New Primary Residence: New Build Appreciation Play vs Value Add

[Chris Allen]

Hey BP! Would love some thoughts on how, as an investor, you may justify or think about buying a new primary residence.

I currently live in Killeen, TX where I HH my 2:1.5 duplex. My wife and I have a baby on the way and are looking to purchase a new primary in the Temple or Belton area (about 50 min N of Austin, 30 min S of Waco). I am currently struggling to decide on which approach I should go after. I have lived nearly "rent free" the last two years in my duplex, so the prospect of taking on a large mortgage payment without a tenant is difficult to me (not worried about being able to afford the payment, just thinking of being money smart). Would like to hear yall's opinion on New Build's (NB's) in todays market vs buying something "used" and trying to add value. (For context, I do not see a huge difference in on-market properties. 10+ yrs old 3:2 going for 140-150/sqft, NB 3:2's going for 155-160/sqft and NB 4:2+ going for 160-170's/sqft.) (Also, anything at a higher price point, we are considering properties with ADU's or a guest bedroom with in-suite bath in case we wanted to AirBNB out a room or something).

Would you 

- Buy the best property ($350-$415k NB) in the best area with the best amenities that you can afford now, expect to stay for 3+ yrs, assume same house would be more expensive in 1-2yrs, and hope for decent appreciation in this area and sell when move out. (Unless able to rent as an STR or rent-by-the-room, almost nothing >$280k will cashflow well without 20%+ down payment).

- Buy something lightly used (5-10+yrs old at $280-$330k) that we are still comfortable in, could use cosmetic updates, decent area, and would still need to hope for appreciation as renting as a LTR still would be a stretch. 

- Buy something heavily used (10-20+yrs old at $180-$250k) in an ok area, will need moderate-heavy rehab, might work better as a LTR, but would likely want to move in 1-2yr and buy something nicer.