I have been thinking about buying property next year and have found a 2 bedroom unit for just under $90,000. It had been renovated a few years ago so it's quite decent inside (a friend of mine used to live there so I have actually been inside many times) but it's in a pretty crappy neighbourhood. Is it worth buying a property like that to rent out just because it's cheap, or is it not worth the risk because of the bad area and the type of tenants that would probably live there?
Is It Worth Buying Property In A Bad Area Of Town?
Comments
ok.
I assume it's not in Japan.
God no, property is much more expensive here. But I will be heading back soon and am tempted to get a load for the unit.
If its a bad area located next to a good area then yes.
Who wants to rent a property in a bad area ?
Bad people?
People that don't got a choice, yo
It depends on where the 'bad' property is located.
For say Melbourne - look at West Footscray
once a 'bad' suburb is now selling like hot cakes.
Inner city push. More people want to live closer to the city so it increases housing prices and rental around those neighbourhoods.This pushes out a lot of the 'bad' people out based on affordability and over time changes the neighbourhood.
Well, it's 2 hours from Melbourne so it's not exactly close to the city but the next town over is quite big and is constantly expanding. Rent in that town is much more expensive so I'm hoping it would be a similar situation to Footscray.
Must be Bendigo then :)
nope lol
There is an old saying - buy the worst house in the best street. I would go look at a bunch of real estate agents in the area and see what similar properties are bringing and try to determine what the "feel" is for the area. If it is up and coming it might be worth it. Generally though the properties in good areas appreciate better than those in bad areas unless the area has the amenities that make it ripe for gentrification. When we first bought our place in Fitzroy we collected the syringes from the street every day, now the area is booming and the property prices have increased dramatically. A friend of mine was out in the sticks and I convinced him to buy into North Fitzroy - his old area is, relatively, stagnant and North Fitzroy has boomed.
I would go for it.
My first house in UK was in one of the worst areas but still worked out well for me.
Same for me lol
It doesn't really matter as an investment property and the rental in the area is in demand. Do some online research on the rental properties in the same area.
If you're buying it for an investment just do your homework and see what kind of returns you would get. But remember the potential risks as well… crime, vacancy rates, tenant damage, tenant falling behind in rent, higher insurance, tenant turning it into a drug house..
I bought a unit in a 'bad' area and lived there for 5 years, there were some ferals in the complex but overall not too bad. I sold it and made a profit which enabled me to buy a house.
90g is cheap, is hardly likely to devalue is it?90,000 damn. Most places in Melbourne are now approaching the million mark.
Tough question you're proposing. While a $90,000 house, assuming it's not a figment of your idealistic imagination, does sound a treat (you can buy it without even getting a loan from the bank!), the "demographics" of the residents there are indeed an important factor.
I guess it's a question of weighing up my options. Is the place I'm coming from worse than the place where my proposed new residence is.
Personally, If I'm not desperate, then I'd just leave my money in the bank for the time being, generating interest. After all, what use is having a home if you get stabbed and killed by a sick c*** (literally sick, from a drug addiction, as is often the case in "bad" areas).
Somewhat amusing question, what's the politically-correct way these days to refer to, for lack of a better term, lower-class scum?
Jesus Christ calm down snob, he said it's an investment, not to live in.
"While a $90,000 house, assuming it's not a figment of your idealistic imagination" lol, I didn't just make up the price. I found it on the market. And like Tarara said, I'm interested in buying it as an investment, meaning to rent out.
Might be different outside NSW, but, I rented a unit where the other residents owned theirs. They told me of some of the misery they had to endure. Strata fees to pay yet it was a constant battle (which they usually lost) to get strata to do anything in return; anything that gets damaged - say a tree falls, driveway cracks, all owners have to share that cost - unless the others decide to gang up and blame you. But in the end, strata has the final say - if they ever make a decision - and assuming others will DO it and not delay for months/years; you have to get consenus permission from all other tenants/owners for everything you want to do to the property (not just outside, but inside too - even down to replacing broken light fittings, aircon units, and even the colour of the paint in one instance I was told about!); if owners don't come to the strata meetings, then you simply don't get a go-ahead - and letters then have to be sent out - and hope they turn up to a meeting, give their permission, etc.
