I originally published this nearly a year ago, and it continues to be both popular and relevant today. David Leiter and Dan Sem did some excellent research for this article, so I've updated and republished it - hopefully this will help more people to find low cost home ownership. Jason Horton, Editor.
You may have seen it in the news. Home buying numbers in the United States continuing to rise after a shaky recession that turned many potential homeowners into renters. The last U.S. Census data showed home buying is up 17.0% in September 2014 from what it was a year earlier, with over 467,000 new single family residential sales in September of 2014 alone! (U.S. Census Bureau)
Perhaps you might be thinking it's your turn to jump in and go from renting to owning your own home. Even though owning a home has many obvious benefits, it is the biggest purchase you will make in your life, and for that reason home ownership may be out of reach for many people. The average sales price for a home, according to data for the fall season of 2013, was $318,900. That's still a pretty steep price for most people in this economy. Now, before you start searching the classifieds to find another studio apartment to rent, there is hope. If you get creative, and aren't afraid of hard work, there are a number of ways you can own a home for under $50,000. Here is a list of five ways you can try to make this happen.
#1. Foreclosed HUD Homes.
This is a good option for a single-family home. Foreclosed HUD homes are posted online and are sold to the highest bidder, who is then required to submit a deposit and proof of funds, and agree to a contract. The new owner is tasked with inspecting and repairing the home. All in all, purchasing a foreclosed HUD home can be quite affordable in some cases (eHow #1).
#2. Fixer Uppers.
Basically, a fixer upper is a house that is quite cheap but will require some time and money to repair. This option is best for those who have the experience and know-how that will be necessary to do a fixer upper on a dilapidated home. It should also be noted that a fixer upper will require lots of time, so you will have to be willing to put lots of work into it. You can get a home for half off the appraised price, or even less, if you are willing to put in the "sweat equity" to make the home livable.
Fixer uppers are not for everyone, so this option is something that you should give plenty of time and thought before pursuing; in some cases, a fixer upper can turn out to be a waste of time and money. When considering a fixer upper, try to find the worst house in the best neighborhood; it may stick out as the trashiest house in the neighborhood right now, but once it’s remodeled it will be right at home. You should also pay special attention to the construction quality of a fixer upper, as well as the potential expenses that will be involved in renovating it; don’t consider buying a house with major problems such as a crumbling foundation, termite-eaten beams, or major water damage.
#3. Site Builds.
The nice thing about doing a site build yourself is that you have a lot of flexibility in terms of what you get. Homes are generally built according to standardized building practices, but the budget and location are yours to decide. If you pull the permits yourself and act as the general contractor, which most cities allow for, you can also build-as-you-go and finish out phases of the site build as you have the money for it. It might take months or even years, but in the end it is exactly the home you wanted, and often can be close to debt-free.
#4. Manufactured Homes.
A manufactured home can be a great option for someone seeking affordable housing. These homes are pre-fabricated in factories across the country, and then shipped direct to your lot in either one or two pieces (sometimes three if it is really big!) and then placed there within a matter of hours. Manufactured homes are available in varying sizes and designs, and some of them may have up to 2,400 square feet of space or more. The prices are also significantly less than traditional site-built homes, with some factory-built manufactured homes running as low as $26,900 for a large enough model that has three bedrooms and two bathrooms plus a kitchen and living room.
#5. International Homes.
This is an unconventional approach, but it deserves some consideration. Buying a home in Mexico, for example, can be much cheaper than in the United States; your costs for utilities, food, water, and maintenance are all dramatically lower in Mexico than they are in the U.S., and property taxes are also very low (eHow #2). It may not be the first thing that comes to mind when you consider buying a home, but it’s one option that certainly deserves some thought if you are willing to relocate.
So what do you think? Do you have other ideas of how someone can find a home for under $50,000 in today's economy? It certainly has been done before, but it does take some thought and effort to escape the mortgage trap and own your home before retirement. Let us know if you have any ideas we may have missed!
You might also like to read:
• Smart Ideas to Make the Most of Your Small Apartment
• Remodeling - Does it Make Financial Sense, And Does it Need To?