Should I buy a house, flip a house, or build a house?

The time has come for me to start looking for my own place, but I’m in a dilemma. I can’t decide if I want to buy a nice house that is move-in ready, buy a fixer-upper to work on as a project, or buy a plot of land and fulfill a long-term goal of mine by building my own eco-friendly tiny home. I’m trying to decide which option will be the most cost effective, fun, and fulfilling. Fortunately, I have plenty of time to decide, and I’m not going to rush this important decision. There are many factors to consider before I make an investment in my future home.

If I’m going to invest in a piece of property, I have to be willing to live there for a period of time. However, I also want to be able to profit from the property by either renting it out in the future or using it as an Airbnb. For these reasons, the location, condition, and marketability of the property is extremely important to me. Because the future is so unpredictable, I’m not banking on being able to rent out my home. Therefore, if I’m going to spend the money on a home, I have to be comfortable living there as well. Any property that I’m going to live at has to meet the following criteria:

• The property must have a nice backyard in which I can have a garden. If there is no yard, or the yard is completely shaded, this does not appeal to me.
• I have to be able to comfortably park my short bus. I spent a lot of time and money on that project, and I’m not selling it, so it’s coming with me. If there’s no big back yard to park it or a long enough driveway, then it’s simply not an option. 
• The property must be close to where I work, and since I work downtown, this means there are several plots of land and various houses for sale in somewhat sketchy neighborhoods. Believe it or not, the crime rate in the neighborhood is not a major deterrent to me. The way I see it, crime is everywhere and all you can do is protect yourself and be careful and try to improve the community by being a good neighbor.

Aside from having a nice yard that can be fenced in, the ability to park my short bus, and being close to my work, I’m not terribly picky about the home, which is why I’m torn on my three options.

Option 1: Buy a Quality Home

My first option is the least appealing to me for a number of reasons. I’m well aware that a move-in ready home that doesn’t require a lot of repairs is probably going to be cost effective in the long run. However, if I’m going to live in a home, I intend on making it my own, which means I’m going to be painting, remodeling, and having as much of the floors hardwood as possible. If I’m already investing all of that money, I figured why not just buy a fixer-upper and start from scratch? I’m also discouraged by the higher price. A house that is well-maintained and on the market is going to cost quite a bit more. That being said, a move-in ready house is going to require a lot less work and give me more time to focus on my other goals and hobbies, too. Fortunately, property is incredibly cheap in my hometown, so even if I went with this option, I wouldn’t be out a ton of money. 

Option 2: Buy a Fixer-Upper

Buying a fixer-upper appeals to me despite all the naysayers. People keep saying to me that it’s going to cost a lot of money and I’m like, “Duh. Do you think I don’t know that?” And for many people, doing a lot of home repairs is not appealing in the slightest, but for me, I love the idea of stripping a house down, sanding and staining the floors, painting the walls, updating the electrical and the plumbing, and making the house my own. Incidentally, the types of houses I really like (the older ones with unique and interesting architecture) are often fixer-uppers. If the house isn’t at least 100 years old, it really doesn’t interest me that much. I can’t stand new houses with their boring cookie cutter, character-less designs. I love the old houses with all the windows, the nice porches, the original hardwood floors, and the interesting architecture.

The problem with fixer-uppers is that I run the risk of investing far more money than the property is worth. This is one of the reasons why any property I choose to buy has to be one that I’m willing to live in for a period of time. That being said, it would be a poor investment for me to spend a lot fixing up a money-pit that just isn’t worth all the time and effort. If I did invest in a fixer-upper, there are certain red flags I’ve been told to look for, such as a sinking foundation, extensive pest damage, former meth houses, and locations that flood easily. For many people in the fixer-upper business, the foundation is the first thing they mention. Some have more deal breakers than others, and since I’ll be relying heavily on contractors to do the work, it’ll depend largely on how much money I’m willing to invest. A part of me keeps saying, “Don’t do it. It won’t be worth the trouble. Just buy a nice home.” But I just can’t get over the idea of buying a super cheap house that I could pay off in a short amount of time and invest in. Am I crazy? Do I need a friend who has gone through this process to talk me out of it? I’m always open to the advice of others, but ultimately I will do exactly what I want to do.

Option 3: Build a Tiny Home

My last option will require the most planning and by far the most work. It’s been a lifelong goal of mine to build my very own tiny home built specifically to my lifestyle that incorporates as many eco-friendly features as possible. I don’t require a lot of space to be happy, but I do need a good location. Most people who build a tiny home do so as a mobile feature that can be relocated or fit on a trailer. However, in order for me to legally live in this home, it has to be on a permanent foundation. There are several small plots of land for less than 10 grand that are very close to my work which further fuels my desire to pursue this dream of mine. That being said, building an entire home from scratch can get costly real quick if I don’t put in the time to properly plan it. I would also have to meet with my city’s zoning and planning committee to see what I can legally do. For instance, I’m not sure if I can collect rainwater legally or rely on solar power instead of city utilities. This option will also take the longest for me to be able to move in, and I’m eager to make that happen. What I find most appealing about this option is the ability to specify every part of the process. I can make it as unique and interesting as I want. I can also spend as much or as little money as I want. I’m a frugal person, and I don’t like extravagance, but I can see how a project like this could run up a bill. Even if I go with one of my first two options, building a tiny home is still a dream of mine that I intend to accomplish someday. 

So those are my 3 options. What would you do if you were me and why? I’m eager to hear your thoughts and ideas, and I can’t wait until I make one of these options a reality!