Should property next door influence my purchase decision?

Question

I’m looking at duplex that is in very good town. The problem is that this property and property next door are the 2 worst properties in neighborhood maybe the whole town and the 2 are conjoin by driveways and parking lot (C properties in A town). I think the reason for the problem is the poor choice of tenants and lack of any property management (I have better section 8 tenants in my B property in C City). Next to both of these properties are condominiums and houses in good to very good condition. I’m thinking about making offer on the bad property that is for sale with condition to have current tenants out by closing date. Quickly rehab the property (mainly cosmetics, maintenance) and rent it out again to better prospecting tenants, this should be no problem (good town, very good schools).
Because the driveways are connected I can not easily isolate the two houses. ? The two properties form almost one complex and each is very visible form other side.
I’m thinking that in future I may try to purchase second duplex but I don’t think I will be able to afford this in next couple of years plus I don’t know if current owner will be willing to sell.
My concern for now is if the tenants and condition of the property next door will act as a major deterrent for getting good tenants for my property? Do you think my concerns are valid? Any ideas how I can make this work?

Loc R. · Answer

At the very least I would start by contacting the owner of the other property and try to get a pulse as to where he/she is with respect to selling.  Who knows where the conversation may go...

Steve K · Answer

If your planning on holding this long term and the price is right I'd probably proceed and try to buy the other properties.  If its an A town maybe there are some code enforcement tactics you can use to entice the other owners to sell or fix up their properties a bit.

Aaron Norris · Answer

Have you tried to connect with the other owner and see if you can negotiate a deal?  Even if you don't have the money, you can lock it up and offer one of the deals to another investor.  If you've negotiated a good price on the first, walk the comp to the second home just to see. Might as well.

Ty Golera · Answer

An A town and neighborhood but C property seems to a be a green light for me. BUT, when you mentioned you have no control over the other adjoining property that could create problems. Why would your new tenants want to move in right across from lower standard tenants and property? Too bad a fence or tall bushes are not a possibility to divide it further

Will Barnard · Answer

There you have it Jerry, dig into some details and let us know what you find out.

Rich Weese · Answer

I would also want to know which way the neighborhood is trending. Are there other properties that were as bad as these that have been fixed up? If the neighborhood is trending up and these are the only two bad properties, I would try and proceed to see if a deal could be worked out to buy the other unit or at least have an agreement as to how the driveway was going to be maintained in the future. If the neighborhood is trending down I would definitely pass on these properties. Rich

Will Barnard · Answer

I would agree with others in that the property next to you has two potential problems for you, the quality and the connected driveways. Without owning both at once, you may run into troubles.

I particualrly like to avoid trouble so if I could not buy both, I personally would pass.

Account Closed · Answer

Yes, the other neighboring properties can definitley affect your property. If they are as bad as you say they are, it will definitely have an affect on the price of your house and attractive value.

Lynn McGeein · Answer

Jerry, It would depend on how disgusting the other one was.  If it is something tenant related that you could report and have them be required to clean up, junk cars, garbage, etc., then I'd move forward.  If it's major like new siding, windows, etc., I'd try to find the owner and ask if they plan to fix anything in the near future and gauge their response to figure out if they are willing or planning to work on it or just don't care.  Many places have the owner of record listed online, and some even give the current mailing address for them.

Bill Gulley · Answer

Note the times posted, LOL, I didn't see either of the post above or below so we had similar thoughts...

Consider buying both! Otherwise I'd pass on it.  While I have motivated others to improve their properties, one way or another, it's work to do so, it requires time and effort and the deal needs to compensate for that. What happens too is that neighbors just get use to seeing a dump and eventually ignore it, your porsepective tenants or buyers will not. If you are concened they will be too. Buy both and have control of the issues or I'd pass. Good luck....

Should property next door influence my purchase decision?

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