Really Cheap Housing
By Steve Gillman - 2008
There are several basic ways to find really cheap housing,
whether you are buying or renting. This article will concentrate
mostly on ways to save when buying a house, but much of it will
apply to renting as well. Here are five ways to find a home for
less.
To begin with, if you have the option to live where you like,
you can find a city or town where houses or apartments are cheaper.
This can cut housing costs by as much as half. An apartment which
rents for $500 in Tucson, Arizona would be $1,500 in New York.
A home which costs $500,000 in California might be $150,000 in
many cities around the country.
Next, you can locate the areas or neighborhoods where prices
or rents are cheapest. Unless it is clearly an unsafe or otherwise
undesirable part of town, start your search here and only move
on if you cannot find what you need after carefully looking at
what is available.
Certain types of housing are cheaper than others as well,
so start with these. Mobile homes (on property) are usually the
cheapest options, but beyond that, the relative value of various
types of houses can vary in different parts of the country. In
some places classic old houses are valued more than new homes,
while in other cities they are seen for the trouble they are
and valued less. Start with whatever type is cheapest in your
area, and work your way up if you don't find what you need.
Sometimes there are just plain good deals that can found if
you look. Pricing of homes (or setting of rents) is not an exact
science, nor do some sellers even use what scientific tools are
available for this, so look for great deal. If you are handy
and want to deal with a fixer upper, this may mean paying $20,000
less to buy a home that needs a few thousand in repairs.
Finally, you can offer less. You can learn good negotiating
tactics if you are going to be talking to the sellers directly.
Alternately, you can make a lot of low offers and see if one
of them is accepted. Of course, if your first ten are rejected
without even a counter-offer, you may want to adjust your bids.
Comparing Cheap Housing
When looking at the cost of housing, don't make the mistake
of thinking it is all about the price or the monthly rent. It
is true that if you buy a house for $10,000 less, you might pay
$60 to $90 less per month on that mortgage. On the other hand,
if it means driving 10 miles more to and from work, and your
car costs 30-cents-per-mile to operate, that's an extra $120
per month in auto expenses. What should you look at when comparing
options?
- Monthly loan costs. Higher interest rates on a small home
could make the payments more than those on a lower-interest owner-financed
home. Look at the interest costs per month.
- Insurance costs. Some really cheap houses costs more to
insure, especially if they have old heating systems or are in
flood zones.
- Property taxes. A difference of a block or two can be dramatic
if you cross township or city lines.
- Commuting costs. Remember that not only your job, but also
stores may be further away if you are out of town.
- Utilities. A heating bill can be twice as high on a drafty
old house versus a new energy-efficient one of the same size
and price. Look at electricity, water, sewer and garbage collection
expenses as well.
- Anticipated repairs. Cheaper housing could mean those homes
that are truly ready to live in without any work. Estimate the
next three-year's repairs and divide by 36 to get a monthly figure.
- Any other costs you find. Are there association dues? Are
there special assessments? What about snow removal costs or lawn
care expenses?
Take notes on anything that might be an expense, so you can
compare fairly. Add up all costs, estimating as closely as you
can if no records are available, and find a monthly average.
Now you can see which options are truly cheap housing.
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