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What is a Cheap House?

By
Real Estate Agent with Realnet Tampa Bay

That may seem like a stupid question; after all, the definition of cheap house is one that costs less than what it’s worth, right? Yes, but that’s not the whole picture. The cost of a house depends on more than just its selling price.

To illustrate the point, consider a house that’s for sale for $40,000, but has a market value of $100,000. That sounds like a great deal, doesn’t it? So an investor buys the house…then they find out that the house needs work that’s going to cost $40,000, no one wants to rent the house because there’s a junkyard in the backyard, and that same junkyard is bringing down the property values of all the houses in the neighborhood.

This is why evaluating an investment before purchasing is so important.

The other factor that should be considered is your personal goals. What seems like a great deal to one investor may not be for another, because it gets them one step closer to their goals. It helps to have a business plan for property investment, because this helps outline your goals and how you plan to reach those goals.

If your goal is to generate a healthy residual monthly income as quickly as possible, then your idea of a cheap house would probably be one that you buy below market value, needs little to no repairs, and is in an attractive area with amenities nearby. Other investors may want to buy the house as cheaply as possible, do the repairs as cheaply as possible, then rent it out. Often this can be the cheapest route (moneywise) but a lot of investors don’t want to wait for the repairs, or deal with the aggravations of getting the repairs done.

On the other hand, if you’re looking for houses that will appreciate quickly, a cheap house will simply be one in a growing and/or improving neighborhood. Be sure to price all repairs prior to purchasing; even if the selling price is within a reasonable amount, the appreciation rate won’t matter if the costs of the necessary repairs are too high.

To determine exactly what type of cheap house will help you meet your needs, Contact us. One of our experienced brokers can show you our current selection of cheap houses for sale and help you determine which ones align with your goals.

Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

cheap is a great definition for the phrase you get what you pay for in this world.

Apr 25, 2012 09:53 PM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Welcome to Activerain and I hope you are learning a lot and if you ever need any assistance, don't hesitate to check out my blog, email me, call me, I will be glad to help you in any way possible. Also, check out the main page of Activerain and look for the Activerain University tab, there are lots of educational webinars to help you build your business.

Apr 26, 2012 04:00 PM