What would you do... when something like this opens up next door...

Hello,

What would you do in this situation that we found ourselves in-

Our investment property is in a suburb close to Sydney CBD that has been experiencing very good capital growth in recent years. It is currently vacant and needs major repairs. We were about to embark on renovations with a view to putting new tenants.

However, we recently found out that the place next door is going to be turned into a "centre/?place of worship"which will offer support/spiritual counselling services for juveniles with issues. I don't want to get into the details of what type of religion/faith/race, nor the location, but let's just say that these type of centres in other locations have on occasion attracted types open to "radicalisation".

We have concerns as to the type of people this might attract to the area and the effect it will have on our rental income and ability to sell the property in the future. Any thoughts as to what this might do to property values and rental income?

Would you sell? Hold onto the property and see what happens? Continue on with plans to renovate and put new tenants in?

 

^ ^ this option.

 

Hi @Mel77

It sounds like your property might be on a relatively main road... is there perhaps an opportunity for you to seek a commercial operating permit for your property so that it an be utilised for something other than residential ?

 

i personally would not sell but either way i think it has to be either sell or continue on with renos because inaction is only going to hurt you financially imo, especially since you say it is in need of major repairs.

is it worth approaching them and seeing if they would be interested in expanding and buying your site? how far along are their plans?

 

I don't see an issue with it. It may increase desirability of that certain demographic.
Just focus at the numbers.
Yield, costs for improvement and equity gain etc.

The rest is just white noise and distractions.
Unless you're going to use it as a PPOR at some point I'd carry on.

 

This for me.

If a potentially more lucrative land use was approved next door, I'd be looking into the potential for my lot to be also approved and converted to a higher and better use...

 

Thanks- alot to think about.... not sure what other use we could have for ours (other than residential). Perhaps we could approach them and see what their plans are in the future- they may want to buy adjacent properties? We don't intend on using it as PPOR in the future.

I still think if it's kept as a rental, a potential renter would be concerned about juvenile delinquents hanging out the front. Wouldn't it almost be the same as having a rental next door to a housing commission- people always tell me never buy an investment property next door to housing commission. Is there some truth in that - i.e that it will affect your own property price??

 

Sell your joint to them for extra carparking space...might save you a stack of coin on the renos....go and ask them.

Or; they may want to rent it as is for some of their worshippers to use for whatever.

 

And then if that doesn't work, maybe find out what town planner they used for their DA application, and go speak to them/hire them to investigate what might be permitted or approved for your lot.

 

Bit off topic but if you push forward with your reno\repairs etc it might be an idea to try and get tenants in and then do the work so more is claimable on tax!!!

 

thankyou... didn't know about getting in tenants first to be able to claim more on the renos...

 

I would sell. There are other opportunities out there if you think capital gain for the property is going to be low, then sell and buy some where with better growth.

As much as investing is about making money it is also about limiting losses. Take the profit and move on.

 

These are all assumptions and speculations.
People attracted to a religious councelling service are people who are seeking change. They have not done anything to your property and probably never will.

If something does happen handle the problem specifically.
In the mean time, I personally would not be concerned at all with what other people are worshiping or doing next door.

 

sell.

 

If you are sure this will happen and the time frame is not too far away, then I would probably be looking to sell beforehand or as mentioned look into a DA.

 

True - they may not do anything to our property. They will be youth with drug, alcohol and unemployment issues going there for assistance/counselling by this particular religious group.

So do you think the average tenant would not be concerned at all about living next door to a place like that?

 

Possibly Mel,
I've had tenants complain about the next door neighbours washing.

People sometimes complain about things that are not logical.

If it becomes an issue then sell. You won't know until you actually test it.

It depends on the demographic of the market too.

 

Exercise your right to object under the LEP & DCP. Find the inconsistencies eg parking, noise, noxious odours, overshadowing or whatever sinks their boat.

 

If you have to renovate it anyway, have a chat to council about whether you can get a mixed use permit. If your property is allowed to be something that can be leased out as something that fetches more rent, then perhaps renovate to that requirement instead. For eg medical centre or physiotherapy clinic or something like that.

 

I really like @JacM's advice.

Ps. Which is a better situation. Yours or this?

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