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When the monthly rent for Cristiana Peña’s Brooklyn apartment went up $200 this year, she and her partner decided to get serious about finding a place to buy.
But that wasn’t as simple as picking a house, any house. Peña, who has worked in historical preservation, wanted something distinctive. So they found a property in upstate New York – an old church waiting to be turned into a home.
“We could’ve bought a house years ago, months ago, we could’ve closed on something, even just your conventional old house a long time ago, but we were really looking for something different and unique,” she says.
It makes sense that Peña would want an inexpensive home – she works for “Cheap Old Houses”, which collects and shares listings of bargain-priced homes around the country through Instagram, newsletters, and an HGTV show.
By making that home decision, Peña is also finding a way to obtain a home at a reasonable price in what seems like an ever more unreasonable housing market. Home prices are up about 20% from where they were just a year ago, and they show few signs of coming down soon. That leaves potential buyers, who don’t want to be half a million dollars or so in debt, with a shrinking number of options. It just takes a little creativity, and maybe some elbow grease.
“No matter the economy, no matter the zeitgeist of the country, it’s always a good idea to buy beneath your means,” says Elizabeth Finkelstein, who founded “Cheap Old Houses” alongside her husband Ethan.
Here are some things experts want you to think about before you consider dropping less than expected on a house.
Why Consider a Cheap Old House?
A cheap old house can significantly cut your housing costs. Peña said their rent is currently about $2,300 a month. The monthly mortgage payment on the church, with a sale price of $100,000, will be closer to $300 or $350. “That difference is the money that we’re going to then have as our renovation budget,” Peña says.
Most homes on the market won’t come with payments that low. Home prices are up 20% or so year-over-year. The average 30-year fixed mortgage rate, meanwhile, has risen two percentage points since the start of the year. There are a lot of strategies for homebuyers to consider when facing …….