We own a home and raise our daughter in a residential neighborhood and for the 6 years since we moved in there was a very nice family renting the SFH next door.
Last summer the owner of the place (who's not the sharpest tool in the shed) got into a financial pinch, decided to sell it and basically told our wonderful neighbors to get out and didn't give them a chance to renew their lease. The house sat empty and on the market for over 6 months while he lowered the price multiple times. About two weeks ago he began renting the place out again to some unsavory characters, turns out it's the owner's brother in law and his ladyfriend.
On their first night there the fire truck had to come and smoke was billowing out of the windows. They keep the lights on round the clock, coming and going all night long making noise in our gangway. I've been around the block when it comes to illicit materials and looking at their faces, their habits and the nature of the people they have coming to "visit" it is pretty clear to me they are meth heads and maybe even dealers. A lot of their "visitors" bang loudly on the doors and yell and scream to get in and just last night around 2am we were woken up by the main renter himself banging and trying to break in through his own window because he had "locked himself out".
We have friends that are cops and were able to find out that this guy has a record that's a mile long including things like narcotic possession, domestic battery and breaking into his neighbors garage to steal shit. Needless to say we are pretty irked by the whole situation.
The for sale sign is still up so I think the owner is just trying to get some income out of the place by renting it to them while looking for a buyer, but you never know, he could get tired of trying to sell it and we could get stuck with these people mere feet from our home.
I've seen dozens of suitors come look at the place, inside and out, and leave within 10 minutes. I've been inside it many times and can confirm, its a bit of a mess. It's over 100 years old, the layout is awkward and it needs a ton of work like new siding, roofing and more.
I'm toying with the idea of making the owner a lowball offer to buy it but I am concerned about the risks involved, namely owning two properties right next to each other (no diversification) and taking on the responsibility of an additional mortgage payment, property taxes and responsibility to fix and maintain a whole second home. I also know that investment property mortgage rates are typically higher than that of a home you live in and you also need to put down a minimum payment of 10%.
Granted, we have some money saved and we could do it and if they accept my lowball offer (I am honestly thinking a max of 40% under his asking price) it could turn out to be a great investment opportunity. We live in a good location with great public school, shopping and transit options so finding renters shouldn't be a huge problem and we could control who lives next door and if he were to accept my (admittedly very low offer) we could probably rent it for at least 60-80% more than what the monthly mortgage payment would be.
I'd love to get PF's opinion on this whole situation. Horrible idea? Brilliant opportunity?