I understand that things can feel overwhelming when it's a big unknown and there is so much info to filter through to figure out what will work for you. You certainly do want to get things right the first time, so I"m going to try to help.
Coop and Run Size:
First of all, I don't know how many chicks you have, but we'll start there. The size of your coop needs to reflect the amount of birds you have. The rule of thumb is 4 sq. ft. per bird for the interior of the coop, and 10 sq. ft. per bird for the run. If the coop and run are too small for the amount of birds that you have, they will be stressed. As a result, they will start pecking one another, their immune systems will be compromised, their ability to lay with be affected and they will live unhappy lives. In short?....bigger is always better! And even BIGGER is even
better, in case you ever want to expand the size of your flock. It's much easier to go bigger the first time rather than starting over later.
Insulation and Electricity:
Insulation is NOT necessary. Chickens do much better in the winter than they do in the heat of summer. I live in Michigan and the only time I add heat (via a heat lamp with a red bulb) is if someone is molting. This tends to happen often, but insulation is not necessary. Electricity
is necessary for the heat lamp and also to keep the water thawed in the cold winter months. I use a heated 1 gallon dog bowl in the winter months. Trust me, you don't want to spend your days constantly bringing more hot water out to the coop.
Ventilation:
Ventilation in your coop is
critical for the health of your chickens (especially in winter). People tend to think that they need to seal up their coops in winter. This could not be further from the truth! Chickens do not urinate. Most of their moisture is expelled through their breath. When a winter coop is sealed up, it creates a very moist environment at night when all the chickens are filling the air with their breath. Mornings, in conditions like this will bring a frost bite mess on the feet of the chickens and on their crowns and wattles. So ventilation is EXTREMELY important, and plenty of it!
Roosting Poles
Some people like to put branches for chickens to roost on in their coops. In climates where winter is cold, I do not recommend this. What you want to use are 2x4's with the "wide side" up. The reason is this: It gives the chickens the ability to roost with their toes spread out at night and during the cold winter months, they can snuggle their bodies down onto their feet and protect them from the cold. I recommend the same type of roosting poles in run for the same reason.
Proximity to house due to fear of smell:
I am going on my 3rd year of keeping chickens. I used to think that chickens were smelly animals. I have come to understand that chickens are subject to conditions that their owners provide for them. I have a
100% odor free chicken coop and chicken run 365 days per year. The reason for this is that I used sand as bedding inside my coop, and also in my run. I did a very comprehensive blog post about how to maintain a coop and run with sand and what type of sand to use.
Click here to see that. The amount of time and effort that I spend cleaning my coop and run is
extremely minimal! The cost of using sand as bedding is CHEAP, CHEAP, CHEAP! As a chicken owner, I can tell you that it is very fun to have them within eye shot from a window. I would opt to have them closer to the house for that very reason (along with what you had said in that it makes less of a walk with two little ones and the need to collect eggs).
Lighting:
Some people like to have light in their coop so that during the shorter days in the winter months, the chickens will keep up egg production. They will give the chickens an extra few hours of light since it does affect egg production. I personally have never added lighting to my coop. I have Buff Orpingtons and they are very good layers even during the winter months. If I had another breed, I still would probably not add the light. If they need a break during the shorter days, I would allow that for my birds but that is strictly a personal choice.
Predator Proofing:
I can not stress how important it is to ensure that you have a very predator proof coop AND run. No matter how close you have your coop to your home, predators will eventually realize that you keep chickens, and they
will try to break in. One of the easiest ways to keep them out of your run, is to form an apron around the perimeter of it. Hardware cloth is the best thing to use, but chicken wire will work also. Predators will go right up to the side of the run and begin to dig. They don't have the intelligence to back up and begin digging where the apron ends. Grass will grow up through it, and it can be mowed or weed wacked. Here is an image of what it looks like (this is not my coop. Just an image off the Internet, but is a good visual of the apron):
I hope this helps to clear up some of the unknowns that come with starting out. Please be sure to visit my "
Coop Management" post as it will put a visual to all that I have shared here. When you see my coop, keep in mind that all the materials used to build it cost us $200.00. That may help give you a financial prospective.
Building the coop is hardest and most expensive part. Once you have that out of the way, keeping the chickens will be such a joy for you and your children!