Build On Lot Adjacent To Rental Property?
I purchased a duplex in the low/medium income level neighborhood. The property includes a spare lot next to the duplex. Houses range from 75-105k in this area. A friend is trying to convince me to have a approx. 1500 sq ft home built on that site. He claims that the house could fetch 129-140 k. He claims that the house would cost approx 80-85 k to build, leaving me with a net profit of approx 45-55 k. The homes in this area are 65-100 year old homes. Has anyone had any expirience with this type of a situation? Any feedback is greatly appreciated!!!
Anyone?
Do your own research!
Check with your county office re zoning etc?
Talk with the planning office to see if you can actually do that first.
If so then why not?
Or can you extend you duplex to earn more cashflow? Parking garages etc are a good profit maker.
Just my pennies worth.
My opinion, I would not want to have to try to sell a 140K house in a 105K neighborhood. Appraisers look to the neighborhood for comps. You'll have something unusual and possibly hard to move. It probably won't appreciate at the same rate as the same house in a neighborhood with like sq. footage, type, etc. You can build 'em all day with great built in equity, but you have to get the appraisal figure you want, and then you have to move them.
Good Luck,
Terry