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With all the information you provided and the additional answers since then, I think I can be more specific. This is a list of what I would do, but there are many choices, and it might not be the right answer for you. I'm treating $2500 as a fixed amount, so any additional $$ you spend on one piece of equipment is something else you have to forgo.
I'm definitely interested in the direction you would head. And you are correct, I do have a bit more resource than I listed but I thought the $2500 a good place to start and stick fairly close to that amount if I could. :)
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Before listing things, Manfred beat me to the keyboard: a more expensive camera will not be any less susceptible to condensation. It may be (depending on your selection) better sealed against moisture entering the camera, e.g., during rain.
Guess I had moisture problem totally wrong and have many replies setting me straight about how it develops. I'm going to be even more careful now about how to acclimate my camera to outside work and what I do with it coming back inside. Manfred gave some dtailed info about better practices that I can follow so perhaps I can develop a better system using the Rebel since it is my "practice and learning" camera.
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1. You say you are keeping the Rebel. For me, that would end the discussion about brand. It makes no sense to own two cameras that can't share lenses and a flash.
2. Given what you wrote, I would stick with a crop sensor. You won't get enough advantages from FF to outweigh the disadvantages. (When I wrote about printing, I really meant "large". I print a good bit at 13 x 19, and I doubt you would be able to tell which are crop-camera photos.)
I'd start by comparing the features of the xxD series (70D, 77D) to the 7D II. They differ in build and controls, as well as price. I won't try to get into that.
It does seem to be a better choice to stick with Canon so long as Canon continues to be compatible with their gear.
The ability to print probably would not be a huge issue for me. Since getting the Rebel, I've made it my habit to use RAW format for pics. I figured that the more data I had to work with the better off I would be.
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With respect to Dave's question about lenses: all Canon EF-S and EF lenses work on Canon crop-sensor cameras, without exception. The limitation is solely that EF-S lenses won't work on FF. I should only crop for years, and one of my favorite lenses then (and now, for that matter) is the 70-200 f/4 IS, which is an EF (full frame) lens.
I'm glad to know this. It means I can get new and still fall back to the lenses that I currently have.
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3. You mentioned that one of your interests is shots of your grandkids. Mine as well. For that, I consider a bounce-capable flash to be essential. I have used Canon 430 EXII flashes for years, but there are some good off brands as well. Ideally, spend $30 or so and add a bounce card, like a Demb flip-it. This is a discussion for another thread, but I would take the cost of a flash right off the top in deciding how much you can spend on other things.
4. Given your budget, I would buy refurbished gear. Canon won't refurbish gear unless they can bring it to near-new condition, and they guarantee all of it. I would have to check, but I believe they have extended the warranty from 90 days to 1 year, at least on some equipment. I am including lenses as well as bodies. My most used lens is an EF 24-105 f/4 that I bought as a refurb 3 or 4 years ago. It's been flawless. I would avoid used gear unless you know who is selling it or you get a warranty, as you would from some vendors (e.g., Adorama and I think B&H and KEH, the largest vendor of used gear). I generally opt for refurbs when I don't buy new, sometimes waiting for a Canon sale.
Looking through my digital pics, I do tend to have grand-kids as a large part of my efforts. We haven't traveled much and
landscapes here are ho hum. Grand-kids provide amusement trying to get decent pics of them! :D Lighting has always been an issue while trying to get photos inside of our home. There is either too much light blazing through the windows or not enough because of the lateness of the day. Adding a good light system should probably become a priority but I can't stage the situations. All kids' photos are spontaneous. :)
The P52 was an exercise to learn how to use the camera better so for that project, I chose to take various different sorts of shots that I may not normally do. You will note that I've only included a few pics of kids because I am old fashioned and don't trust the web much.
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5. You need to think about lenses, which is a big reason not to buy a new body--to save money for other stuff. Your post suggests three ways to go, but you will probably need to pick one: a macro lens, a faster lens for indoor candids of kids, and a longer and better telephoto. The last is the most expensive. Re the second: If you are going to do candids with flash, a fixed aperture lens is really preferable, and you need something that stays no slower than f/4. I rarely use wider apertures for that purpose because at f/2.8, it's very hard to keep a moving grandkid properly in focus.
With the encouragement to check out refurbished, I'll take a look and see what I'd be comfortable to do. I appreciate the info about what lenses may fit my needs. Currently, I try flipping from 55-250mm to 18-55mm based on distance/conditions from the kids and their activities. It is always a guess as to what situations will develop when I am around them! :)
Thank you for a detailed reply. I appreciate your thoughts very much. :)