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  • Property-a-holics

    You know to walk away from a property deal when ....

    I've just completed the due diligence "check list" for a blog.  It ran to 8 pages*!

    It includes a list of "nasties" that equate to a turn-off for tenants and "not in my back yard" for when you want to sell:

    Busy road (noise)

    Factories/depots/industrial sites (noise smells)

    Sewage works (smell)

    Graveyard

    Police Station

    Pollution

    Over-dependence on the Public Sector

    Fire Station (sirens)

    Mobile phone mast

    Pubs (noise)

    Restaurants (noise/smells)

    Youth Centre (groups)

    Prison

    Drop-in Centre/Halfway House

    Vandalism

    Litter

    Excessive dog mess

    Satellite dishes

    Dog kennels (noise)

    Mobile homes

    Graffiti

    Poorly maintained properties in the vicinity

    Dumped rubbish

    Playgrounds, parks, recreation areas (noise/groups).

    Railway station or railway tracks (noise)

    Sinister history (death of former occupant/murder/fire).

    Anti-social neighbours/behaviour

    History of flooding

    High crime rate

    Parking shortage

    Hoodies hanging around on street corners

    ... and obviously if the numbers don't stack!

    What else would cause you to walk away from a property deal?

    Or would some of the above issues not concern you?

    *Thanks to Ahm Charles for his input to this list, plus other tribe members through their contributions on various threads.  "None of us is as smart as all of us". Smile

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    Vanessa

     

    On the basis that no one NEEDS to buy an investment property, I think the deal should grab you by the throat. If I need to run the numbers, or work through a checklist to know if the property is a goer, then it’s probably marginal and so I try and walk away. Of course sometimes the need to just own more property gets the better of me...

     

    For me, the more relevant question is: Would my prospective tenant be happy to live in this property for a reasonable amount of time? So things like crime / anti-social behaviour is a turn-off for most, but a park across the road could be a good thing. As ever, I think it’s about knowing the area you’re buying in and the type of tenant you are trying to attract.

     

    Harvey

     

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    I agree Harvey.

     

    I do think a check-list is helpful for novice investors and I know that I have made mistakes when I have not done thorough due diligence.  I do think it is powerful to double check everything and be sure that you have covered all bases.

     

    With regards to parks, I generally think green spaces are positive. However, some parks attract gangs who hang about for long periods.  This can be intimidating.

     

    I always try and visit the property at different times to the day to see what is going on in the area.

     

    Another thing I should have added to the list is "Traffic bottle neck", as this can significantly increase the journey time to work and could put tenants off.

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    I tend to walk away when I see a family looking very keen.  A mum/dad and their child or a happy couple looking for their ideal home.

     

    They're likely to get much more emotional about a purchase, be prepared to pay more (sometimes above market price) and I try to avoid competing with them at all costs.

     

    I will consider buying properties with all the problems mentioned above if the discount to real market value (judged by comparable evidence) compensates me enough for the additional risk(s).

     

     

    Smile Martin

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    Sorry to be a devils advocate but few of the above concern me unduly. Its the territory I inhabit .

    The properties in these areas are going to be cheaper and the figures therefore will stack sweeter!

    It maybe selfish from an investment point of view but I dont have to live in these houses and why I have sympathy with the tenants who line up to take them dispite of the unfavourable living conditions the LHA rental yields are not affected. I also dont plan to sell so thats not an issue for me.

    I agree with flooding though as an issue after seeing my friends house flooded twice that is a real no no.

    I would add to that list `gut feeling`. sometimes its hard to quantify and maybe its just a sum total  of all the above. But we all have it sometimes dont we when we walk away from a viewing screw up our face and slowly shake our heads and say to the agent...... Thanks but - No this ones not for me.......

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    Jonathan Clarke. http://www.buytoletmk.com


    Hi Jonathan,

    Interesting and different perspective!  Smile

     

    I personally would not buy anywhere that I would not be prepared to live in myself.  If I feel frightened of walking home at night, then female tenants are likely to feel the same, so I have potentially cut out 50% of my market place.

     

    I don't think I should expect my tenants to live there if I would not live there myself.  Just my personal strategy and philosophy!

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    We purchased a flat with a Drop In Centre for homeless and alcoholics a few doors down. 

    Every time the flat comes up for rent , we hear the same feedback.  "We really liked the flat but the Drop In Centre with all the people hanging around outside really put us off ... ".  Without fail, that is what they say. 

    Just my experience as we really struggle to rent this flat every time because of this. Sad

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    I agree with your philosophy Vanessa, I would only buy somewhere that I'm prepared to live myself.

     

    Re your list above, I'd add Chapel of Rest. There's a house next door to one in a local village - it's been on the market for years. Also fish and chip shop/takeaways, unless that comes under restaurants. I'd probably avoid anywhere very close to a mini-market as well, because of stop-off parking problems.

     

    The ones that wouldn't necessarily bother me so much are parking shortage and satellite dishes. Properties with parking are definitely at a premium, but there are so many terraced houses without parking in our area that it would be cutting our options severely if we ruled them out altogether. Satellite dishes, well, it would depend on the area. If the street/area looks like Jodrell Bank then I'd give it a miss, but if it's the average, run-of-the-mill dish then no problem, particularly as most of our tenants want satellite TV.

     

    Kind regards,

    Jayne

    https://www.twitter.com/jayneowen

    Trading as Mozaique Property

    Buying, selling, renovating and letting property throughout South Wales

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    Jayne Owen @jayneowen

    Editor and Writer: Your Property Network magazine

    Investor: Mozaique Property, South & West Wales and South West England

    Occasional reviewer at The Property Bookshop (@Property_Books)

    I have a house next to a funeral parlour. No problems letting it & the neighbours are very quiet!

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    If I may add to Vanessa's list, dirty doors and dirty windows. If there is a house that has an extremely dirty door, often with dents or obvious areas where the door has been patched up, this can denote general lack of care for the property and it's environs as can dirty/broken windows or dirty net curtains. I have noted this can be a sign of a large and rough family.

     

    Where I used to live there was such a house, the family were in a housing association property, next door to a private residence. The owners of the private residence tried to sell the property for 10 years but no one would touch it.

     

    The tenant and her sons were in and out of prison for years, they managed to burn the house down, leave tires and car parts in the front of the house and on the street, race up and down the street on mopeds, have loud parties, and  rough looking dogs. They were self confessed burglars and frequently offered stolen goods to people living on the street. They were eventually evicted and the house sold after the property was empty and boarded up for 18 months. This was in a nice part of Fulham, SW6 in a house worth £720k. There can be bad tenants on any street.

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    I showed a prospective tenant a house and foolishly I missed BBC Local news that morning.  As I walked up the street I found the bottom access to the street was taped with "police line - do not cross".  Apparently there had been a murder there the night before Sad !!!!!!

     

    Needless to say it took a few weeks before the house rented!

     

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    Professional student and residential lettings in Liverpool.
    http://www.topproperty-services.com
    Twitter: @ToppropertyUK