Sub $50,000 Homes – Diamonds in the Rough, or Fool’s Gold?
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- Lead paint
- Deteriorated Structure
- Rough neighborhood
- The list goes on and on…
Any one of the above could easily cost you more than the house is worth. But, if you were able to get past the potential problems, would you be willing to purchase a house below the $50k threshold?
After reading this article, I was curious as to what I might be able to find in my area (namely, Kingston and Rome, GA). So, I first did a search in Kingston and came up with zero houses. But, I hit paydirt when I searched for houses in Rome. The house featured at the top of this article is one of the homes.
Here are a few more of that house, including its interior:
Listed at $41,995, this home is located minutes away from Shorter College, Floyd Hospital, and numerous places to shop and eat(Click here for a map). Most of the homes in this particular area are just older homes in established neighbordhoods.
One of the immediate items that would require attention would be the lack of central heating and air. With temperatures reaching 100+ in Rome, this would be a required update with a cost of approximately $10k. Plus, it’s probably going to require additional electric work, which is going to run the bill up another $10k if you have to rewire and then repair the walls.
Furthermore, some mortgage companies may be willing to roll the renovation costs into the mortgage if your debt to income ratio isn’t too high.
My personal opinion is that if you can avoid the potential pitfalls above, it could be a worthwhile endeavor. Especially if the city is experiencing substantial growth (as Rome appears to be). With an approximate mortgage payment of $300/month, that wouldn’t be so much of a burden that repairs and improvements couldn’t be made within budget.
As always though, I would recommend doing your homework before considering any such high-risk purchase and, of course, spending the money for a thorough home inspection prior to making any purchasing decisions.