Is Buying Stigmatized Properties a Worthwhile Investment?

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Stigmatized properties are those that have a negative connotation attached to them, such as being the site of a murder or suicide, or having a notorious previous owner. These properties can be difficult to sell and often come with a discounted price tag. But is it worth it to invest in stigmatized property?

An Example

The Bugsy Siegel murder house in Beverly Hills is currently up for sale by its owners, Fiona Schalom and Joel Aronowitz, MD. Perched atop picturesque North Linden Drive stands a magnificent Spanish Colonial-style mansion, the awe-inspiring asking price for which is a staggering $16.995 million. This property is a prime example of a stigmatized property, as it was the site of a notorious mobster’s murder. While some buyers are certainly interested in owning a piece of morbid Hollywood history, others want nothing to do with the house. And this doesn’t just apply to celebrity homes. In fact, many websites warn people about infamous crimes committed on seemingly unassuming properties.

Things to Consider

When considering whether or not to invest in stigmatized property, it is important to consider the potential risks and rewards. On the one hand, these properties may be available at a discounted price, which could make them attractive to investors looking for a bargain. However, there are also potential risks associated with investing in stigmatized property. For example, buyers may be put off by the stigma attached to the property, making it difficult to sell in the future. Additionally, some states require sellers to disclose any stigmas associated with the property, such as a death or crime, which could further reduce its value.

It is also important to consider the potential long-term effects of investing in stigmatized property. While the stigma may lessen over time, it is possible that it could remain attached to the property for years to come. This could make it difficult to sell in the future, even if the stigma has lessened. