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Looking to buying a small piece of the American Dream? On a budget?
You are in luck! Buying houses on a budget is something I have learned to do well. As a military wife, moving, buying a new house and setting up a home is something I have become good at over the years. I am taking a break from packing boxes to write this article. We recently celebrated our fifth anniversary at which point we had lived in 4 different cities in 3 different states; Texas, Virginia and California.Since we weremarried young, right after I graduated, budgeting and pinching pennies was something we learned quickly as we both got established in our careers. In the beginning we rented. The biggest thing we found was if done right one’s mortgage was so much cheaper. After that we bought both personal properties and rentals.
1). Buy a Fixer Upper
2 of our 7 houses have been foreclosure fixer uppers. In our first home, the former occupants had painted the house in rainbow colors throughout the entire home including one of the cabinets. The amazing thing was it was all cosmetic! With a lot of “sweat equity” it was cheap at 12k in repairs versus the 50k in comparable asking price savings! This allowed us to get into our “ideal” neighborhood at budget prices.
2).Distressed Property (Foreclosure/Short Sale)
I love these properties. While the paperwork is tedious, and short sales aren’t short; they can be amazing deals. I honestly love shortsales more than foreclosures. In the past short sales have been a great deal, in better condition AND almost the same price as foreclosures. The “sweat” equity was in the waiting. While they both are disappearing rapidly as the recession becomes a distant memory; if you find one of the remaining “great” deals then snap it up.
3).Gentrifying Area
Buying in an up and coming area that is gentrifying is a great way to get to buy “low”. While we have not done this yet, as our orders have been in small town America, we have friends who have done very well in San Diego and DC.
4).Second Best School
We have done very well buying in the “second” best elementary school district. Ithas been significantly cheaper and still will be an awesome school for kids, resale and rental purposes.
5).Renting out Your Previous House
Rentals are not for everyone. We keep our previous homes as rentals and those have helped us fund the “upgrade” homes. Think of it this way: if your new mortgage on a house$1000 and you are able to rent itfor $1600 then that is $600 in cash flow that you now have, plus the principle pay down of $200.Say your next house is $1800 for the mortgage. After your emergency fund you are only are really coming out of pocket for $200 plus someone else is paying off your loan! This allows you to capitalize on appreciation and get tax protection.
While owning homes is not for everyone It is totally possible to get that perfect home for your family without breaking the bank!MORE POSTS YOU MIGHT LIKE:
Elizabeth Colegrove is a lover of real estate who specializes in turning her once negative transient lifestyle (military) into a positive lifestyle/investment opportunity. She self manages her entire real estate portfolio from long distance while holding down a full time job. When she isn’t finding new real estate deals, she enjoys traveling, hanging out with her awesome boat-building husband, playing with her mischievous kitty, or writing on her newest project;her blog(reluctantlandlord.net)
Categorized as: Saving Money, YourModernFamily
Hi there!
I’m Becky, a former elementary school teacher turned certified child development therapist and blogger. I work at home with my husband and together we are raising (and partially homeschooling) our four children in the Carolinas. I love diet co*ke, ice cream, and spending time with my family.
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4 Comments
I agree that it is a good idea to buy a fixer upper. However, I would recommend being cautious as well. Before buying the home ask yourself if you know enough about construction to fix the house. Do you also have enough time? If your answer is no to either of these questions, I recommend giving the idea a second thought.
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This is awesome information about buying a home! My wife and I have a few things we really need out of a home, but our budget isn’t huge. I like that you mentioned that you could potentially look into buying in the second best school district, rather than focusing on the best one. That could make homes much cheaper. We will have to look into that.
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I am so proud of my husband for completing dental school and am ready to move onto the next step in life which is to buy a house. It is good to know that one should buy a fixer upper. I did not realize that repairs were so much cheaper than asking prices. I am glad to know that this allowed for you to get into your ideal neighborhood at budget prices. I hope we are able to find a similar situation.
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Thank you for suggesting you may want to buy a fixer-upper if you are looking to save a little money. My fiance and I want to find the perfect home for us to move into after our wedding. I’ll have to look into the local real estate and hopefully, we can find something we love.
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