How much does the reputation of an area influence a BTL property

[geek84]

Hi Folks
My cousin is thinking of buying a new build property to let out. He tells me it is quite cheap. However, this is largely due to the fact that the area had a bad reputation about 20-25 years ago. The usual stuff - burglaries, drugs, prostitution etc. However, it seems the area has cleaned up its act. The old properties have mostly been demolished and replaced by these new builds.
Would you recommend that my cousin buys a cheap priced property in that area, or not to bother because of the previous bad reputation?
Thanks

[Melboy]

Ask the neighbours. They will soon tell you what life is like in their location.

[Richlist]

Sometimes its unfair to generalise BUT this is one of those situations that I think its worth raising a comment. In my (limited) experience it often (not always) works like this.....

When property prices in an area are very low (often way below the national or regional average of similar property) the:

The Upside is:-

* It will often provide a very good rental return......usually in excess of the average.

The Downside is:-

* It will often attract the wrong kind of tenants AND

* The capital value will NOT increase at the same rate as other comparable properties in other areas.....sometimes the property value will fall.

[geek84]

Thanks for your reply.

So do you recommend that my cousin buys the property?

[Richlist]

So do you recommend that my cousin buys the property?

You have provided just 6 lines of text which contain very little detail so, my recommendation is that your cousin either asks someone else to find the answer for him or one of you supplies more information.

Alternatively, you could always wait for someone else to come along and provide you with an equally worthless, off the cuff answer.

[Melboy]

So do you recommend that my cousin buys the property?

It is just possible to answer that question without more details.

Ask a local estate agent what they would consider the property to be worth ask a local letting agent what letting values achieve.

In my experience if a new house is in a not so desirable area and is cheap then there has to be a reason for it and those reasons could contain many answers to your original question....... perhaps.

[geek84]

Good Morning folks

Thanks for your advice, However, all properties in that area are still under construction.

Would an estate agent know how much the property is worth and what letting value can be achieved?

[Richlist]

Speculative investment is best:-

* Left to people who can afford to loose the money.

* For those who know what they are doing.

* Only if you are happy with higher risk.

Remember a fool and their money.......etc etc

Not that I'm suggesting anyone is a fool here but there are plenty of fools that have lost everything gambling on the wrong hot potatoe.

I spent the first half of my life with virtually nothing and now I'm trying to hold onto the wealth I created in the second half. I find that everywhere I turn is someone trying to releive me of my money with the latest geatest invstment idea since the invention of the wheel.......BE carefull......not all that glitters......etc etc.

Theres nothing wrong with a little caution..

[Mortitia]

I suggest the prospective purchaser parks outside the proposed purchase at differing times of day and night - including weekends and notes all activity.

About 12 years ago I bought a one bed house in a cul -de- sac that was a bit rough - the reason being old couple opposite had a son in law who would come to visit and park outside blasting his car stereo into the street while his Mrs was inside for 2 and 3 hours at a time. Old couple died and that resolved the problem but prostitution and drugs are a bit more difficult to get rid of.

Research needed Geek.