I’m going to burn through all the reasons why tract housing is the worst possible type property to buy, then tell you why it does make sense to purchase. Housing tracts are built by one or more builders who will typically build the tract out, sell all the homes and move on to the next phase of the project.

Price is a driving factor so materials will often not be the highest quality and speed is usually more important than high quality workmanship. House designs cost money and slow contruction down, so it’s fairly common to have 4 designs or so which will provide 8 possibilities for each lot when the designs are reversed. Land is an expensive portion of a new homes cost, so most tract houses will have minimal lot size.

So, we end up with new construction, probably not landscaped, where the quality of construction is adequate but not outstanding. Materials and features used in the construction will also be adequate, but nothing you would write home about. So why would anyone purchase tract housing?

Think of it like a cheap import car vs an expensive import car. The cheap import gets the job done without fancy amenities and higher grade materials at a cost that is reasonable and affordable. The high quality expensive import comes later when funds and temperament are more suited to the purchase of this kind of vehicle.

Some people put a ton of money into their cheap import car improving performance and the quality of the amenities provided. It is difficult to recover money that has been “invested” in projects like that.

Tract housing is perfectly suited for spending 5-10 years while building equity as long as the property isn’t over-improved. By all means improve and update, just keep it within the standards of the area. Eventually, you’ll either decide you are happy where you are living, or you’ll get to a point where custom housing becomes affordable for you.

One good long term strategy is to do a cash out refinance on your existing home if you are planning on moving. Talk to a lender or two before you do it, but if you can keep your current home as a rental and use the “cash out” as part of the down payment on a new property, you’ll be started on a little real estate empire.

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