When you are in the market for buying a home there are an unlimited number of things to take into consideration: the year the house was built, the number of bedrooms, location, yard size, and so on.
When my wife and I first started looking last summer we had a few things in mind that we wanted: 3+ bedrooms, central location between the two major cities, a house that has some room for sweat equity/improvements, and one that we could rent some day if we needed or wanted to.
Today I want to go into more detail about a few things we were looking for in a home:
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Location
Location was a huge factor for us. First of all, we wanted a central location because we’ve both lived in second or third ring suburbs and it really can make it difficult when you have friends/jobs/places you go all over the metro area. The better the location in relation to the two major cities in Minnesota, Minneapolis and St. Paul, the more expensive housing can be (of course this varies by neighborhood).
We looked primarily in the middle of these two cities, which has its pros and cons. One pro is that there is a lot of demand for houses in this area, which will help when we decide to sell. One con is that you get less for your money; we could have gotten a newer and bigger house if we had picked a suburb farther from the cities. As young adults who will certainly switch jobs, if not companies, we didn’t want to pick a house in a far-flung suburb whose commute alone would rule out a bunch of potential employers.
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Bedrooms
For many reasons we wanted a house that had three or more bedrooms. Even with just the two of us, the three bedrooms would be spoken for immediately between our bedroom, the office, and the guest bedroom. We essentially ruled out any two bedroom houses.
We found one house that was in our budget and nearly fully upgraded. We even went back for a second showing. The one downside? The third bedroom was 9×9, but part of that floor space is taken up by a closet. On top of that it was in the basement, which is not as desirable as a third bedroom on the main level. Thinking about resale value and potentially renting it out down the road we had to pass; there certainly had to be others who think like us and want that three bedroom minimum. We ended up purchasing a house with three bedrooms on the main level and a large fourth bedroom in the basement. The fourth bedroom was set up as a studio apartment, and we currently are in the process of getting it ready for rental and finding tenants. More on that in future posts.
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Good Value
While we certainly would love a fully updated/renovated house, we also wanted to find a house that had room for us to add our own value through small projects. The house we ended up purchasing not only had outdated features but also wasn’t staged whatsoever (good for us as buyers, but not so good for the sellers; investing a bit into the house almost certainly would have brought higher returns). This allowed us to get a good deal on the house.
Since moving into the house a couple months ago we have been working our way through an initial list of upgrades we want. These include such things as new doorknobs, a fresh coat of paint, new blinds, new light switches, etc. After finishing our initial sweep of relatively low-cost upgrades, the house will look 10x better than it did when it was on the market.
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Good “Bones”
After looking at ten or so houses, it become very apparent that some houses had major expenses that were inevitably going to come with purchasing the home. Some had siding that had seen better days. Others had air conditioner units and water heaters that would need replacing very soon. As first time homebuyers and young adults, we simply did not have a huge cash reserve to deal with these inevitable and necessary fixes. The house we ended up buying had a new roof, siding, water heater, air conditioning unit, and furnace. This was a major selling point for us, since we (hopefully) won’t need to make these major upgrades for at least a few years.
There are hundreds, if not thousands, of variables you can consider when looking for your next home. It can be a bit overwhelming when you are trying to compare houses based on a list of 30+ factors. Instead, recognize what is most important for you in a new home.
What will you look for in your next home? What factors are most important to you?
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Photo by ArmChairBuilder.com
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Good post. We’re going through this process right now as we’re deciding on how to remodel our master bath. Do we want to just to go basic and replace the shower (as that is the problem), go full out and redo the whole thing, or somewhere in between.
@FrugalRules
Tough choices. I know at our house they have all new appliances and a new shower in the basement, but it’s definitely not “top of the line” by any stretch of the imagination. It is NEW tho, and as buyers we definitely looked at it differently than we would have if they were outdated appliances.
There are a number of big upgrades I would like to do at our current house but many I will never do unless I know this is the house we are going to be in for the next 15+ years, and I honestly can’t say that at this point.
We still haven’t really decided what we’re looking for. We do know that we want to buy our next house in 2014 though. We are torn whether we want a big house in the city or a house with land.
@SenseofCents I would vote city, but lots of land is always nice to have.
