If you can afford to rent while the work is being done, I would go for the fixer upper. Yes, renovation is expensive and messy, but there is no guarantee that you will find a "perfect" house elsewhere; at least this way you know you will have (more or less) exactly what you want after renovation, in the neighborhood you prefer.

Go for the neighborhood you know.

Living in a renovation sucks, but you already like the neighborhood.

How bad is the layout?

As Imstillchloecat said, the three most important things to look for when buying a house are location, location and yes, location. That will over the long term trump everything else.

Just about anything in a house can be updated, upgraded, improved and remodeled from the roof down. With enough time and money you can alter a layout, replace windows, insulate, upgrade electric and plumbing, remodel kitchens and baths...... but the location doesn't change and is the huge subjective element in value to an individual. Still, with saying that, put the time and effort into learning about the other potential locations. There are wonderful neighborhoods besides the one you're in now. You never know - get out of your car and walk around in one of the possible places and you just might people living there that give you a new perspective.

The 4th most important thing in buying a house is 'location' too.

What imstillchloecat said!

Fixer upper In the neighborhood you like, hands down!

Just to add- I bought a fixer upper (gut job) in a neighborhood I coveted. I owned a townhouse so I lived there during renovations. I moved in as soon as it was liveable and I have slowly been finishing the work (including an addition). Meanwhile, the home values in the neighborhood have increased much more than if I bought a cookie cutter home elsewhere. The older ranches are being bought, bulldozed, and 3-4 million dollar homes put in. This has helped the value of my home also.

The better neighborhood will win. But not if the renovations put you over your budget. Renovations are not TV cheap and quick. They probably cost double to triple to what you think they will, and take twice as long.

Make a Priority list for the house. 1, 2,3. Must do Now. Need to do Later. Would like to if we ever have the money. If you have more than 2-3 #1’s, then you’re not a candidate for a fixer upper unless you have a much bigger budget than your average couple buying their first house usually has.

http://www.remodeling.hw.net/cost-vs-value/2018/

https://www.gardenweb.com/discussions/5249252/unrealistic-expectations

The older ranches are being bought, bulldozed, and 3-4 million dollar
homes put in. This has helped the value of my home also.

Ah, someone gets it!

***

Interesting cost estimates. But if you have any diy skills at all, many can be done for much, much less. For example, I remodelled a 2 pc. powder room for C$700. Of course, no granite, I sprayed the existing vanity, high end peel and stick flooring.

I would agree strongly that a good neighborhood is highly valuable, and the ability to send your kids out to play with the neighbor kids rather than drive them all about town is invaluable.

It is often difficult to be sure what people mean when they write posts, but I was a little nervous with the words "the layout needs work". If you are planning a renovation with major changes to the layout you may be quickly surprised by the cost. If you want to open a non-load bearing wall in the kitchen for a more open concept and add a closet somewhere that is probably doable. If you want to take down all of the walls so that you can have a "great room" and a larger master bathroom and make the other bedrooms smaller to have the space for the master bathroom it may be far more expensive than what you are considering.

I love my 1920 house and a I love my street and I would not want to live anywhere else. But updating heating systems, a/c systems, plumbing and electrical is expensive and if I did not realize how much those things were going to cost I might start to regret the purchase of this house. We have lived here 9 years and are just now doing the major renovation of the kitchen. I am thrilled about how it is going to turn out, but there are just a lot of constraints on the layout based on the space and beams and making a doorway 36" rather than 30" really add to the price tag quickly. My kitchen was last renovated in the 1950's with a "cosmetic upgrade" of an olive green fridge, a green formica countertop and I think the integrated stainless steel sink into the stainless steel portion of the counter in the 1970's.

If you can come up with "our long term goal" and "what needs to happen to move into this house now" the plan will be more workable.

In order to make money on a flip, you need to cut corners, usually serve as your own GC and have a long term relationship with your workers. The design aspect of a custom renovation will mean that a fully renovated house (especially with floor plan modifications) will cost more than I would expect you would be able to sell it for.

If it's just the laundry room, get a 24" stacked Bosch ventless washer dryer which can be installed anywhere. I have installed mine in one of my closets :-)

The fact that you can live close while this is going on and have your life actually disrupted the least with a reno - just adds more pluses on to the location.

Work with a good architect and make the changes that matter. Don't go overboard - but make it yours.

Depending on how much you want to spend, the laundry can be moved and the kitchen can be opened. If you see this house as an investment in a good neighborhood, think of things that will bring your house more in line with other updated homes in the neighborhood in case you ever sell. Of course, you dont want to go crazy.

