Hi All,
Did some driving around yesterday and came accross property which fits the 11 sec rule ok, In good condition with some work to be done, the area has a 100% occupancy rate and people waiting to rent.
In the same street down the road are some houses which are empty and showing signes of extreem misuse ie. holes in the walls, broken windows etc. They are waiting to be fixed by the aborigional council who own those houses.
My wife and I have opposite views about buying this.
Any one like to comment.Regards
RPersonally I think it’s a bit backwards to buy the best house in the worst street. You will make less gains than peeople buying worse houses. Buying the worst house in the best street makes a lot more sense to me.
Dont buy it. The 11 sec rule is not everything. How about the 24 hr rule. Can you sleep at night. Will that property end up like the ones down the street. Can you always find a tenant? how far from your home is this property? any chances of capital growth? Is positive cash flow of $1000 really worth all the effort.
There is more to property investing than the 11 sec rule. I doubt Donald Trump uses the 11 sec rule.
Do you really think Donald Trump sleeps?
Steve’s first house as I recall was the best house in the street in the worst neighborhood. Seemed to turn out alright for him. [
]I would probably buy the house, assuming the numbers stacked up but then ensure that the house was managed well.
Shushar
“All our dreams can come true, if we have the courage to pursue them.” – Walt Disney
<<<<<Steve’s first house as I recall was the best house in the street in the worst neighborhood. Seemed to turn out alright for him.>>>>>>
Yeah that was 4-5 years ago. I doubt an investor with 10-20 years property investing experience would consider that a good investment.
For me if the number stacked up as well as infrastructures and all that fit into criteria I will still buy it. I believe that if the house is good and it’s in the worst street then one day those street will getting better.
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]Originally posted by Chan$:For me if the number stacked up as well as infrastructures and all that fit into criteria I will still buy it. I believe that if the house is good and it’s in the worst street then one day those street will getting better.
Hi Guys,
Im just like Chan$, i agree to, if numbers stack up and even if its in the worse suburb, i believe that suburb will improve too one day, since this all happen before as well…
Cheers,
sisRemember Inala anyone? that place has really change in the last few years.
Thanks guy’s
I am going back up in that area next week and will have onother look and try to swing the other half in my way of thinking.
If the street improves I may even have some capital gain
Regards and thanks for the input
Hi guys, I bought the best house in the worst street (well it was the best, after I fixed it up – )and it’s an OK earner at 20 percent yield, 10 after costs.
(I bought it for cashflow rather than gains though.)re:” I doubt Donald Trump uses the 11 sec rule.”
hmmm, I disagree, I think he most definitely would use it or something like it to quickly work out yields and potential profit in deals he was evaluating before he even got his calculator out.
I also think he wouldn’t touch a deal unless it made him at LEAST ten percent after costs. i.e commercial property.
So, yeah, don’t ditch the eleven second solution just yet, as it should weed out properties that won’t break even.
cheers-
miniIF – thats a small word. but can have long lasting consequences. Things may go the other way and you may incur a capital loss. Those people who trashed the houses up the road now need somewhere to rent. A house up the road may appeal to them.
Whats wrong with looking at houses in your area? Or ones that are 15 mins drive away if the ones in your area are too expensive.
Have you read any Jan Somers Books? Current numbers like the 11 sec rule dont allow for future hassles, finding tentants, attending to repairs and replacements.
I wouldn’t be going there right now.
Didn’t API recently publish a report showing the “worst house / best street” hypothesis actually has legs, mainly because of the location factor.
If you have any eye at all on CG (and who doesn’t) then remember that there ain’t a lot you can do to improve the worst street, but there’s a lot you can do to improve the worst house.
Dosen’t the state of the street, houses and the surrounding area tell you what type of tenants that are going to be attracted to your house? – Think about it?
It could take many years for the area to come good, What IF you needed to sell and the market is not as good as it is now!
I herd a story once about a millionaire property investor, can’t think of his name right at the moment, but this is how he solved the problem of the ‘best house in the worst St’ He bought the whole street over time, renovated all the houses and sold them off for a hug profit – OVER TIME! Ok if you have the money.
Jarrod
Jarrod Lane Real EstateI agree with Jarrod. What good tenant is going to want to rent next to the sort of houses you have described? You can’t rely on the council to do up the houses, they might put their plans on hold for years and in the meantime you will be struggling to find a decent tenant. investorgirl
I recently come across this myself. Part of the street was good trust housing privately owned and done up reasonable, but the other part of the street was terrible, so I drove around the area and decided the entire area was shocking. I didnt even put that on a list of properties to spot out. Maybe im just a bit harsh, but in todays climate I think its too risky. A few years ago entirely different kettle of fish I probably would have done it.
Regards Bear
“worst house – best street” is exxy
“best house- worst street” is cheaper…Again, it depends on how much money you have. Worst house in st ives or toorak etc… is going to cost a lot more than the best house in … um… broken hill.
So if you don’t have the choice, you will buy best house in worst street.
kay henry
…which, Kay, is why the world is a wonderful place.
You can have your property and I’ll have mine.[^]
what about average house in average street………..LOL
good one bear… just make sure it aint the worst house in the worst street at the worst price!!
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