@DC @ Young Adult Money Luckily, that’s the good part of St. Louis. Houses close to the city have land! But we just can’t decide how much land haha.
@SenseofCents That’s great! Minneapolis/St. Paul you can get a ton of land….but you WILL have a terrible commute almost guarenteed. I know a lot of people who drive 30-40 miles to get here each day.
These are pretty much all of the same items on my list for a house. After living in our house for 8 years, I also want one that has good water pressure. Ours sucks pretty bad, so I think I might take a shower when doing a house walk through, just to check!
The next house we get I think I will notice/test more things, like the watetr pressure! Ours isn’t bad, but it’s those little things that you wish you had checked. I think next time around I will just be more detail-oriented, though I do think focusing on the major things initially is the way to go.
thanks for these tips. I’m currently searching for a new house and i want to make a good chose considering the crisis
@Kai Mentz Awesome! I’m excited for you. House hunting is so much fun.
I totally agree about “good bones.” There are a lot of 10-15 year old neighborhoods in my area with shoddy construction. The neighborhoods have gone downhill and the houses are selling for much less than they were bought for.
That’s really too bad. I have heard that newer construction can sometimes be worse. I feel like sometimes it can be really hard to tell unless you have a background in construction or are very knowledgeable on the topic. I feel bad for those homeowners…
When we went looking I was interested more about the bones and the ‘must haves’ on our list rather than renovations. In fact I didn’t want to buy a home that was renovated because after the shady work I was seeing looking house after house I decided nope, I’ll do it the right way and make sure it’s done right. Our next house I will do the same and maybe look for more land but this house hit the mark with all we wanted. Mr.CBB
@CanadianBudgetB One thing that worries me about doing too much DIY on our new house is that when it comes time to sell people won’t be comfortable with the fact that we did a lot of it instead of hiring a contractor. It’s a topic I need to look into more before doing any major renovations.
My wife is an interior designer, so she knew EXACTLY what to look for. She found a house with “good bones”, and then could imagine all of the things she wanted in there, paint colors and all. I’m no good at that stuff, so I let her make our house look awesome, and then just brag about her :)
@iHeartBudgets My wife was an interior design student before switching to psychology, so she probably thinks similar to your wife. She picked out color pallets for each room: )
Our next house will be 3 or 4 bedrooms and will likely be in town. We’d like a newer home because the older ones just have horrible layouts and curb appeal in my town.
@Money Life and More When do you think you will get your next house??
Nice post DC! I prefer to buy new and always in a popular neighbourhood. And you are right, 3 bedrooms always re-sells well.
As well, while I live in my home I always keep my home in show home condition so that it is quite easy to sell. 3 years ago this month we woke up one day and decided it was time to sell our 4 year old home. It was a two story with a basement walkout, 3 bedrooms, 3 baths and in a very popular family sub-division. It sold in 8 days for full price and we were out in 15 days after that.
@TacklingOurDebt That’s incredible how quick you moved. I would love to buy new just wasn’t in our budget ;)
Good bones are very important. Plus a good school system can also have a huge impact on resale. Very few people with children want to live in an area with bad schools. So that saying of location, location, location is very very true.
@JustinatTheFrugalPath Yep school system is very important. There were some comparable homes in a very sought after school district that sold for more than the house we have, and they have smaller yards, smaller interior, only 2 bedrooms upstairs, etc. People are all about the schools.
When we bought our house I think I considered all of these enough but the one aspect I didn’t is the appreciation of the market. Because I live in a low cost of living area an $8k bathroom remodel doesnt result in the same increase it would in a higher cost of living area. Now we have to admit to ourselves that any improvement we plan on doing is for our own benefit and at best we break even on the potential sale of the house in 3-4 years from now.
@Jon H That’s a good thing for me to keep in mind with this house. I already know if we poured something like $100k into it (theoretically, of course), we probably won’t get that money back because it would lift the house out of range for many buyers.
I think lots of people get caught up in the house and don’t always consider resale value, but you really need to unless it is your forever home.
I consider distance from public transport, as well as a university or big company if I need to rend it to students / workers.
When we purchased our last condo, we were really focused on location and rental value. The size is on the small side, but not unusual for Vancouver.