question regarding real estate for y'all

[tboy]

Ok, I'm interested in purchasing one of two properties:

1) small , ok location, been on the market for 3 months, very reasonably priced and would leave a fair bit of my coin in the bank. (ok property, I "could" live there)
2) 3x the size, awesome location, reasonably priced, on the market for less than a week, but would pretty much drain the savings. (pretty much my dream home)

So, the dilemma is: chose the "ok" property or the prime property?

I have to make a decision by 5 pm monday night.

 

[shadowliquid]

In the real estate biz with increasing interest rates and hst looming market is entering a transitioning phase over the next few years. prices will be coming down buy the first bank your money in a solid investment and wait to see how the market reacts. If you max out on the big house and it's worth 30000 less in a year and you have job security and don't need to sell it doesn't matter right

 

[C Dick]

I would look at the prime property in terms of, if I bought it, with only fixed rate financing, how badly would things have to go before I would regret it? If the answer is one bad month at work and I can't pay my bills, then do not buy it. If the answer is I could take six months off and still be afloat, then go for it.

 

[Brill]

Can you pay it off before you retire without sacrificing basic pleasures?
If so, go for it if you really want it.

Me, I'd go for the "okay" property - as a single guy I view a large home as more of a burden and prefer to live simply.

 

[monocochino]

Go with your Gut...

My advice would be to go with what makes you happy...Decisions in life are what dinstiguish us from each other, it makes us who we truly are. I honestly don't think you can go wrong with any of the two options. Yes option A is the smart, conservative one, and you'll have some extra cash left over, which usually ends up being spent on something else...where option B sounds like the home you've always wanted but your not sure whether it is the wisest choice looking at today's speculations.
Honestly you probably know my answer,but speaking from experience and also being involved in quite a few real estate transactions myself....all I can say is "you only live once do what your gut tells you".
There truly is no right or wrong decison!!!

 

[drstrangelove]

Assuming these are in Toronto, I'd be wondering why the first house has been on the market for 3 months. Have the owners recently lowered the price to what it's really worth, or is there something wrong with it?

 

[tboy]

both are in muskoka where I've recently moved.

The reason the 1st one has been on the market so long is it is small: 575 sq ft. Yes, my plans are to renovate/enlargen and maybe make some money on it down the road if I sell.

The second one is just about perfect. It does need a few things to make it really perfect: a garage, and some interior work.

The conservative option is 1, spend some money and maybe make some money down the road. My concern is IF I run into financial troubles, will I be able to sell it? (even though I have a bigger safety net of about 12 months). One of the reasons I think it's been listed for so long is it isn't a primo location. It is ok, but not primo.

The primo option is 2, I wouldn't have to spend as much to make some money. It needs a garage and I'm told (with a grain of salt) that if I put a garage in, a new kitchen, I should be able to realize a $70K profit in under a year. (that's invest 20K get 70 back, minus closing costs of course). The thing is: only about 4 months safety net in cash. I've also been told that if I do run into financial trouble, I could sell it again in a week. (the seller's R/E agent said when the current owners bought it 10 yrs ago it was only on the market for 3 days).

Option 2 is in a PERFECT location. On a river with a high bank so no worries about flooding (unless we get the old 40 days and nights thing again).

I would normally say no to #2 but it is one of those properties that doesn't come up often and goes fast simply due to the location. The big thing is that no one can build across the river (provincial park), no one can build to the west (due to low bank) and on the east the house is on the other side of the lot so there's about an acre of forest between the houses.

If I had to chose a piece of land to build on (which I was originally planning on doing) this lot would be it. For example: the lot alone would probably go for $100K alone. I've been pricing out building up here and frankly, I couldn't build for this price.

The responsibile thing is option 1, the better investment is option 2.....GRRRRRR this is driving me fricken nuts and I'm usually REALLY good at making decisions......

To tell you how truly beautiful this property is: anyone I've shown it to has immediately said: which is my room? When can we come up? and the ever populr: HOLY FUCK.

(just one other tidbit: I showed it to someone who has made millions on property and he asked 3 questions: when I answered him he said point blank: buy it)

 

[Rockslinger]

both are in muskoka where I've recently moved.

Do SP's make outcalls to Muskoka? Just kidding.

The responsibile thing is option 1, the better investment is option 2.....GRRRRRR this is driving me fricken nuts and I'm usually REALLY good at making decisions......

