With the dream of homeownership becoming ever more difficult, there’s a certain allure to scoring an ultra cheap house. What does that mean? Think fixer-uppers well under the $100,000 mark. Realtor.com recently featured a veteran home flipper to give the low-down on why a super cheap home really isn’t that cheap.
When homes are listed way below market value, it usually means one of two things. Either the house is in an undesirable location. Or, the house is uninhabitable. Sometimes, however, investors catch wind of a potential flip and swoop in, creating competition, and potentially driving up the price. A higher price tag on a fixer upper may not be a risk for an investor with a lot of capital. It is, however, certainly a risk for the everyday homebuyer.
Things to think about before taking the plunge on a fixer upper:
- Are you flipping and hoping for a profit?
- Is the home in an up-and-coming neighborhood?
- What costs are hidden?
That last one may be the most important. Obviously, the entire nature of a fixer upper means it needs a lot of work. There are certain projects that cost more than others. Definitely weigh the costs of your initial investment with things like securing the foundation and roof and updating electrical and plumbing. If all the numbers check out and you can see recouping your costs in the future, perhaps an ultra cheap house is for you!