Barrage 'o Questions from First Time Home Buyer

[kuttacondition]

Hello All,

First off I would like to thank the HAIF contributors who helped me select a neighborhood in Houston. After a little meandering through HAR and in central north/northwest Houston, I eventually found a great duplex in Sunset Heights to lease. It has been quite fun exploring the neighborhood (Canino's and the Aurora Picture show are current favorites) and Houston in general. In fact, I've enjoyed myself so much that, to the amazement of friends and family, I'm considering committing to Houston through the purchase of a house. Scary!!

1) House size/resale: My current apartment is 625-650 sq. ft depending on which eye you use for the tape measure. With a hanging system for my bike, this square footage neatly houses my worldly possessions. In terms of space, it works, but well, yeah, another room/larger kitchen would be pretty deluxe. Question. Given that I honestly don't foresee myself requiring additional rooms for children (gasp) anytime in the 5 yr horizon, should I buy more house than I think I need? Does having a 3/2 vs. 2/1 necessarily improve the resale value. Is demand for larger houses greater?

2) Rules of thumb for mortgage size. Somewhat related to the above. I'm looking at doing something like a 30yr fixed. With this I can afford to a house to $180,000 without taking out a second mortgage or PMI. Is there any reason I should look above this price range.

3) Weaknesses/Things I'm starting to look for in houses

I get a little weak-kneed/will pay more for:

a. Proximity to 290, I work near 290 and the Beltway

b. Proximity to downtown

c. Shade

d. Hardwood floors

e. House Security when away (I travel quite a bit)

f. Open floorplans

g. Garbage Disposals

h. Dishwashers

i. Porches/Places to char meat and read

j. Windows that open

k. Modern Electrical

l. Resale/Investment Potential

m. Room enough in the backyard for two people to toss a frisbee

n. Bike lanes

o. Neat built in cabinentry

p. Local restaurant variety

With these criteria I'm looking more and more at the Oak Forest area on the west side of TC Jester. The Heights are tempting but with prices going skyward and 610 not getting any better i think I'm probably going to have to move northward.What other neighborhoods outside the loop do you recommend?

3) Remodel vs. buying already updated: I'm not opposed to putting a little elbow grease into a house (major cleaning, paint, tile replacement, basic plumbing). However, many of the houses I've looked at require more substantial improvements to represent an improvement over my current living conditions. Questions. Should a first time buyer try and tackle a kitchen remodel (add appliances/functional counter tops/cabinets)? How much should I budget for a major kitchen remodel?

Thanks for your help.

Off to do the dishes,

Andrew

Edited June 13, 2006 by kuttacondition

[travelguy_73]

Given that I honestly don't foresee myself requiring additional rooms for children (gasp) anytime in the 5 yr horizon, should I buy more house than I think I need? Does having a 3/2/2 vs. 2/1/1/ necessarily improve the resale value. Is demand for larger houses greater?

I don't think you should buy for what you will need in 5 years. Fact of the matter is that if you are young (say, just out of college) your income will most likely increase substantially in the next few years. Your life will change quite a bit and you will find yourself either outgrowing your home or just ready for something nicer. With that said, 2 bathrooms are an easier sell than 1! More importantly, don't overextend yourself because there are so many changes you will want to make to your first house that you can easily overwhelm your wallet.

2) Rules of thumb for mortgage size. Somewhat related to the above. I'm looking at doing something like a 30yr fixed. With this I can afford to a house to $180,000 without taking out a second mortgage or PMI. Is there any reason I should look above this price range.

Again, don't overextend yourself. Make sure you have plenty set aside for improvements, high utility and homeowner's insurance expenses, decent transportation, etc. Your mortgage payment is only part of what it costs to own a home, I went overboard the first year of homeownership and then found myself paying off all the stuff I bought for the next two years. It is a slippery slope, so go in with your eyes open.

3) Weaknesses/Things I'm starting to look for in houses

I get a little weak-kneed/will pay more for:

a. Proximity to 290, I work near 290 and the Beltway

d. Proximity to downtown

b. Shade

c. Hardwood floors

d. Open floorplans

e. Garbage Disposals

f. Dishwashers

g. Porches/Places to char meat and read

h. Windows that open

h. Modern Electrical

d. Resale/Investment Potential

i. Room enough in the backyard for two people to toss a frisbee

j. Bike lanes

k. Neat built in cabinentry

l. Local restaurant variety

None of those are tough to find (maybe bike lanes, LOL, or windows that open in an old house). You should prioritize: What are the items you care MOST about? You probably won't find all those things in your price range, though you very well could. Be prepared to say "I don't care so much about [insert amenety here] because I can do that myself in the future."

As far as your list goes: You can add a dishwasher/garbage disposal pretty easily to a kitchen remodel, but hardwoods (strong resale) are very expensive to add. And ideally the electrical has been replaced already (until I got my loft, my old houses have always had original electrical and it never was a selling issue). Open floor plan? You can knock down walls, it's easy! Proximity to downtown will cost you in land value, but that land value is pretty much guaranteed to increase (albeit at an unknown rate).

With these criteria I'm looking more and more at the Oak Forest area on the west side of TC Jester. The Heights are tempting but with prices going skyward and 610 not getting any better i think I'm probably going to have to move northward.What other neighborhoods outside the loop do you recommend?

I have a friend in Oak Forest and find it quite appealing. You could get into Timbergrove, but it has already seen a lot of appreciation. Don't know much about the 290 area though--someone else can chime in here.

3) Remodel vs. buying already updated: I'm not opposed to putting a little elbow grease into a house (major cleaning, paint, tile replacement, basic plumbing). However, many of the houses I've looked at require more substantial improvements to represent an improvement over my current living conditions. Questions. Should a first time buyer try and tackle a kitchen remodel (add appliances/functional counter tops/cabinets)? How much should I budget for a major kitchen remodel?

What I have always told my first-time buyer friends is buy something (relatively) cheap and learn how to remodel on your own. The advantages are two-fold: (1) you generally see more $ upside doing it yourself (can afford nicer materials, etc.), and (2) you need to learn how to do some basic home repair/remodel chores and your starter home is the place to learn. I was very happy to learn how to paint, landscape, and build a fence when I knew the future owner's would probably be first-time buyers as well .

Chris

[nmainguy]

A 2 BR 2 BTH is always going to sell better. There is a newly renovated 2/2 across the street from me and a block and a half from the Aurora asking 190K with a frizzbe sized back yard and a 2 car detached garage. I'm betting you could whittle them down to closer to 180K than 190K.

6632 N. Main

http://search.har.com/engine/indexdetail.c...=0&backButton=Y

[jm1fd]

I prefer smaller houses:

1. I don't need the space

2. There is less of everything, and therefore it costs less to paint, carpet, heat and cool, put a roof on, etc etc.

Don't forget to factor in property taxes when you're calculating affordability.

As far as the remodel or buy already redone question goes...my preference is to buy something that needs cosmetic (not structural!!) work. It will cost less to buy, you can redo it the way you want, and when you're done, you'll have instant equity. I would suggest you consider redoing everything before you move in, however. Living in a remodel isn't for everybody.

The budget for a kitchen remodel varies. For a small kitchen, you could paint the cabinets and throw down granite for $3k...probably less. Or you could replace everything with high end custom cabinets, art tile backsplashes, and granite countertops and blow $25k or more. I would look for a kitchen that has good quality cabinets in a good layout, and then just paint or have them refaced and add new doors & drawer fronts put on.

The 77018 zip code should have what you're looking for. The best values are in Shepherd Forest. Oak Forest has seen lots of appreciation, and Garden Oaks is probably out of your price range.