Buying several VERY cheap houses all on 1 street hoping gentrification will happen?

bouicca21

foxy-stoat wrote: »

Scratch that, I found the street you need to invest into:

https://www.rightmove.co.uk/property-for-sale/property-73829953.html
https://www.rightmove.co.uk/property-for-sale/property-73830094.html
https://www.rightmove.co.uk/property-for-sale/property-73937887.html


Theres 3

I thought about it but wasn’t sure whether I’d need a whippet whilst waiting for the gentrification to take place, besides the buyer’s premium at £5000 plus VAT seems just a tad steep.

steampowered

What you are describing is not investment, its gambling.

You could also just go to a casino, go to the roulette table and put your £50k deposit on red.

artyclarty

County Durham native here! This is exactly what a friend is doing! Albeit in a much nicer area than Peterlee, think value of 50k not 20k...

He has owned a house in a row of terraces for about 25 years and its an area that is about as cheap as you can get for rent. His neighbours for the most part are petty thieves, drug addicts/dealers, alcoholics and the like.

He gets on well with his neighbours and their landlords as he's a handy guy (never annoy a tradesman!) and has CCTV at the front and back of the property - the go to person for the police if there is trouble in the area.

Tenants keep trashing his neighbours property and causing antisocial behaviour and accumulating arrears. Eventually one of them had enough and evicted (legally and through court) the tenants. His neighbour offered him the property in the current trashed state and he accepted.
Win win! No idiot neighbour on one side and a nice project for him. He uses it as his business address (self employed) and pays rates on the property instead of council tax.

After 5 or so years the same happens on the other side and now he has no idiot neighbours on both sides! Again the same happened two or three more times, not adjoining and he has a nice little rental business on his hands. He is registered as a separate LTD company to his own business and vets the tenants himself and they all know he lives within walking distance if there is any trouble.

So far he has only had to deal with one s8. As soon as that happened word spread (as it does in small villages). People actually want to live in his properties because he is a good landlord.


I appear to have rambled a bit so here's the TLDR!
It can work if you:
- know the area
- live in the area
- have the money to pay CASH
- have a reputation within the local community as a good guy
- are extremely handy
- are fully accepting that you could lose money
- are confident with tax returns



But still this was not an idea that he came up with and ran with from the start. He is making his street nicer because the worst of the worst there are so bad that it is making other landlords sell up.

Its still a crummy terrace of former colliery houses on the top of a hill in the middle of nowhere with no public transport, so wouldn't say that this is gentrifying the area, just cleaning out the trash.

Crashy_Time

ritfor wrote: »

Where has this happened, successfully?

I can think of a place gentrifications have taken place that resulted in no rise.

Shoreditch.

p00hsticks

artyclarty wrote: »

I appear to have rambled a bit so here's the TLDR!
It can work if you:
- know the area
- live in the area
- have the money to pay CASH
- have a reputation within the local community as a good guy
- are extremely handy
- are fully accepting that you could lose money
- are confident with tax returns

I think the main consideration is the one I've highlighted in bold.

The problem with cheap housing as an investment is that any major works such as replacing a boiler / replacing guttering / re-roofing costs much the same for a £30k property as it does for a similar sized property in a more salubrious area costing ten times that.

Therefore for the cheaper property renovation/repairs/maintenance are a much higher % of both the property value and any potential rental income.Unless you can do much of the work yourself (and don't charge much for your labour), the need for e.g. a new boiler in a cheap house could wipe out any capital gains and rental profit for several years.