There was one family who didn't get on with the rest. They caused a lot of grief for the others. Lots strata meetings were taken up with trival nonsense that led nowhere. Rules would be laid down, family readily agreed, then went right back to their previous behaviour.
If you're going through a REA (real estate agent) to collect the rent, arrange upkeep, insurance, etc. - you can basically kiss 30% of rental income goodbye. And that's assuming you don't have a loan. (With one, you lose even more income.) But if you do all that yourself, then you have to deal with all the stuff they would (if they bothered in the first place). Lawn, toilet, inspections, chasing tenants for rent, advertising, interviewing/choosing tenants…
I think the better bet is a stand alone home. Better again is commercial property - tenants pay all outgoings - and once located, businesses don't like moving, off-putting their customers. Property needs renovating to keep customers coming in? Tenant asks your permission - and THEY pay for it. Broken window - their insurance pays.
The old adage is to buy the worst property in the best street. We did this buying a 3x1 run down - although still double brick & tile- circa. 1960 in a dress circle area for $160.000 24 years ago . Now renovated & extended here,there & upwards as Hubby is a builder it is worth apx. $2.5 mill. not that we will be selling.Reason? block size & views all over Perth - beautiful.
However, many areas are being revamped not only in Perth but Eastern States too - so why not take a gamble on this opportunity investment property?At that price it is worth it - if you can gain a good tenant. In a few years the local shire will be looking towards making the area more upmarket to gain more revenue & you will reap the benefits of their decisions. Look into it further, contact the shire to find out any future plans. But don't leave it too long or you will miss out. Good Luck.ghetto will always be ghetto yo!
Not really.
The area I live there are a few suburbs that were filled with bikie, drug, and prostitute hovels. One is now a popular night-time eating strip - for strange reason people clamour to live there, even though homes are crammed so close together it looks like England - no room for a driveway beside a house, so they all have to park (one car only) on the street.
Another (basically an island connected to the mainland by two short bridges, one at each end) had a wharf where fishing boats were moored. Properties were mainly shoebox-sized fishermen's homes. Some fishing still goes on, but as they moved out, bikies and drugs moved in. Most of the suburb's houses were falling to pieces.
But now, say a third of the homes were bulldozed to rebuild new. Most of the rest are reno'd to near-new. It was one of the nastiest and cheapest suburbs in the '70s - and one of about 4 suburbs that were the running joke that no-one wanted to live there. 15 years on, you wouldn't see anything below $600K.
At the same time several desirable suburbs (or those that were not completely undesirable) in the '70s-'80s are turning the other way…
e.g. Dumb planning decisions by council has just about killed one suburb. Suburb one was always pretty scummy/drug/dole area. Next one in-between was quite a lot better, being populated by working families with manicured lawns. Third was worse than #1. A bunch of new shops were built in the 3rd suburb, but council also separated it from the other two by a highway with this ridiculous, ugly, unnecessary, multi-million $$$ concrete ramp, rather than just widening 250m of road!? So it's actually a 5-minute drive to get from 1 & 2 to 3, though you can see 3 from most of 1 & 2, and they could've revived all 3 suburbs by building a single 300m stretch of road - through an area that can't used for anything else but a road anyway due to its rural nature.
This meant most retailers left #2. Two banks, computer, hardware, fruit & veg, hair dresser, pizza, fabric/craft, bakery, squash court, a ceramic craft place that kids loved, furniture, and more - all gone. Two-thirds of the shops are vacant. Some have stood empty a decade or two now. One was a largish brick building that had pizza, hairdresser, doctor I think, and something else I forget now. The owner surrendered and sold. It was knocked down and had ONE house built, thus reducing it's investment potential by who knows ~60% maybe!?
Suburb 1 has gotten far worse. Suburb 2 is becoming like 1 once was. And 3 is booming. So council greed turned #3 from a place of drug dens into an industrial, shopping, and family area - great - but they killed two other suburbs to do it.
Yes …buy it right now.