[EMunion777]

Okay so DH and I live in a rather small home (we own). It's a cute little starter home that still needs some work. We have lived here for 2 years and it isn't the best of neighborhoods either. So far we have put in new windows (old ones didn't open), insulation, and new siding. Thank God DH is a handyman and my dad owns a construction business so labor has been free.

My dad asked us these questions and we've been talking about this for a while now.

Our interest rate is already pretty good (4.2%) and after taxes and everything we pay $700/month. Around here it is really hard to find a decent home for that low. Even for rent. We can't afford much more until DH gets out of college in 4ish years but we were hoping to find a home a little larger and in a better area where we feel safe and comfortable. We had planned on putting a several thousand into this home and expanding it. Or we could buy a run down home and use the money towards that. If we fix this one up we'll get more money from selling to put towards the next but we wouldn't know for sure how much.

So now that you know all the background... would you fix up your home (over a couple of years)? Or would you hold onto that money for another home that needs a lot of work? We saw houses that are really run down and $300/month. We can't figure out what might be better in the long run. Any suggestions?

I am sorry if this is rather long and confusing. I have a headache evertime I think about it. We think we should sell this spring since interest rates are low but I just want to know what eveeryone else thinks. Maybe add some things that we hadn't considered. Thankyou.

[crybaby]

Depends on the neighborhood, local schools/ crime rate, and how homes are selling in your area.
You have looked at homes as a buyer, but now look at homes that you will be competing against as a seller.
See how long they are on the market before selling and what they actually go for, not their asking prices.
Look at taxes too in the area you want to move to. Remember to budget in for the increase in cost of living coming in the next two years going to hit us hard and the mess we are headed for in the future economy. If you are buying your own health insurance or your husbands work load lessened think about wwyd in the new mortgage.
Personal safety is more VIP to me then how a home is furbished. Lots to consider.

[crissy148]

There are several factors to consider: are you comfortable in your current home? Is it ridiculously outdated? If you fixed it up would you still fit in with the neighborhood?

I would suggest moderately fixing up your current home (i.e. redoing the bathroom might mean new paint, new vanity, new fixtures, etc but nothing moves and nothing major) so that your budget for your current renovations are in line with the neighborhood.

[RNSAMRN]

I am in the process of buying a home, but it is only three years old. I had a money-pit, and decided that was not for me again. Great if your DH is extremely handy, but otherwise a major headache.

I would not put too much into your current home, just enough to get it sold. My SIL bought a home with his parents that they fixed up, and are living in. They were doing the whole 'flipping' thing before/during when the market tanked, and they lost that game. So now they have invested money into their current home, which is really not in the nicest of neighborhoods. So no matter how much money they sink into it, it is only going to sell for the market value of the homes around it. They are now trying to hold out to sell when the market improves....they may be stuck there for a long time.

So in my opinion...do the important things...sounds like you already did with new windows. Maybe have a realtor walk through to give you some suggestions on where to focus your money on before you decide to sell. You have a really reasonable mortgage now. I would stick it out as long as you can, and hopefully save money up in the meantime for your next home. Sounds like you need to wait for DH to finish school. Until then your income is limited. You want to buy an inexpensive home in the future to keep your mortgage low, so you are going to need funds to make repairs on that home most likely. I don't think sinking much money into your current home is going to give a huge payoff in the end, but once again, check with a realtor and get their opinion. Check to see what homes are selling for in your area.

[EMunion777]

So far the neigborhoods to homes i've found have been in even worse neighborhhoods except for 1. 2 new homes were built next to us. We paid 90,000 for our home.... they are 200,000 homes.... but as of now they are the oddball homes that don't fit in. .

As I have never sold a home I hadn't even thought to look at competetion in the area and how long it may take to sell. If we move sooner rather than later we won't worry about fixtures and paint. They are okay enough. We will be focused on finishing our siding (already paid for) and a new roof (only way to sell this house).

Another thought I had (that I hadn't yet run past my husband) is maybe we could get a really cheap livable home that we aren't fond of and don't want to stay in for about a year so we can pay off our bills quicker and build a savings so we'll be more prepared for renovating the home we want (and for these terrible economic times that are increasingly worsening). Not sure how great of an idea that is. Especially if I haven't found one in a good area.

[SLance68]

First of all remember that housing prices are not going up any time soon (meaning several years). You should do minor repairs - don't add rooms and such as you will never recover the costs these days. This is NOT 2004 it is 2011/2012 and housing prices are still decreasing. Just pay the mortgage and other stuff and save the money for a newer (probably cheaper) larger home in the future.

[RNSAMRN]

Could you rent for a year or so after selling? Might be better than buying a home you don't want...

[nowpoints]

I would not sell or buy a home in 2012, but I'm not you

Crybaby spelled out the details best--too many factors for us to judge that are unknown.
I would go with my gut, and see if it matches what my Father and Husband thought.
If opinions were mismatched, I would write the pro's and con's on a piece of paper and discuss again. Housing prices are not increasing as SLance said.

"In a multitude of counselors, there is safety." 3,000 year old Proverb

[EMunion777]

We'll need to write out the pros and cons because we both keep going back and forth. We have no idea yet what we want to do. Renting is a possibility and we have even considered roomates if we move out to get money together for a home that needs less work. We thought about it and buying a house that's cheap just to get money together quicker for a house we really want is stupid. Selling a house will not be easy now. We don't want to be stuck in a dump. Maybe temporarily renting. We'll keep talking. Thanks guys.

[RNSAMRN]

Well unless the neighborhood REALLY sucks, or you are going to make a decent profit on selling your home, then it is probably not prudent to sell yet. The fact that your husband has four years of schooling to go is a negative. If renting after selling saved your money, then I would say go for it, but
think you said you would pay more renting. Getting a roommate sounds like an iffy thing to me. Too risky. So although staying where you are may not make you happy now, it may benefit you in the long run. But if you fear for your lives in a bad neighborhood, then no of course....get out! As you said, weigh the pros and cons.
I am renting now.
My mortgage plus taxes after we move will be a few hundred dollars more than my rent, but I will have double the space. I also won't be paying someone else's mortgage, but my own. Interest rates are great. I am buying a short sale, and getting a home for roughly $60,000 less than it sold for. I could get a fixer-upper and save money, but in the end I would not be saving, as I would have to fix it up, and it would not be in a nice neighborhood, thus making resale prices worse. So for me, buying now makes sense.
See what is best for you. Do some research, and weigh all the information. Good luck!