Own
Your Home, Mortgage Free! Here Is My Story.
How I Went From Being Flat Broke to Owning My Own Home,
Mortgage Free, in Just 5 Years.
< How I Found My First
House * Step
Three: Spruce Up Your House, to Increase its Value >
Taking it Slower…
My friend Candace started her move towards a mortgage-free
home 15 years ago when she bought a two-story house in a shabby
inner-city neighborhood for $22,000. Her next-door neighbors
kept pit bulls on the front porch, and another neighbor sold
drugs. However, her "Old-Portland" style house was
in excellent shape, the street was lined with beautiful old
trees, and the house was being sold for a fraction of its
true value, if you could ignore the condition of the neighborhood.
Although some of Candace's new neighbors were not so nice,
other people on her block were wonderful, and she made some
life-long friends.
This wasn't an investment that someone with children could
have made, because at the time of her purchase the neighborhood
was not really very safe. In fact, the couple she bought the
house from was leaving the neighborhood because they didn't
want their young daughter to grow up there.
However, it was the only house in town that Candace could
afford on her salary, and the area was earmarked by the city
for special loans and improvements. It was just a matter of
time before it was "discovered." Candace had the
good luck of discovering it first, and the courage to take
the chance that the neighborhood would improve. She rented
one of the rooms in her large house to a male friend because
it helped her feel safer, and the rent she received paid most
of her small mortgage.
It took a lot longer for Candace's house to appreciate in
value than mine did, but the eventual profit was much higher.
The house is now within a few blocks of one of the hottest
new artsy neighborhoods in the city, and the home values are
continuing to climb through the roof. The folks who profited
the most from the gentrification process were the ones, like
Candace, who came before the onslaught of artists, gays and
young professionals who now pay a premium to live in one of
the most sought-after neighborhoods in the city.
Her house appealed to buyers like herself who love the craftsman-style
woodwork and built-in cabinets that you can only find in older
homes that haven't been "re-muddled" or updated.
Since Candace doesn't enjoy remodeling projects, this is a
perfect niche market for her. Before listing her inner-city
house a few years ago, she had the inside and outside painted,
but no other changes were made. The house stayed "authentic,"
and brought a premium price.
She sold the house five years ago, after the neighborhood
was discovered by the artists and young professionals - and
after the pit-bull folks next door sold their house to a gay
couple who renovated the house and put in a picture-perfect
garden. The equity she took out of that house gave her enough
to put a very large down payment on another house in a different
neighborhood. Last month that house sold for $349,000, and
she'll soon be buying a mortgage-free home in a less expensive
city with the proceeds from the sale.
Next: Step
Three: Spruce Up Your House, to Increase its Value
|
Important Links:
FSBO
Selling Tips
Planet Money Podcasts
Robert Reich’s
Blog
Talking Points
Memo |
