Expert: Hans Weber, Licensed Broker Associate - 11/3/2005

Question
Hi,

First thank you for reading this email.

I found the property and I really was about to buy it for the investment purpose. It's a tenant occupied duplex condo at 290K. (about 1600 sqf) It's in Southern California desert near Palmspring and is very developing. The town is new. A lot of big business names like Startbucks, Walmart, McDonald, Vons, Del Taco etc. are RIGHT ACROSS the street. And more businesses are under construction including a car dealership. I know Walmart and 99c store kind of give you an idea that this is a low income area but it's heavily white populated and I saw a great potential to profit in the near future... UNTIL I found out that right behind  these businesses on the vacant land there is an AIRPORT under construction. I couldn't notice it when I visited there last weekend because there was nothing but some fence(must have just begun the construction). I just found out about it through some online research. Of course I will confirm the info, although it's realiable. Anyways, assuming that the airport will be built, I wonder if this will hurt as far as the value of the property is concerned. Tenants are currently contracted month by month. So I am worried that they might leave as soon as they realize that it's too noisy. I heard the value of the property near the airport goes down fast too. But at the same time this is a booming area and maybe it'll become a center of the city that everything around it might go hot. Should I, in your opinion buy the property or not? It seems like a small local airport. I am very disappointed because I thought I finally got a good deal. Seller agent of course didn't tell me. Now I think I know why the property is under market value according to them.

Thanks very much for reading.

Eric.

Answer
Hi Eric,

Thank you for the question.

You think the property is underpriced compared to properties in other areas?

Then the airport effect has been factored into the price already.  The airport can be a plus.  Find out what type of planes will be there and what hours of the day it will operate.  

The other area stores are all positive, bringing jobs and people to rent your apartments.

Check out some other recent sales to give you a comparison and check out the local rental market.

Hope this helps you.

Hans