About this episode
Being Intentional: If you are intentional, you can make $100,000 off the next house you own. Here are some tips when buying a home.
Buy in an area that is just about to take off. We bought our fourth house in an area that, unbeknownst to us, was about to take off. The city had just passed a bill that paid the business storefront owners to renovate their building exteriors, and had new construction. A large box store complex was built less than a mile outside our residential area, and a new movie theater moved in. Our house doubled in price in 5 years.
If you are handy with a hammer, try buying a distressed home, one that someone moved out of and may have not kept clean, or taken good care of. Only buy a house with good bones, that mostly needs cosmetic repairs. If you put in the sweat equity, you may get much more out of it, then buying a house for full price. I’ve made over $100,000 on the last two houses I’ve lived in, after living in each for 5 years.
Buy small and grow into larger homes. Our first and second houses taught us a lot. We made money on the first, and lost money on the second. The third and fourth house is where we really learned. We bought a distressed home, in Alaska, for $180,000, yet it was worth $280,000 after some repairs and cosmetic work. We took the $100,000 and bought another foreclosure in Missouri, for $98,000 and our house was paid off. We sold the fourth house for $210,000, and bought another foreclosure, worth $300,000, with cash. We will never get another mortgage.
Don’t buy at peak market – The housing market goes up and down in value. If you buy a house at top value, just before the price adjusts, you are looking at owning a house, but owing more than it is worth. I have done that before. Watch the housing market. The rule of thumb is, take the last recession and add 10 years to it. If you are near, or after, 10 years from the last recession, do not buy. Rent for the next year or two, until the next price adjustment, and then buy. Housing prices always go up over time, and come down during a recession. Before President Bush, all recessions were within 8 years; his policies pushed it to 10 years. Trump’s policies now pushed it to 12 years. I predict President Biden will have a recession in the next 2 years, partially in part because of his policies, and partially because of the time that has elapsed since the last recession. We are due for a correction. Some would say that the COVID “recession” was our next recession, but as you can see from prices, there was no adjustment (minus a quick one, due to the stock market). Then it rebounded back to where it was before and kept going; so, no real recession happened.
Buy a house with newer appliances – Most of the time, you can find houses with newer appliances, within 10 years of age, but know th
