A huge cliché in the real estate industry is “buying the worst house on the best street”, and for good reason. Although it might seem confusing if you’re hearing it for the first time (why wouldn’t you buy a better house in a different neighbourhood?), there is a large amount of logic behind it.
In fact, experts suggest that buying the worst house on the best street can actually produce better financial gains than opting for one of the more commercially-appealing properties, as most buyers will ignore the home, leaving the prices much lower. However, there are two sides to this argument. Read on as we take a look at both of them to find out whether buying the worst house in the best neighbourhood is right for you.
The Advantages to Buying the Worst Property
As mentioned, buying the worst property in the best neighbourhood comes with a number of advantages.
- Buyers ignore the property, leaving a reduced number of bidders. This gives you the perfect opportunity to grab a bargain.
- After you’ve conducted the required DIY, the value of surrounding property will increase the value of yours.
- It’s a great opportunity to get into a top neighbourhood, without having to battle the issue of affordability.
- You’re almost certainly not going to waste money on renovations, as the neighbourhood will help your property hold value and even increase in value.
How Can You Make the Right Decision for You?
Buying a property is likely going to be one of the biggest financial decisions of your life, which can make it difficult. Consider the below points to find out whether buying the worst property in the best neighbourhood is the right call for you:
1) Bear in mind that a property is so much more than its external appearance. Just because it might not look the part on the outside right now, that doesn’t mean it won’t look great after you’ve put some time into it.
2) Check out the architecture and structure of the property. If it can support the renovations you’re planning to carry out, it might not be all that bad.
3) Will your renovations be cost-effective? If you need to add $50,000 of value to your property within 2 years and the renovations are going to cost the same, it might not be worth it.
4) Will you be able to live in the house whilst you’re carrying out renovations? If not, consider where you’re going to stay whilst the improvements are underway.