Some of the Cheapest Houses

By Steve Gillman

This used to be the "under $30,000" page. Now it has towns with homes under $50,000, and it is getting smaller over time. To be included here a town has to have at least a handful of houses for sale for less than $50,000. The homes need to have at least two bedrooms and be ready to live in with no more than cosmetic work. The town has to have basic amenities too, like more than one grocery store and a police and fire department. Here some of the towns and cities that meet these criteria.

Cherokee Village, AR

Fixer uppers start below $30,000 here. Houses that are a bit more ready-to-live-in start just below $50,000 or so.

Myrtle Beach, SC

There are thousands of listings on the market here, so expect prices to be slow to rise. At the moment you can find dozens of nice places to live for under $50,000, but they are all condos and mobile homes on land.

Birmingham, AL

At a population of 230,000, Birmingham is the largest city in Alabama. At the moment it has more than 800 homes listed below $100,000. The first 100 listings, when sorted by lowest price, are all under $17,000. Yes you read that correctly. They start around $5,000. Of course these are fixer uppers, but cash flow is a virtual certainty if you can buy these and rent them out. By the time you wade through three hundred cheaper listings and get to $50,000 or so there are some really nice homes.

Tucson, AZ

With a population of more than 500,000, Tucson has all the amenities of most large cities, but without the traffic problems many face (we lived here for two years and really liked it). If you want to keep it under $50,000 you have to look at mobile homes on land and condos. The latter start at about $40,000.

Little Rock, AR

Little Rock is the capital and the largest city of Arkansas, and has about 190,000 residents. Two-to-four bedroom fixer uppers start at under $20,000 at the moment, and there are more than four hundred houses under $50,000. They start to look pretty nice at about $40,000.

Bay City, MI

At the bottom of Saginaw Bay, this city of 34,000 is where I was born. I left in the early 70s, but it appears that home prices are just the same now. There are some decent houses under $50,000, and some really nice ones can be had for a little more than that.

Albany, GA

In the southwestern part of the state, Albany has around 75,000 residents. There dozens of homes listed for under $50,000 as of 2014.

Bradenton, FL

Bradenton is on the gulf, an hour or so south of Tampa. Although there are houses priced under $50,000 at the moment, they appear to need work. The best deals at the moment are probably the condos; nice ones start at about $40,000 to $45,000.

Tallahassee, FL

The capital of the state, Tallahassee has about 172,000 residents, and is less subject to hurricane damage than many of the other cities in Florida. There are huge tract of national forest and other public lands nearby. There are about 100 homes listed for sales for less than $50,000 at the moment, and not all of them are fixer uppers. Mobile homes on land are the cheapest options.

Fort Lauderdale, FL

With 163,000 in the city and more surrounding it, Fort Lauderdale has all the basic amenities, including a good airport. It also has quite a few of the cheap homes for sale in Florida. I just found hundreds of condos listed for under $100,000, including some priced at less than $30,000. No typo there - property values have really fallen (although they have been rising for a while now). This may be a once-in-a-lifetime opportunity.

Erie, PA

Population 103,000. This city is (as you might have guessed) on Lake Erie, and has a cute downtown. You can still buy a house here for less than $50,000.

Detroit, Michigan

Yes, it is dying - it has been for generations. There are hundreds of homes for sale for $30,000 or less here - they start at a few hundred dollars!

We searched on Google maps and looked at the neighborhoods. Some of these look okay, with lawns that are cared for and streets in good repair. People have been leaving and there are apparently empty houses everywhere, but the story is more dramatic in some cases. We looked at a home that sold for $90,000 in 2006, and is listed for sale for $4,500 now. We looked at others that seem to have fallen 80% or more in value in four years.

Part of the reason - in my opinion - is that the city is chasing people away with high taxes. The owner of that $4,500 home paid over $2,000 in property taxes last year. Where we live here in Colorado, you would have to have a property worth $400,000 to pay that much. Add to that the lack of jobs and perhaps the worst crime rate in the country, and there is little hope of prices going up anytime soon.

Price for a decent home in a decent neighborhood: Not clear.

How to Buy Cheap Houses

It is nice to buy a cheap home to live in, and that's a real possibility as you can see. But on the other hand you might not want to live in some of these cities and towns (I won't say which to avoid nasty emails from local politicians). So what do you do with information like this?

To start with there are few towns on the above list that aren't so bad. If you have the ability to move and take your income with you, you might buy a home for $10,000 somewhere. Many of these cheaper listings are fixer uppers, of course, but another $10,000 might be all it takes to make it home.

Investing in the cheapest houses as rentals is another option. This can be difficult when the prices are down primarily because of population loss. On the other hand, if you put just $20,000 into a rental and get just $400 in monthly rent, you might have cash flow even if it is empty half the time (especially if they don't try to choke you on taxes as they do in Detroit).

Investing for resale is perhaps the best option, but not if you do it the usual ways. Fixing and flipping houses in areas where there are hundreds of other homes selling cheap is not the best plan. Instead, buy the cheapest livable place you can get, and sell it for twice as much by offering easy payments. Let's consider one example...

Suppose you buy a house in Detroit for $3,000 and after closing costs and cleaning it up a bit you have $5,000 into it. Now, if there are families in the area renting similar homes for $400 per month, is it possible they would like to buy a house for $14,000 with just $300 down payment and monthly payments of $250? I think so - and this is what some investors have been doing. Defaults are common, but selling it all over again might not be that difficult. And you have none of the headaches of a landlord.

Of course, this website is not about the absolute cheapest homes in the USA. If it were, I would tell you more about Detroit, Michigan. But you almost certainly don’t want to live where the cheapest houses in that sad city are found. Apart from the apocalyptic setting, they give "fixer upper" a whole new meaning.

And buying a cheap house is only half the story of affordable housing. A low price alone doesn't mean you can afford a home. Your mortgage loan is also important. What interest rate will they charge, and what will the payments be? Be sure to educate yourself in this area.

When you're ready to do your own research into affordable towns and the home prices there, see the page on how to find inexpensive houses. You'll find some links and good resources to get you started. Good luck and go buy a cheap house.

For information on other affordable towns see the page Cheap Houses | Nice Towns, which has some examples of towns with homes under $75,000. And then there are the places where you'll have to pay from $75,000 to $125,000 for a decent house: More Affordable Places to Live.

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