Low Cost Housing Options

Finding more affordable housing is a quick way to get a handle on one’s finances, especially if they’ve spiraled out of control.  With over 1 million homes lost to foreclosure in 2010, there’s clearly a need for more affordable housing.  Fortunately, there are several options for low cost housing, and none of them involve moving to the roughest neighborhoods in your city.

Purchasing

Foreclosed Homes: Foreclosed homes can be purchased either at a foreclosure auction or directly from the bank that seized the home. Homes that have been foreclosed typically sell for around 30% less than the appraised value. However, there are risks involved when purchasing a foreclosed home: sometimes, the house has been sitting unused for many months, and may be too decrepit to be eligible for a mortgage. Having an additional money pool set aside for repairs is necessary, and purchasing title insurance can protect you from former homeowners reclaiming their property (if the bank wrongfully seized the home).

Live Within Your Means: Foreclosures can happen to anyone down on their luck or thrown in the wrong circumstances. However, there are numerous foreclosures resulting from individuals who purchased homes they could not afford. Experts suggest the cost of housing should not exceed 25% of an individual’s monthly income.

Renting

Renting is a more affordable low cost housing option, as no large down payment is necessary, and maintenance and upkeep is generally the responsibility of the landlord rather than the tenants.

Apartment Complex: Apartment complexes function a little like a chain restaurant – one company can own multiple complexes within a given city (and sometimes one company will own multiple complexes in multiple cities). These apartment complexes typically have twenty or so different buildings on the premises (with well over two hundred individual units available), a clubhouse, shared pools, tennis courts, and workout facilities. These apartment complexes typically run numerous specials on their housing, including a month of free rent when signing a year’s lease. This month of free rent can be stretched across all 6 or 12 months of the lease, effectively lowering the monthly rent by $25-$50 per month. These larger complexes frequently offer raffles for free rent throughout the year, or coupons for referrals.

Government Assistance: Contact your state or local government to ask about the HOME Program, a program designed to help new homebuyers, renters, or existing homeowners. Also try contacting the Office of Community Planning and Development or the Office of Housing for more information about affordable government-assisted housing in your area.

Craigslist: Numerous rental property listings are posted daily on Craigslist, and occasionally an affordable gem in a great part of town will surface.

Other Tips

Live Further Out of Town: The cost of living in a certain area is determined by a combination of the area’s affluence and the overall convenience of the location. Living downtown will usually fetch the highest cost, while moving ten or fifteen miles outside of the city’s core can lower average monthly rent payments by 50%.

Get a Roommate: Having a roommate is significantly cheaper than living alone, as the burden of monthly expenses is split in half. Also, two-bedroom units only rent for just a few hundred dollars more than a one-bedroom. For example, a one-bedroom studio may cost $700/month, but a nice two bedroom next door costs $850. Numerous young adults or coworkers find themselves sharing housing as it saves money and provides companionship.

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