If you know what renovation involves then definitely go with the established neighborhood. I have just seen some zany renovation requests here (we'd like to change the 8' ceilings into 9' ceilings was one example). It will continue to be valuable...we liked having kids in the neighborhood when we moved here when my son was 3 and we still love it when he is 12...he can walk home from school with his friends, which is great for independence. He wants to move back home and live in this house for ever! (And our nextdoor neighbor is 85 and living in a house that her family first moved into when she was 16)

When I was getting overwhelmed with planning for reno and permits, etc, I went into a new development's model home...our location is much more ideal and once those houses loose their "newness" their just won't be very much too them (or any space to change them!)

Be sure to let the neighbors know you are looking...they might know someone else who is ready to downsize that would be interested in selling without the stress of the listing and would let you get some estimates for the cost of something like the laundry room. With kids in the picture, be sure to also make sure that you have the lead pain issues covered.

ditto on renovating. Just get GC pricing if you can from subs. You can save ALLOT of money.

Yes - you would likely need a GC but depends on region and bank.

Have you considered a full tear down? We are renovating an 80s house now in a great location (while we build 5 miles away - don't ask). This neighborhood has a few tear downs and I haven't been here long enough to see what the original was. But when you get to 50s with minimal things you can save, it borders on tear down - although that is very regional.

Our primary house b build was a 50s tear down. It was disgusting, falling apart etc. The nieghborhood is a originally 40s and 50s and it is tear down central. Reno's are hard and things are always discovered. At some point - it isn't worth it. Short of historic charm, 70 years is a pretty good life for a structure. The insulation, plumbing, electric, and layout are just wrong. The new build will be better in most ways and designed for 100 years (hopefully).

Think lead and asbestos when you get to the 50s.

I would have advised you to go to the new neighborhood. This would have been because you were new homeowners and you had unreasonable expectations. You disclosed that you have done some renovation in your past. This makes me comfortable in advising the renovation house. You probably have a good idea of what is involved.

You can suck up the laundry in a bad location for a few years. You can suck up a lot of what is wrong. But, you need to get the safety, unglamorous things done first. You need to get this house at the right price. Just check to be sure the electrical is safe, the roof is good, there is no water in the basement and the condition of the HVAC systems. If those are good, the rest can be mitigated over the years.

This is our second home. When we left our first home right after completing the renovation we swore to ourselves a move in ready is what we want for the second time around. (We essentially did a flip without meaning to because of work circumstances) Hence the reluctancy to do it again. Like you all mention there is always SOMETHING that needs fixing that isn't cosmetic or seen but extremely necessary HVAC, insulation replacement, electrical updates, sewer line patching...etc. The first time around though we lived in it while being fixed up. While most of it wasn't so bad since we just closed off unfinished portions. We didn't move in until walls and floors were done. However, living without a kitchen was torture. Doing dishes in a bathroom sink gets old fast. So that would be the first thing for sure outside of structural issues.

I am worried that this might end up being a tear down once all is said and done because of its age. The neighborhood house are all about the same age. In fact the house rental we are living in now was built around the same time. I would say 80/20 renovation vs. total level and rebuild. It is Phoenix AZ so perhaps the arid weather is a little easier on structures?? Our really good friends just bought the flip/renovation down the street from us with the same structural age. They did not do the changes themselves however, and are finding the choices to be obviously what was cheapest and quickest. So hopefully it won't be a tear down based off of what neighbors did.

Thanks for bringing up asbestos and lead paint. Will have to look into that...what a nightmare.

I'm in Phoenix. I'm curious what part of town it's in? Is it Arcadia? If so, I'd say it's a good investment to buy this home.

Yeah - I was reminded of the lead issue when I was ordering carpet from Lowes when they asked the age of the house. In our state (or is it a federal law?), before they enter the house to do any work, it has to be certified to be lead free if built before 1978. To do carpet? Yep.

Either way, with young children - I don't care what the law says....

I bet AZ is somewhat nicer to structures. We are in NC which is certainly tougher on structures. Plenty of old stuff around here but only because of historic charm, not because it was cheaper.

On the tear down vs reno, there is the property tax issue. Our current house is about 1$ per sq foot per year. The new one will be well over $2 (possibly $3). Tax reform made that a bigger consideration than in the past. Large reno may change that some but not cosmetic stuff.

wendi - that's a great location. Pretty much everything is accessible quickly. I lived over there (Biltmore area - Camelback/20th street) for years, and still own and rent out a place over there. If you have any questions about the area, feel free to message me.

I live in Scottsdale but drive through those areas frequently. I would pick the area east of 51 over Central Ave. It is closer to PV and that will always bring better value. And while I love some of the older homes on north Central, it is surrounded by some not as nice areas. I see all the changes on 7th Street but I also see that it has a ways to go.

Post a floor plan - it might be easier to fix than you think.

It almost sounds like it was used by someone who did a lot of work at home, or there was a seriously incompatible couple.

Random question... have you contacted the owner of the place you're renting to see if they're willing to sell?