Cheap old houses have always had a unique charm that draws home buyers looking for character and history. These properties typically feature architectural details that are hard to find in modern homes, such as handcrafted woodwork, large windows, high ceilings, and vintage fixtures. They offer a sense of nostalgia and craftsmanship from eras when houses were built with intricate design elements that give them personality and warmth. For buyers who appreciate the stories and styles of the past, old homes can provide a sense of connection to history and a distinctive aesthetic that sets them apart from cookie-cutter modern houses.
In the early 2020s as houses began getting more expensive while also selling over asking price alongside rising mortgage rates, the allure of cheap old houses got even stronger. Because of the rising interest in older homes, we wanted to shine a light on how to buy cheap old houses, where to find them, how to get a mortgage on one, and things you should consider before buying one.
Why buying cheap old houses can be a great investment
Buying an older home, especially one that’s priced affordably, can be an excellent long-term investment. These homes are often located in established neighborhoods with mature landscaping, historic districts, or desirable areas where property values are more likely to appreciate over time. Since many cheap old hoses may need renovation or updates, there’s an opportunity to add value by restoring or modernizing the property. If done carefully and thoughtfully, renovations can significantly increase the home’s market value, offering a higher return on investment.
Additionally, many cities and states offer tax incentives, grants, or low-interest loans for homeowners willing to preserve or restore historic properties. These programs can offset renovation costs, making the investment more financially viable.
How to find cheap old houses in Missouri
Sites like Zillow, Realtor, and Redfin allow you to search for properties based on criteria like price, age of the home, and location. You can filter your search for homes built in specific eras to focus on older houses. However, there are some specialty sites like Old House Dreams and Cheap Old Houses that specialize in showcasing older homes. Searching foreclosed and bank-owned homes on RealtyTrac or other sites can also turn up some interesting properties.
You can also attend public auctions and tax lien sales to find cheap old houses. At tax lien sales, the home will sell for the amount of the unpaid taxes. Other options include:
- Search for home listings containing “fixer-upper”
- Contact Missouri Preservation Society
- See if your desired area has a Local Historic Commission
How to Get a Mortgage for a Cheap Old House
Once you’ve identified a home you are serious about buying, securing a mortgage will be a little different than with a newer home. Your home inspection here will be paramount. Lenders will assess the condition of the home during the appraisal process. If the home has significant structural or safety issues (such as outdated wiring, plumbing, or foundation problems), it may not qualify for a traditional mortgage without certain repairs being made.
If the home does need repairs, here are your options:
An FHA 203(k) loan – is a government-backed loan that allows you to finance both the purchase price of the home and the cost of renovations in one mortgage. The home will still have certain standards it must meet, you’ll typically need a minimum down payment of 3.5% of the combined purchase price and renovation costs, a portion of the loan will be allocated for repairs, which must be completed within six months of purchase, and the loan can cover up to 110% of the home’s post-renovation value, making it a good choice for properties that need significant repairs.
The Fannie Mae HomeStyle Renovation mortgage – is another option for buyers looking to finance both the purchase of an old home and its renovations. You’ll need a higher credit score compared to the FHA 203(k), and your down payment will be based on the total cost of the home plus repairs. However, you’ll have more flexibility in terms of the types of renovations you can make, including luxury upgrades, compared to FHA loan limitations.
The Freddie Mac CHOICERenovation Loan – This loan is ideal for properties that need modernization or repairs. It also covers homes that have been affected by natural disasters or need repairs to comply with modern building codes. The renovation costs are rolled into the mortgage, and you have up to 12 months to complete the renovations.
VA Renovation Loan – If you’re a veteran or active military member, you may be able to get a VA renovation loan, which combines a VA loan with a renovation loan. This can help you finance the purchase and repair of a cheap old house with no down payment required. You must meet the basic VA loan eligibility requirements, such as service length and discharge status. However, this loan allows you to roll renovation costs into the mortgage, helping you afford necessary repairs or updates.
Things you should consider before buying cheap old houses
When looking for cheap old houses, buyers should take these things into account to ensure they are making a wise investment and are prepared for the unique challenges that come with purchasing an older property:
- Structural integrity: Foundation issues, outdated wiring, old plumbing, or roofing problems are common in older homes. Make sure to get a thorough inspection to assess the true condition of the home.
- Unseen problems: Mold, asbestos, lead paint, and pest infestations (termites, for example) can be common in older properties. Dealing with these problems can be expensive and time-consuming.
- Renovation costs: Cheap old houses typically require repairs beyond cosmetic upgrades. Buyers need to set aside a budget for repairs such as roof replacement, electrical rewiring, plumbing, or HVAC system updates.
- Cost of materials: Replacing old, outdated materials (like plaster walls or hardwood floors) can be costly, especially if you want to preserve the home’s original character.
- Contingency fund: It’s wise to add a contingency buffer to your renovation budget in case unexpected repairs arise after the home inspection.
- Insurance costs: Insuring an older home can be more expensive due to factors like outdated wiring or plumbing, structural issues, and a greater risk of damage. Make sure to get multiple insurance quotes to understand the true cost of coverage.
- Preservation laws: If the home is located in a historic district or has a heritage designation, there may be restrictions on what changes you can make.
- Zoning codes: Older homes may not comply with modern building codes, and buyers may need to make significant upgrades to bring the property up to standard.
- Regular maintenance: Older homes typically require more upkeep due to aging materials and outdated systems. Buyers should be prepared for ongoing maintenance costs, especially if they want to preserve the home’s historic charm.
- Specialized contractors: Finding contractors with experience in restoring or working with older homes may be necessary and could come at a higher cost compared to standard home repairs.
- Time commitment: Renovating and maintaining cheap old houses is often a long-term commitment. It requires patience, especially when dealing with historical preservation regulations, zoning laws, or unexpected repairs.
- Willingness to compromise: Buyers need to have realistic expectations. Cheap old houses often come with quirky layouts, outdated designs, or smaller spaces compared to modern builds.
