Which is the better investment (property)?

Question

There are two houses in the same subdivision one is listed at 225k and the other at 267k. We like them both equally for different reasons. The more expensive one is in a different, BETTER, school district. Which would you buy?

Answer 1

Hi, well you're asking which house I would buy...I have bought houses sight unseen, off of the appraisal and after talking to the appraiser. I strongly suggest you seek the opinion of a local appraiser, talk to them, you don't really need a full blown appraisal, but then again, you're considering a quarter of a million plus, so maybe you should spend $300.00

I suspect in a neighborhood of homes in that price range it would be hard to justify $42,000.00 because of school district, I can't see where the "other school" would be that much better or worse.

There is a golden rule of real estate, location, etc, you know that one, but another one is, buy the cheapest house in the neighborhood, it can be improved, but the most expensive house rarely sells for more. So if I have to buy one of these houses, I'll take the cheaper one! But then my kids are grown and gone! LOL

Nothing against your Realtor, if you have one, but I think they get a commission off the sale price, so maybe they aren't really the one to ask, even if you are related to them.

You might with the local tax assessor and find out what the taxes are and what goes to the schools for both houses. If there is a different assessment, then that might help  explain some of the price difference, assuming these are public schools.

How long do you plan on living in the house, if you will be selling soon, maybe the better school might make a difference, after all, the seller of the house thinks there is a difference, but if you're not relying so much on a near sale, then the school factor is not so important, after all, schools change too.

Seems like there have to be more differences thatn a school, same house, square footage, beds and baths the same, bonus rooms, really, I just wouldn't spend more for something that really exceeded my needs. So again, if the less expensive home meets your needs, go for the deal and invest the difference in the down payment as well as the payments. Look ten years out, I bet your investments with appreciation on the cheaper house is right there with the appreciation of the more expensive home.  This is thinking in general terms, I have no idea what your location is, that's a big factor.

Oh, by the way, an appraiser can give you an idea on the rate of appriciation in the area and what stage or cycle the neighborhood is in, such as new, established with some demand, high demand, great demand, or if it a mature area in slight decline, etc.

As an investment, is the house to be rented? Are you investing in your own home, owner occupied or non-owner occupied. Again, the appraiser can tell you what the rental demand is and what rents are going for. I have never seen an investment property of comparable homes rent for very much more because of a school district.

And, what are the other houses like close to the cheaper house, are they much more? If so, the subject house could be updated or improved, can you put in sweat equity over time?

If the more expensive home has little needed and is as good as it can be, go for the house with room to grow financially, with improvements. That increases the yield on the investment much more than waitng for appreciation, and by the way, home values can go down too, but it's still the best investment out there. Look at your investment in terms of a per centage of the money invested in it, not the total market value of it.

Hope this helps you, Good Luck in your selection! B

Answer 2

the difference in price isn't extreme, but they do vary. Consider how much you're willing to spend, and which house is less likely to give you a headache. if you can afford the more expensive one, and seeing that it is in a better school district, I say, go for it!

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