Is it ok to buy cheap real estate?

Question

I really need to buy another home being that my 67 year old mother lives in the home I own now and I hate living here. I seen a condo for $65,000 and that is a perfect price for me to have my own space and live confortable finacially. The only thing is the condo is in a ok area not too good and it's only 924 sq ft. I was told that location is very important, but I was thinking that I could rent it out when I'm ready to move or when the market goes up I can possibly sell it. I was wondering would that be a good move?

Answer 1

Can you afford the full monthly cost with a fully amortized loan on a rate that is fixed for at least five years (principal, interest, taxes, insurance, association dues, and anything else that may be attached to that particular property)?

If the answer is yes, than the answer to your question is maybe. If the answer is no, then the answer to your question is no.

To see if that maybe turns into a yes, you're going to need a full evaluation of the area's market and its likely future path. Only someone who knows your area's market can do this, and my market hasn't seen $65k condos in ten years, and it's not likely to again.

This might be the greatest idea since software licensing, or it might be something like a scene out of a horror movie (where the audience is screaming "Don't go in there! That's where the monster is!"). Even if I was in your area, I couldn't tell from the information given, and nobody else can, either.

Answer 2

this could be a good move for you. you have to consider several things though before you decide.

remember you tend to get what you pay for. if a house/condo does not cost a lot it probably needs a lot of work, is in a bad location, is small, and other undesirable things.

it could be difficult to rent or sale the condo. a friend of mine was looking at houses, condos, and townhouses. she was told that condos and townhouses are difficult to resale. while a person buys a condo, they are still part of a larger complex that the individual does not own. will it violate your purchase agreement or some other legal document you sign if you rent out the condo. even if it is permissable to rent it you still could have problems since you said yourself it is not very large and it is not in the best location which can make it difficult for you to sale or rent it out. you are also hoping for the market to be better when you want to sell it but it might not work out that way. a relative of mine needed to move and bought a new place thinking the old one would sell in a few months. however, she has been unable to sell her old house, so she has two mortgages and properties to pay taxes on.

have you considered the additional expenses. most ocndos have monthly condo fees. if not can you afford the condo and need a mortgage will that fit into your monthly budget?

can your mother live alone or does she need help? is that why she was living with you? if she needs help it is worth considering if your moving out will improve your situation or create more problems for you.

there are positives to buying it. i think you would have equity in the condo verses renting a place you would not have equity. if the condo is just for you - you might not need much space. less space should equate into cheaper heating/cooling costs. in addition, when people have space they tend to fill it if you do not have the furniture and decorative touches now you might feel the need to go out and buy them but with a littler space you might already have enough stuff to make it homey. if it is too stressful living with your mom moving out could be the solution. the area is ok and at least it seems to be a place you feel comfortable in. you are not buying the condo to try and immediately sell it for a profit - you want to live there and no one knows what the market will be like when you want to sell it so you could get a place of your own and make a profit when you go to sell it.

these are just points for you to consider. you know your situation better than we do and will be best able to decide what is best for you.

best wishes!

Answer 3

This not my area of expertise...sorry...
But I will share what i know...
Sounds like a good investment...but it can be a little hard to decide, especially with the state of the market. Before you decide, also look into the loan terms. Sometimes, the price can be good, but the loan terms is where they get you.
Good luck!

Answer 4

That is what a lot of people do. You also have to think of what kind of people you would be renting to if it is not a real good area. You would need to require background and credit checks to make sure that they don't have a criminal history, and have a good payment history. (Although not everyone with bad credit are bad people)