Author Topic: Buying new construction or buy old house closer to work  (Read 4754 times)

noviceatinvesting

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Buying new construction or buy old house closer to work
« on: January 08, 2015, 12:56:46 PM »
We've been looking at houses for a little while in the expensive DC metro area. We are currently renting and can't stay in our apartment much longer because it is just too small for our family. After looking at the expensive, old, mostly outdated houses close by my husband's work, I've been drawn towards the new construction about 20 miles away from his work. We can purchase a new home for about $650k and it could work for us in the long term. The houses near work are at least $650k and might need some work. It is also a lifestyle choice. The new construction would be part of a planned community (with pools) but of course the commute could really be a bummer. I suppose there are other areas we could look at that isn't quite so far away and maybe be a little bit cheaper. There are under $500k homes not too far away from work but the schools are not great.

We have $290k in our savings account (thinking about putting down $200k for down payment), $250k in retirement and $150k in non-retirement index funds. HHI is 128k. Currently our expenses are about $5500  a month so we may have around $1k left over each month. I think money will be tight after we buy a house since we will also need to buy another car with cash (husband walks to work now). I don't think I can convince him to bike to work ini the future.

I am at a loss for what to do. Should we wait until the spring market picks up and maybe try to snag a modest home (cheaper than $650k) maybe not right by spouse's work but closer than the new construction? We have to start building right away if we want to be in the new home this summer, so timing is of the essence. Thanks in advance for any advice. I am terrified of making the wrong choice. This decision impacts so much!


Future Lazy

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Re: Buying new construction or buy old house closer to work
« Reply #1 on: January 08, 2015, 01:03:22 PM »
Sounds like this is Cost of Home Repairs vs. Cost of Commute

If a commute is $0.51/mi, that makes a 40mi round trip cost $20.40 per day. If you commute 5 days a week all 52 weeks in a year, that could be as much as $5304/yr, or ~$53,000 over ten years.

Do you think an older house close to work would suck up more than an extra 50k in ten years, not including comparing against the cost of a new car you might need to purchase?

Jack

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Re: Buying new construction or buy old house closer to work
« Reply #2 on: January 08, 2015, 01:11:14 PM »
One one hand, you could choose a "new" house (built as quickly and cheaply as possible by the lowest bidder), in a pretentious "planned community" with an expensive HOA (to maintain the pool, among other things), that entails a ridiculous clown-car commute that sucks up not only your money but also your precious free time.

On the other hand, you could choose a well-built house (you know it is because it's already stood the test of time) that has character yet also provides an opportunity for you to customize/update it to your taste, where there are no HOA busybodies and fees and where you can walk or bike to work.

Why is that even a hard decision?

noviceatinvesting

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Re: Buying new construction or buy old house closer to work
« Reply #3 on: January 08, 2015, 02:51:20 PM »
An older house would be also quite a bit smaller in square footage. So not only would we have to put money into an old house, we may need to expand it a bit to fit our family of five. Also older homes are less efficient, right?

Future Lazy

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Re: Buying new construction or buy old house closer to work
« Reply #4 on: January 08, 2015, 03:21:02 PM »
An older house would be also quite a bit smaller in square footage. So not only would we have to put money into an old house, we may need to expand it a bit to fit our family of five. Also older homes are less efficient, right?

Or downsize your stuff to fit five into 1500-2000sqft instead of 2000-2500sqft?

The difference of 500sqft often amounts to the space of a single large bedroom... (From the perspective of a married woman living in 500sq ft currently, including storage).

Older homes are only less efficient if you don't update them. Blown in insulation and new windows/doors go a long way in any house, regardless of age, and usually come with tax credits if you do them yourself. Otherwise, search for an older home to buy that's already been through these updates.   

It's really worth being closer to work.

How much is DH paid, per hour?  If he's commuting 1hr every day he commutes, 5 days each week and ~52 weeks a year, that's 260 hours spent commuting. That's almost 11 straight days spent in the car, driving to/from work, per year. That comes out to 108 days of driving, over ten years of commuting. How is that fair?

Remember, this is where a "day" is 24 hours. 108 days of his life spent just driving. 2600 hours, driving. How much would DH be paid if he worked those hours instead?

rocksinmyhead

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Re: Buying new construction or buy old house closer to work
« Reply #5 on: January 08, 2015, 03:26:46 PM »
One one hand, you could choose a "new" house (built as quickly and cheaply as possible by the lowest bidder), in a pretentious "planned community" with an expensive HOA (to maintain the pool, among other things), that entails a ridiculous clown-car commute that sucks up not only your money but also your precious free time.

