Location can never be changed, appreciation of your home is based upon the location. You also have to see if the location works for you, and if the house works for you. Can you live in a small house for as long as it takes you to build on it? Ultimately the decision is yours.
As many of us have answered below, location matters.
You will want to compare the market value of each home and determine which is the better deal. Put a number it, in terms of what the value is and what you will be saving or losing for each home. You will want a good Realtor for this or hire an appraiser.
For resale value, the small home in a good location will usually be better. This is because you can not normally change the external elements outside of your property. But if you pay too much for the home in either case, it will not be a good deal.
I've seen people buy homes in both cases and it will always depend on how you buy. You must buy at the correct price and that is either market value or below market value.
Keep looking, because you will be able to find the house that is large enough and in a good enough market area or location to meet your needs. There are more than two houses in any market and if you lose one, you'll soon find another.
The oracle has spoken: "Buy a house you can qualify in an area you want to live in."
As I read all of the response, I am reminded of the old adage "The more things change, the more they remail the same". I agree 100% the location in King (and Queen) in real estate. Of course, you could always call me to discuss how purchasing with an 203K renovation loan could possibly give you the bigger house and amenities you may desire in the exact location.
Personally, I would decide where I wanted to live and focus in that area. Then I would look for the property that can be modeled into the house of my dreams. I can move almost any wall or change any paint color...I cannot change the school district my children will attend if I buy in a less desirable location. Best to you!!
A very good question, thanks for asking it.
Lashika, if you need the space and cannot live without it go with the Big House.
If you do not need the space right away, and down the road have the "likely means"
to add on to the house and patience for it, then go with the smaller home.
You are buying at the near bottom, hence whether you buy a big home in a so so
location or a small house in a good location, it may likely all average out.
It would be nice to know what Areas or Towns you are considering.
Hope you had a good weekend.
Location and schools determine whether or not the property will retain value and continue to appreciate.
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The golden rule of thumb always holds true for investing real estate: Location! Location! Location! Physical condition of the house will surely wears and tears and depreciate over time, but it's the appreciation of the land value that rewards you the investment in future. "Desire of location" drives the market value for your property.
You have received some good answers from my fellow Realtors. In my opinion you should buy a home in a good location. There are many reasons for this recommendation but whats also important is your wants and needs when purchasing a property. I think the next step for you is to find a Realtor you want to work with and they will be able to listen to what it is you are trying to accomplish and give you some sound information so you can make an informed decision. Buying a home is a big decision and you should feel very comfortable that you have all the information necessary to make that big decision.
Realty World/Blue Property Group