DHS homes opposite - cancel purchase contract?

[GreenGoblin]

Hi all

We put an offer in today on a house in a densely-packed suburb (newer suburb). Our offer was accepted, but we still have 3 days cooling off period. We've subsequently discovered that the two homes opposite 'our' house and its neighbour are Department of Human Services (DHS) homes. They're used as transitory accommodation (so new people there every few months). According to the neighbour on 'our' side of the road, they've had a string of 'difficult tenants'. One woman trashed the DHS home, another would sit outside and drink most of the day, and another hooked up again with her ex and had noisy fights with him outside the home.

Apart from this, we like the house and the area, but are concerned that two DHS homes opposite will retard 'our' property's growth and could mean a higher turnover of tenants for us (due to 'problem' DHS tenants across the road).

Should we break the contract (during our cooling off period) or am I worrying too much? I'd appreciate your thoughts on this.

Cheers,
GreenGoblin

 

[vincenzo]

That is a significant negative point I think, but maybe there are enough positive things about the deal to still make it good?

You could give us a list of pros and cons, and maybe even tell us more about it, like what area it's in, size and type of property, etc, so others will probably add to the list of pros and cons.

 

[Kristine..]

Together with our children and their friends we have seven houses leased to Office of Housing.

Over the years there has been one tenant who caused problems, and since he has been replaced we haven't heard about any of the properties at all.

One of my houses is used as 90 Day Transitional Housing, and seems to be empty more often than not.

As landlords, we appreciate being able to 'give back' and leasing to the Office of Housing pleases our sense of social justice. However, we were not best pleased while the chap with the serious problems was in situ as he did cause nuisance to the other owners and tenants in the block. It was an inappropriate placement and he should not have been put into a multi-unit property in the first place.

Apparently the young mother who is there now is well liked by all so the situation has been resolved.

Social housing is part of the Not In My Backyard syndrome. We all want to know that, should we need it, Public Housing will be available. There, but for the Grace of God, go I.

However, you are making a considerable financial and emotional investment in the house. Only you know what your risk tolerance is. Keep in mind that most Office of Housing leases are for three years. Not all leases are renewed as the Department's needs change over time. One of 'our' houses is not being renewed as the Department considers it no longer suitable for social housing.

You may be blessed with great owner occupiers as neighbours, or owner occupiers which are all-time pains in the neck. It is in many cases the 'luck of the draw' and as you are buying into a high density area you will find the behaviour, and expectation of behaviour, is quite different to buying in a standard residential low density area. In my experience, people mind their own business more in a high density area and have a higher tolerance of their neighbours than in low density areas.

About ten years ago I was selling apartments and town houses in a high density area and was astounded how everybody dried their clothes on the balconies and would sit outside in their pyjamas in full view. Everybody had selective blindness and pretended that they didn't see. Many people had bbq on their balconies and would walk about and talk without a care that everybody else could see and hear them. This was a high priced area and people behaved more like Europeans than Australians - ever been to the Netherlands? Nobody draws their curtains and you can walk past and see clear into the houses at people eating their dinners or watching TV, and people have conversations through their windows with passersby!

Goblin, you could not buy this house, and buy another you like less, and find that you have then bought next to the neighbours from hell!

There are no guarantees so you must make your own decisions based on the information to hand, on the day.

Good luck with whatever you decide

Cheers
Kristine

 

[GreenGoblin]

Kristine, thank you for your detailed and rational argument. The two houses opposite ours are owned by DHS and used for 90 Day Transitional Housing (as you put it). Whilst one of the current set of occupants there are pleasant, we were told that there had been a string of 'problem' occupants prior to this.

The rest of the street is nice; it's just the end of our court that has the two homes opposite. Obviously it's not our house that's a DHS house, but I did wonder what other people thought about proceeding with the purchase.

 

[GreenGoblin]

Anyone else have any views on this - how much are DHS homes likely to impact the value of the property and tenant turnover for us?

