There is a house I am interested in that seems to be priced well. The problem is it has a bad reputation and has been sitting on the market for quite some time do too a murder. The house seems to be in really good shape and I like the location, I will not be living in this house personally as I intend to purchase it as a rental.
my question is this. Should I take a chance and purchase this property given its bad reputation of sitting on the market for so long? I am confident I can rent this property shortly after purchasing it. My concern is the attached stigma if I ever decide I want to sell it.
I guess I am looking for some feedback or some opinions on whether or not I should pursue this property? Thanks BP Family.
It depends on the rental demand. If you are in a market where the vacancy rate is less than 5%, then it is more than likely a tenant will not care - especially if you fix up the house and make it look inviting. (First step, get ride of the chalk outline.)
Is it in a small town or a big city? In a small town where people hardly ever get murdered and everyone knows everyone else's business then people will remember the house. In a bigger city give it a little bit of time and most people will be over it.
Ha ha chalk outline!! Yeahhhh. It is in a small town which is why I feel it is getting a bad reputation. Also, am I required to disclose this to a potential tenant or buyer? I don't personally have a problem with it but then again I have never had a paranormal encounter...( spooky noises)..
@Chad O. - Disclosure laws are different per State. In AZ you would not need to disclose it, but you should ask a local agent to see what the rule is for your state. If it is a small town I would be hesitant. Even if you do not have to disclose it, the neighbhor eventually will.
Hmm, I'd be hesitant in a small town too. Locals will know what happened there. Even if they logically tell themselves that it would be ok to live in that house now, there's still the "creepiness" factor that might keep some from wanting to live in a murder scene. Only you can assess how much that is likely to be an issue.
Yes, definitely check your state and local laws about disclosure. Here in CA I believe you have to disclose a death for 5 years after the death occurred when renting or selling a residence.
Hmmm interesting feedback. I'm not going to lie, I was hoping everyone was going to go the other direction ha ha. Although it seems to be a solid deal, I think I am going to pass... I am confident I could rent it buuuttt selling would pose a problem. Even though its a great location on main street, walking distance to Anything, centrally located, etc. ( Am I talking myself into buying this?!?!) Haa Haa. Moving on..
Not to revive a dead forum, but in case anyone else comes across this, I'd like to add the standard investment caveat. Any Real Estate Deal can be a Good Deal! I only came across this posting because I am literally in the exact same position. Made an offer on a property, found out a murder occurred in the home about two years ago. The home needs about 20k. The original owners are gone (one dead, one probably in prison-See Above Explanation) and the nephew now has ownership. ARV (without a murder) is 157k. They are actually asking 155k As Is-which even according to the listing agent is hilarious. And this is a property that has been on the market for 22 days in an area where the ADOM is 4.
So all of that to say what? What is the house actually worth? Well the short answer, no one knows. Unfortunately, there has not been (to my knowledge) an actual clinical study which quantifies the financial impact of resale value in relation to a death on property. I've found a handful of articles that somewhat dance around the issue and offer a few suggestions, but three different properties is hardly a large enough sample to make generalizations.
Therefore, you ask yourself, what's a good deal? Take my example...for example. If that seller called me today and said he would sell me the property for 10k, I wouldn't bat an eye. I don't care if it's the birth place of Michael Myers. 50k? Probably Still. 100k? I'll have to do some more research.
My point being, don't walk away because the numbers don't work. That's what everyone else is going to do. Use your leverage and MAKE the numbers work.
I wish you the best and I hope you're continuing to grow in your success!
Free eBook from BiggerPockets!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing