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I am looking at buying a cute little 1,200 square foot house that is in pretty good shape. The house is about 30 years old. The home needs a little bit of work. It would cost me about 5,000 to get the home in real good shape. The only problem I really have with buying the house is that the house is located in a shabby and rundown area. One of the neighbors has a nice property but the other neighbor on the other side does not take care of thier property. The 3 houses directly across the street are rentals that have junk all around the front and back yards. There is also a run down apartment complex about 200 feet from the home that is for sale.
I could buy this property for a really good price. I guess the main question is should I go ahead and buy this relatively nice little home and live in the ghetto or should I just wait to buy a home in a nicer area. If I wait I might find a home in a nicer area but I will probably have to pay 20,000 to 30,000 dollars more for the home. Is it really worth it to pay 20,000 to 30,000 dollars more for a home if the home is in a better area and not in the ghetto.
I am looking at buying a cute little 1,200 square foot house that is in pretty good shape. The house is about 30 years old. The home needs a little bit of work. It would cost me about 5,000 to get the home in real good shape. The only problem I really have with buying the house is that the house is located in a shabby and rundown area. One of the neighbors has a nice property but the other neighbor on the other side does not take care of thier property. The 3 houses directly across the street are rentals that have junk all around the front and back yards. There is also a run down apartment complex about 200 feet from the home that is for sale.
I could buy this property for a really good price. I guess the main question is should I go ahead and buy this relatively nice little home and live in the ghetto or should I just wait to buy a home in a nicer area. If I wait I might find a home in a nicer area but I will probably have to pay 20,000 to 30,000 dollars more for the home. Is it really worth it to pay 20,000 to 30,000 dollars more for a home if the home is in a better area and not in the ghetto.
Is the area just ugly or is it a high crime area? I would never want to live in an unsafe neighborhood. If I could afford more I would always pay more for a better neighborhood.
That being said, there are times when a dump location is in the process of re-gentrification - as they call it.
But you have to be able to read your market very well. I did it, but it wasn't easy and took a lot of additional time and effort. Securing rehab financing was not easy, some insurer's balked at insuring in the neighborhood.
However, 7 years later - despite the bubble and the crash, my property is worth much more than what I put into it per comps, the neighborhood is 97% owner-occupied now where it was 99% trashy college rentals prior.
The "location" of ocngypz's home STILL had to have the appealing aspects to get it to "gentrify" -- sounds like the drunken college kids were probably replaced with well paid college profs. If the OP's "run down area" has lots of rentals that are covered with trash and there really is nothing to suggest that things will ever start looking up...
In situations like the OP is facing it is almost certainly far more likely that things will continue to decline.
I would keep saving until you can afford the worst home in the nicest part of town, lots more room for appreciation in such situations.
Quote:
Originally Posted by ocngypz
Location, location, location.
The three most important words in real estate.
That being said, there are times when a dump location is in the process of re-gentrification - as they call it.
But you have to be able to read your market very well. I did it, but it wasn't easy and took a lot of additional time and effort. Securing rehab financing was not easy, some insurer's balked at insuring in the neighborhood.
However, 7 years later - despite the bubble and the crash, my property is worth much more than what I put into it per comps, the neighborhood is 97% owner-occupied now where it was 99% trashy college rentals prior.
The "location" of ocngypz's home STILL had to have the appealing aspects to get it to "gentrify" -- sounds like the drunken college kids were probably replaced with well paid college profs. If the OP's "run down area" has lots of rentals that are covered with trash and there really is nothing to suggest that things will ever start looking up...
In situations like the OP is facing it is almost certainly far more likely that things will continue to decline.
I would keep saving until you can afford the worst home in the nicest part of town, lots more room for appreciation in such situations.
Actually, no. It was a matter of ftb's being priced out of other neighborhoods, new retail development immediately to the south and east and lack of affordable homes to the north. Also great transportation links to train, long distance bus and local bus and close to highways.
We had one area of the city that underwent re-gentrifcation in the '90s. It was a failure. While they were beautiful old victorian homes once rehabilitated, the area was still surrounded by junk neighborhoods, had no new retail development, lousy transporation links and not close to highways. It's a shame as people tried so hard.
$20K to $30K more is relative to the actual purchase price, which we don't know - so that would help.
Also, lots of other factors are involved:
Do you intend to stay there a long time or not? If so, are you comfortable with the area? Despite it being trashy, is it some place you would want to live? Does getting a good deal mean you hope to sell it and make money later, or does it mean you will have a great low monthly payment?
I would have a great low monthly home payment. The area will never be gentrified. The area that the home is in has been run down for about 60 years and the area will not improve. I am not sure if the area will get any worse than it is.
I would have a great low monthly home payment. The area will never be gentrified. The area that the home is in has been run down for about 60 years and the area will not improve. I am not sure if the area will get any worse than it is.
It can get worse - believe me. Slumlords not paying taxes, city holding tax lien sales......entire neighborhoods being overrun with rats.....stray bullets hitting the side of your house. I've seen it all with my own eyes.
I would have a great low monthly payment for the home if I bought the home. The home itself is a allright home. I would probably have to put about 5,000 dollars into the home to get it to look really nice. It is a cute little home in a run down junky area. It is a home in a small town so I am pretty sure the area will never get as bad as a big city ghetto. There are some gangs in the area but not too much tagging in the area. The area is run down and junky and it has been run down and junky for the last 60 years.
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The exceptions STILL prove the rule...
