Tip of the Month - June 2009

Twilight Zones

Source: How to Make Money in Real Estate-3rd Edition
             McMichael-Moser (4th printing)

Twilight zone conditions will sometimes arise through the mere running down of an old residence district to which no new construction has come because of the absence of vacant lots.  It simply “wears out”.  Meanwhile, those who inhabit these old districts fail to pay enough rent to permit a Landlord to expend more than the amount required to keep roofs watertight and the plumbing in good order.  This is a wasting-away process, for houses wear out just as automobiles and personal apparel do.  

Finally, a neglected district will reach a state where it does not seem worthwhile to spend any more money on it, and there is no demand at the moment for the use of the land for other purposes.

Even if there comes a call for the use of an industrial or business development, the land is held under so many ownerships that it often becomes almost impossible to negotiate purchases at anything like fair prices.  This, then, becomes a slum and an economic sore on community life.

If an Investor is not thoroughly familiar with all of the neighboring influences that exist in any given territory, he should move cautiously at this point, circling the district several times, studying the types of residents, their buying power, the condition of their dwellings and ascertain, if possible, whether the section is subjected to blight already or seems likely to succumb to it shortly.

Tip from Crossett Real Estate Services:

It is easy to “save” a property, however, it is more difficult to “save” a neighborhood.

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This web page was updated on 05/27/2009.