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Really Cheap Housing

By - 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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