patrick.net

That is a hard question to really answer unless some sort of location is given. That amount is pretty high..if you are in the bay area that might be ok but if you are in other parts that can be sky high.

I wouldn't want to buy a house right now with the plan of selling in the short term (5 years is short term for a house). Both prices represent a significant amount of money, so I would be sure to understand the local market, particularly what equivalent rent would be, etc. At the end of the day if I were convinced that I wanted to buy a house, I would lean toward something I could stay in for a long time, so probably the 3 bedroom in your case. I will say, however, that 2 children can share a room for many years, especially if they end up being the same gender.

-s

If you see yourself in the home longer then 10 yrs I would go with the 3 bedroom, but if less I would go with 2. You don’t want to be upside down in 5 years. If you can’t sell the home for what you owe on it you will be in trouble. Since econ is almost constant over long term I would look at the 3 bedroom if long then 8yrs. Good luck!

Agree with Eman. But beware of hoa. Beware of how many units in building in foreclosure. Do your research. And then do it again.

None of the houses you mention are "cheap". Since when is 1/2 million bucks+ cheap?
No house is going to be a good "investment", they are houses. An investment property would be one you buy with the intention of 1. renting 2. selling at a profit.
So, you are buying a house, not an "investment property." Fine and dandy.
You should buy the smaller house.
Borrowing MORE money today for something you MAY need later is not good policy in my opinion.
Who will encourage you to take on larger debt and buy the larger house? Probably your wife and others who will have no problem putting YOU into deeper debt to satisfy them.
Incidentally, house prices are falling probably almost everywhere. There will be millions more foreclosures, the process of foreclosure has no end in sight.

Remember having housing debt is a life time of burden. Questions to ask when deciding on a property (home or rental) both are investments are:
1. Can i easily rent it for a ROI? Even a small profit will do.
2. Will it be easy to rent? Who could be your potential renter.
3. Is it easy to maintain? Maintenance can bring you down. New roof, plumbing, paint, street plumbing (you would be surprised at what portion of main line to the street is your resposibility.
4. Older condo structures have higher hoa.

All I can say is wow to those prices, just think of the interest the banksters will get until you finally decide to foreclose, unless your moneybags, then go for it.
I was considering buying in the city, but I'm figuring many other U.S. cities will one day resemble the Detroit model.

Within the boundary of a good location, I will only say that the third bedroom and second bathroom is extremely valuable and well worth the premium noted above. It's a siginificant jump from an apartment.

Everything is about incremental value and how much it costs to attain that value, you have to judge for yourself whether the extra cost is worth the value added.

I would only consider the two bedroom if it has expansion potential to get it into a 3/2. You do not want to be stuck with a 500K+ home that you do not want to live in subsequently for whatever reason. In five years, the market and price may not be where it needs to be and you generally don't want to rent 500K homes.

I'm surprised at the responses so far- I was pretty sure most people on this site would scoff at the idea that prices will rise within 5 years. I think if you're gonna buy, you need to either stay put over the long haul (more than 4-5 years) or be cash flow positive so you can rent your house and buy a second one.

leo9 says

from 4-5 years from now but I am assuming by then the house prices will go up

This was assumed back in 2006. LOL. Nada. Think 10 years plus. If you plan on getting out in 5 years try renting instead of buying.

$570,000 for a 2 bedroom house? Where the heck are you buying? This must be one hell of an expensive area. To me, anything with less than 3 bedrooms is not even a real house. I'm surprised nobody has torn down all those 2 bedroom houses and repalced them with McMansions by now.

lol, but it's the low interst rate that supposedly makes it such a deal.