On the other hand, you could choose a well-built house (you know it is because it's already stood the test of time) that has character yet also provides an opportunity for you to customize/update it to your taste, where there are no HOA busybodies and fees and where you can walk or bike to work.

Why is that even a hard decision?

haha, this is exactly what I thought. I fucking hate commuting and would do almost anything to avoid it. what a life-suck!

MsPeacock

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Re: Buying new construction or buy old house closer to work
« Reply #6 on: January 08, 2015, 05:36:32 PM »
Commuting in DC traffic is soul sucking and horrible - and 20 miles can easily turn into 1+ hours each way. Do you know that DC area also has the highest accident rate (the average driver has a collision claim on their insurance every 3-4 years)? It sucks. Buy as close-in as possible in a decent area. Agree w/ PP about better construction, cost of repairs vs. commute, and downsizing.

MBot

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Re: Buying new construction or buy old house closer to work
« Reply #7 on: January 08, 2015, 09:41:55 PM »
The problem with new homes is that you often get terrible quality. With an older home you know what you're getting (inspection, often better construction like double brick) and people are experienced in repairing them and making them efficient.

For what it's worth, I think it's worthwhile to live in a place where the school districts are good, otherwise you will encounter problems later.  The idea of compromising a bit on distance and school district to get a slightly cheaper house doesn't seem worthwhile. For your income and savings level that's not an enormous difference in price for the school hassle down the road.

In this forum you're going to get advice to live closer and commute less. More so than cost, time is very precious. Hours of commuting and increased cost plus vehicle cost are just soul-killing and bad for health too. Think about the schedules you want to have and the life you want to live.
« Last Edit: January 08, 2015, 09:46:24 PM by MBot »

GoldenStache

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Re: Buying new construction or buy old house closer to work
« Reply #8 on: January 09, 2015, 08:03:40 AM »
Roughly, where does your husband work?
Arlington, Alexandria, DC, Tysons, Rockville...?

If he's commuting 1hr every day he commutes, 5 days each week and ~52 weeks a year, that's 260 hours spent commuting. That's almost 11 straight days spent in the car, driving to/from work, per year. That comes out to 108 days of driving, over ten years of commuting. How is that fair?

20 miles is at least an hour, probably 90 min most days commute each way if he is driving.  So double the 260 at a minimum.

Would he be able to take the train or metro? Close enough to walk to metro? Does he get a transportation subsidy?


noviceatinvesting

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Re: Buying new construction or buy old house closer to work
« Reply #9 on: January 09, 2015, 09:09:27 AM »
Roughly, where does your husband work?
Arlington, Alexandria, DC, Tysons, Rockville...?

If he's commuting 1hr every day he commutes, 5 days each week and ~52 weeks a year, that's 260 hours spent commuting. That's almost 11 straight days spent in the car, driving to/from work, per year. That comes out to 108 days of driving, over ten years of commuting. How is that fair?

20 miles is at least an hour, probably 90 min most days commute each way if he is driving.  So double the 260 at a minimum.

Would he be able to take the train or metro? Close enough to walk to metro? Does he get a transportation subsidy?



He works in North Bethesda. He would be driving on the 270 from 20 miles north. No public transportation options, I don't think.

GoldenStache

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Re: Buying new construction or buy old house closer to work
« Reply #10 on: January 09, 2015, 10:19:04 AM »
That area is tough.. Great schools for a very high price, or not good schools for a high price.

He might be able to take the redline metro or MARC if you are thinking around Germantown.  I have a coworker that lives in Germantown and likes it.  Long commute but his subsidy pays for most of it using public transportation.

$650k at that distance would a helluva house.  If you think you are going to be tight, you are going to be very tight.     


MsPeacock

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Re: Buying new construction or buy old house closer to work
« Reply #11 on: January 09, 2015, 09:56:56 PM »
Have you checked out living in/near Kensington?  Close to Bethesda, but house prices are lower and schools are good. Consider the neighborhoods between Wisconsin ave and Connecticut aves as possibilities. House prices are crazy though. But traffic on the beltway and 270 is rough. I work in Bethesda with folks who commute from Fredrick and it is brutal. Always bad traffic, they come in super early, like 5am and leave early to try to avoid the worst of it. Either way is 2 hours in the car each day for the commute.