Advice on housing - Town House, SFH, Rent or Buy?

[EXLIer]

We ( family of 4 )just took a major leap and sold our massive house.  We'll probably walk away with about $200K in our pockets.

Our dilemma is where to go next?  I'm unsure and can't sleep over it.  Our closing is on the 12th of January, and we'll be traveling from Dec 19 to Jan 7.  Literally we'll have a week to move out when we get back.  But this isn't the biggest issue we're facing.  We haven't really located a house!  Here are what I think are our options:

1.  Town House.  Found a nice 3BR 3BA Town House in arguably one of the most family friendly little towns in our immediate area. It's further distance wise from much of our daily lives, but is actually 5-10 minutes faster due to being easily accessible via interstate.  I can pick the place up for ~$200K have no mortgage.  Part of the reason I'm leaning towards it is we're not sure what our future holds 2-4+ years out.  We also haven't found a property we absolutely love.  At the same time, we're enticed by a simple life and since we enjoy traveling so much, a town house seems like a decent fit.  Some appealing considerations are:

     1.  Walking distance to A TON of fun activities for the kids. 
     2.  Paid for
     3.  Low expenses coupled with minimal maintenance. 

I'm aware of many of the concerns with town houses/condos especially regarding HOA's.  We'll be sure to know what we're getting into.

2.  Buy a SFH for $175K ( fixer ) - $325K ( New house in Subdivision ).  We'll have more space.  We'll also have a mortgage.  I'll also have to be responsible for maintaining it.  Going back to the town house, my concerns with it are mostly living on top of people and dealing with the HOA.  We've done it before ( when the wife and I lived in Miami, but that was before kids ) so we're not all the unfamiliar with it.  My issue with a fixer is finding the time, and lately the motivation to fix stuff.  My issue with a newer house is having that mortgage and added expenses and responsibilities.

3.  Rent/Lease - Being a landlord myself ( albeit commercial ) I'm just ( as well as wife ) less in favor of it.  We'll gain more freedom ( can move easily, even less maintenance than a town house, etc ) but with us possibly staying put for 4 years or more being greater than not, the amount of money spent on the rental makes it even less appealing. 

A few reasons are pushing me towards the town house.  The allure of minimalism.  The activities out the front door for the family.  Owning it outright.  Having the option to pull the equity out of it to either buy more rental properties or buy a SFH if we don't like the town house living and/or find a perfect SFH.  We can rent it out if my wife takes a position elsewhere. 

What do you guys think?

[overwhelmed]

Have you thought about renting on short term basis? It seems as though you feel very rushed due to the timeline so a 6 or 12 month lease might offer you the time to decide where you really want to live.
The idea of moving twice can be annoying but probably a lot less than if you purchase something & realize it wasn't the right fit for you. Purchasing either the townhouse or SFH is a lot harder to get out of if you realize it was the wrong decision for your family. If you rent for a bit you can take a breath & take more time to make this decision.

[Field123]

Agreed. I would be very hesitant to commit to a real estate purchase when my future is so uncertain. I think its a huge risk to buy a place knowing that you may have to list it again in 2-4 years. You never know what the market holds and it would be awful to box yourself in and either be stuck with a place you don't want or have to sell at a loss.

Run the numbers obviously because every market is unique. I recommend looking at the NYT's Rent vs Buy calculator to consider the impact of opportunity and transaction costs.

Another consideration would be whether you could buy the townhouse and turn it into a profitable rental after 2-4 years if necessary. Renting sounds like the best choice for you now, but buying may not be terrible as long as there are solid exit strategies.