First Time Home Buyers - Down to 2 Houses

[Robert Giglio]

Hi,

My partner and I are first time home buyers and we have narrowed our serach down to 2 houses.  Hoping some experts can help us decide  My partner has a 12 y/o daughter who will be living with us:

Home #1 - List Price - $260,000

Pros:

* Ideal location

* Completely renovated

* Large kitchen

* Semi large bedrooms

* Beatiful bathrooms

* Large beautiful backyard

* 3 bedrooms with a loft which can be used as a bedroom

* Older house with a lot of charm

Cons: 

* Neighborhood is reasonaly safe but not the best neighborhood in town

* House is about 80 years old - renovated but could have some hidden issues

* Basement has 4 windows with rot.  Needs to be inspected but looks like it may have taken on water in the past

House #2 - List Price - $270,000

Pros:

* House is only 13 years old

* Nice finished basement which can be used as a rec room

* Nice back yard (smaller than house 1)

* Lots of storage space

* Located in very friendly and safe family neigborhood.  Good location.

Cons:

* House needs some minor reno work, i.e. new flooring in some rooms, paint, basement has carpet which needs cleaning ro removal. 

* Bedrooms are decent size but smaller than house 1

* Bathrooms are rather unappealing and need some TLC.

* House is very nice but does not have the "charm" of house 1

We have some $ put away but not a lot so we need to avoid situations where we would have to sink a lot of money into a house.  So the main question is, do we take a chance on house 1, the older house with charm that we love but could have a potential major problems in the basement.  Or do we go with the "safer" choice of house 2 which we like a lot (but dont love) and only needs a few grand in reno work?

Thoughts?  We are torn!