Thanks,
GreenGoblin

 

[INVSTOR]

It does devalue an area. I get put off from locations as you've mentioned and I know tenants do to. Area's do get a bad name and tenants get picky about living in places with a bad name. Unless there is a severe shortage of properties to rent there could be longer vacancies for your property. I would do lots of visits to the area yourself and check it out further.

 

[Kristine..]

Hi Invstor

I would be interested to see your statistical data supporting your absolute statements that wherever there is social housing the area is devalued.

Considering that there is social housing in towers at Docklands, Port Melbourne and other prestigious areas I think your absolute statement is just your opinion.

I would also ask the source of your information regarding tenants getting picky and that therefore a property is likely to remain vacant or be very hard to let. I think that you are again expressing an opinion as fact.

As mentioned, and if 'our' seven properties are taken as a guide, to the best of my knowledge property values have not suffered because of our decision to lease property to the Office of Housing and none of the adjoining or neighbouring properties have suffered loss of value or loss of tenants because of this.


As with all things, we must be vigilant that we do not say demeaning things about other people. It is easy to think that all people living in social housing are the scum of the earth.

That could be you, or me, at any time. Think it can't happen?

The worst tenants we have had have been private tenants - one who deliberately stopped paying to spite my Daughter who was 19 at the time, but the tenant was jealous and thought that she would teach my Daughter a lesson, the others were 'highly recommended' by the Agency and they simply abandoned my property, leaving all doors and windows open, just because they could.

With regards to 'picky' tenants, goodness gracious me. Is there a Tenant's Telegraph? I live in a court of about 9 houses. Would I know whether they are all owner occupied, privately rented or leased to the Office of Housing?

Would I care, and is it any business of mine?


We must be careful that our prejudices do not cloud our rational judgement.


I happen to think that being in need of housing does not make us a bad person.

But then again, I could be wrong.

Cheers
Kristine

 

[INVSTOR]

My opinion is based on my, and my tenants experiences and comments. I guess every DHS house could have a differnet history and positive or negative experience, but if the neighbours are trying to warn you it would be worth considering if it were true. That's why I recommended them checking out the area themselves. I did have a neighbour of a new rental property though who was telling prospective tenants that the street was really bad and had heaps of problems. Turned out she wanted to rent my property. So again check out yourself at various times of the day.

 

[RedCat]

Why not try to find out who actually owns the property used by DHS? Maybe they're just normal PI's and when they sell they will sell to an interested buyer, which means the house stops becoming DHS.

 

[GreenGoblin]

Thanks for the further comments and suggestions. The suburb itself has a good name (middle-class suburb) and isn't classified as a commission-housing suburb. I suppose every suburb has better and worse streets, but in the current market, things are selling very quickly.

One of the downsides is that the surrounding streetscape isn't as nice - the two DHS houses opposite don't have fences nor any gardens outside the front of the houses.

I'll ring the local police station and ask whether they've had a higher rate of crime / incidents reported in the street than for the remainder of the suburb. Kristine - I fully take your points on board and am not judging those who need DHS assistance (not that you implied I was). As I said, I just wanted to gauge other people's viewpoints, so thank you all for your comments.

As we're still within our cooling off period - further comments welcome...

 

[Luv2Travel]

As we're still within our cooling off period - further comments welcome...

Me personally, unless you're getting it for a good price (i.e. discounted due to the neighbors) I wouldn't buy for investment. To live in, would never even consider it. I guess as a tenant, they may not be aware of it, but if they are problem neighbors then you can probably expect a high turnover of tenants. I had friends who lived next door to housing commission and it became their worst nightmare.

 

[allblack]

Just sold our house which was next to a Homeswest house (DHS). A lot of people we had through open homes asked where the Homeswest houses were in the street. When they were advised one was next door they dismissed our property from there search. Therefore this did impact on the number of people who would potentially buy our property and ultimately impacted on our sale price. Also there is an area of the same suburb that has no Homeswest housing in it and prices in this area are approx 50k more because of this.

 

[Ausprop]

run a mile