Virtual offices help the cheap old house phenomenon
Just as we might sometimes think about life events as happening either before or after 9/11, we might, in the future, start thinking in terms of life events before and after COVID-19. (Numerologists might take note here.)
Case in point
Before COVID-19: Most people went to an office to work, many of whom wasted hours each day commuting.
After COVID-19: A large percentage of workers began working from home, saving time and often being more productive.
This work-from-home environment, while it might not be as commonplace after the pandemic is over, will most certainly play a bigger part of life in America. The ability to work from home, combined with the difficulty of getting into a starter home in the city, is helping stimulate the cheap old house movement. If you can work from home, it doesn’t matter where you live. Living an hour outside the city, and with acreage, is starting to look like a good, viable option for a lot of folks.
Investors take note
As an investor, either as a buy-and-hold or a fix-and-flip type, you might have focused on urban, walkable areas -- a good bet for investment properties for decades. Walkability will likely always be popular, but it’s no longer the only game in town as people are starting to move to rural areas.
And a bonus: Investors might be able to get a 20% income tax credit when they rehab historic homes.
Millennials have been finding cheap old houses from Instagram feeds as well as websites such as "Cheap Old Houses" and "Circa," both of which actually started promoting this movement before any whiff of a coronavirus was in the air. The movement back then was aimed at people who longed for a simpler lifestyle, like in generations past.
This first wave of the cheap old house movement attracted people with a passion for home renovation and historic preservation and who wanted to live a simpler life, perhaps by getting into farming or maybe woodworking as a profession.
But after COVID-19, white-collar office types found they could also live in a more rural setting and still keep their profession of choice. And it’s this post-COVID group that's putting the cheap old house movement on the radar.
What’s the catch?
To be successful at the cheap old house movement, homeowners need to be pioneers of sorts, returning to the way life used to be. But as the saying goes, "You can’t go home again." The cheap old house buyers typically will not snag a move-in-ready home. They will instead likely need to renovate that cheap old house, especially when paying only five figures for the property.
Also, getting contractors to come to remote locations can prove challenging, so professional flippers with connections probably have an edge here.
How to find your cheap old house
Finding a cheap old house to live in or to buy as an investment property is as easy as conducting an online search. You can search for "cheap old houses" to see what captivates you, or you can modify your search by location, price, or acreage, for example.
The bottom line
Remember the first rule of flipping: Not every house is a good investment. Just because you can get a cool, even fantastic, home with lots of potential doesn’t mean you’ll make money doing so. Prime location, historically the most important factor in real estate, is not necessarily part of the equation with cheap old houses.
The cheap old house movement is still in the pioneer stages, really, meaning there are great risks -- but with the possibility of great rewards. If your interest is piqued, you might want to network with people in the movement to see what sort of interest you get from potential buyers. Besides, if you do buy and renovate a cheap old house and can’t sell it, at least you’ll have a cool vacation home to escape to if another pandemic hits the scene.