldn't have to pay loan fees to get a new property.   Thats a few thousand dollars difference.
Little work.  Our current house is livable as is and we wouldn't have to fix up a property.
Good house in good neighborhood.  Our current home is a nice house and the neighborhood is nice too.   It would make an appealing home for people to rent.
Familiar with the property.   We are already familiar with our current home so I know the shape of the property.  Everything works fine with exception of some minor 'quirks'.    A new property would have unknown issues and potential failures.

Of course buying a larger home for ourselves would cost more but we'd get the benefit of a larger and nicer home.  We're currently putting extra money into our mortgage so we know we can afford a larger mortgage.  Right now seems like a pretty good time to buy a house.   The mortgage rates are very low and housing prices are down as well.   Of course I don't know for sure if the market is at the bottom but if it isn't then it should be pretty close to bottom.   I wouldn't expect mortgage rates to go much lower than they are now and it seems pretty likely that they will be up 1-2% within a few years.

We're only starting to look at buying a different house.   Its not a definite plan yet, but just something we're looking into and considering.   So far we've looked at the and other online real estate sites to browse what houses are out there.   We have a basic idea of what the houses would cost, but we'd have to do some more looking to know more details.    Another major step will be to get pre-approved for a mortgage.   I am pretty sure we can qualify for more loan than we'd need, but we won't know for sure until we're approved.

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