Owning a home is a common aspiration for many, but rising home prices and high mortgage rates can make it seem unattainable. However, stumbling upon a super cheap house can be exciting, even if it requires extensive repairs. Websites like Cheap Old Houses offer homes for as low as $13,000, and certain programs in cities like Newark, New Jersey and the U.S. Department of Housing and Urban Development (HUD) offer $1 homes. Despite the allure, buying a super cheap house may not be the best idea.
One major caveat of these programs is that they come with strings attached. Buyers are often required to renovate and repair the property, and financing must be proven. Residency restrictions may also apply, limiting eligibility to locals, and buyers may be subject to non-guaranteed pricing.
Even if a super cheap house is purchased outside of these programs, financing can be a challenge. Most lenders are reluctant to issue home loans for less than $150,000, making it difficult to secure funding for a house under $100,000.
Additionally, there are fixed costs associated with a super cheap house purchase. Property taxes, which are based on assessed value, can be significant. Homeowner’s insurance costs may also be higher, especially if the property is in a flood zone. Materials costs for repairs and unforeseen expenses can accumulate quickly.
Other concerns include the quality of life in a super cheap house, as it may lack necessary amenities and be in a less desirable neighborhood. Resale value may also be a challenge, making it difficult to recover the investments made in renovations.
Buying a super cheap house can be enticing, but it is important to carefully consider all factors and potential drawbacks involved. Extensive research and financial planning are crucial in making an informed decision.
Cheap Old Houses, Newark, New Jersey’s Homeownership Revitalization Program, U.S. Department of Housing and Urban Development