Townhouse vs. Single family home on Resale
My wife and I are newly married and beginning the search to purchase a home. We live in a nice town in Southeast VA where the three surrounding school districts are all 7+ rated on Zillow (schools outside this area are 5 and below). We like the resale value incorporated with these school districts; however, our money doesn't go very far ($225,000). We can either chose an old "fixer upper" (roughly 170,000), or we can choose an already updated and fairly priced townhouse (200,000-$225,000). We've taken opinions from friends and family which of course are all over the board.
I suppose what I am asking today is a fairly common question. What do we do? We are thinking about making this a 2-4 year home, then either keep it as a rental property, or sell and look to make a small return.
Your question is one that many people struggle with. When looking for a home to buy we tend to drift to the house that we want most. But, just as you are experiencing, often the house we want does not fit the financial resources we have.
I wish I could give you an easy answer, but there isn't one. That is why it is so hard for your make a decision and also why responses from you friends varied so much. You may want to check at www.USA.gov The Consumer Action Handbook is on-line, but you can order one for free. Pages 25 -29 have information on buying a home that may be helpful to you.
I suggest the following for your consideration:
1. Make a list for each house of the pros and cons. Once it is in writing it can suddenly be obvious which is the better choice for you.
2. Meet with your lender to see how much you can borrow, what the payments would be, for how many years, what the interest rate would be. Be sure to ask how much you would still owe after 2 years or 4 years.Remember the amount of a payment is mostly interest with very little going toward the principal.
Thank you for thinking of Extension. Wishing you the best as you make this important decision,