Go with Option 1. You never know what might happen in the future. At least, you will be less financially exposed with the smaller property. Leave imaginery real estate profits to the pros. Just remember that more money has been lost in real estate than in any other asset class. Just ask the Reichmans, Trizec, Oxford, all the banks, etc. Virtually every real estate company goes bankrupt every 10 years and leave their bankers holding the useless mortgage.

 

[tboy]

Yes, but it is an OVERnight rate GRRRR

Man, if the town wasn't so small, I'd open an outcall agency here because there's NOTHING up here, not even an SC lol.......

 

[Rockslinger]

Yes, but it is an OVERnight rate GRRRR

In that case, definitely go for the smaller property. You need some extra cash to pay these ladies their overnight rate. Old Irish proverb: "Never spend future real estate profits that might never materialize."

 

[tboy]

I'm not really looking at it to turn a profit, but the possibility of not having a problem selling it should I ever run into financial troubles.

To me, it's like going all in at the poker table when you've got 4 aces showing and the other guy has 10 Jack Queen King of hearts showing and he's got one more draw.....

 

[El Mariachi]

Go for option 2 .
Go for your "dream home" . You probably wont be buying a home everyday.

The other house , Option1 has been on the market for 3 months. Thats not a great sign. Probably means you'll have a tough time selling it too.

Go for option 2 because :
Its your dream home. You will actually enjoy your home, whereas the other place, you could "juts live there".

Now whether or not your savings are drained, they are going into a huge investment. The only concern you should have is, as long as you see yourself being able to afford the home and being able to maintain it, (utilities etc) , you should be fine.

Do let us know what you decide, and I wish you all the very best.

PM me when you settle in to your new home , option 2 that is lol

 

[Questor]

I was leaning towards option one after your first post. Then I jumped over after your second post. But I don't know how secure your income source is. Resale option on the second choice makes it less of a risk. I'd go for it. I can hardly wait to visit.

 

[needinit]

Option 2...You said it yourself...location,location,location and I think this applies even more in a rural area as people are buying the views and the fact it can't be built out.

 

[simontemplar]

if you can still afford it when the mortgage rates increase, then buy the one you really want. Less work to do, more enjoying...

 

[jetfuel]

In that case, definitely go for the smaller property. You need some extra cash to pay these ladies their overnight rate. Old Irish proverb: "Never spend future real estate profits that might never materialize."

Is that really an Irish proverb. lol

My vote for option 1 - I think there is another "proverb" that goes do not put your faith in bricks and mortar.

 

[tresearch]

tboy, I hate to say this especially on this site, I may not know much about pussy, but I do know a bit about real estate. After having been a real estate broker for over 30 years I've seen every kind of market there is. I can tell you one thing for certain.....if and when the market does turn.....and you find yourself in a position of having to sell, you won't be able to give away the inferior property. If the superior property is as good as you say it is, to me its a no-brainer. Go for it! But don't take my word for it, nor the listing agent's word. Seek the advice of an experienced agent that you know, or one that has been highly recommended. As a Muskoka cottager since the mid 70s, I would also appreciate it if you let us know when you open the outcall agency....LOL

 

[tboy]

thanks for the advice everyone, went with the better property. The deciding factor was the ability to sell it should the need arise. I think I made the right decision because I just quoted on some work on a cottage, really it needed about $20,000.00 worth of work, fire road access (3 season), no septic, ON lake, hillside, no yard to speak of, and the owner sold it as is for $240,000.00. Now I know lake is much better than river but damn, it was ROUGH.

As for outcall, if I could do it and remain anonymous? I'd seriously think about it but this town is SO small, no SP could live here, everyone would know what she did in less than a week and she wouldn't be able to go buy a quart of milk without tongues wagging.....

 

[Brill]

Good you made a choice.

As for setting up an agency in Muskoka...

Make it part-time and seasonal for the women, have them come up from Toronto as weekend guests. It would be a working vacation for them.
This is something that could be a one-time trial or something more regular, the good part about this business is how little overhead you need and how portable it is. It might be only on craigslist or there could be a proper website set up.
The locals and police would crack down hard, it would have to be very discreet as you're aware.

 

[Rockslinger]

As for outcall, if I could do it and remain anonymous? I'd seriously think about it but this town is SO small, no SP could live here, everyone would know what she did in less than a week .....

Some SP's do "out" themselves. I think Carrie Moon is one.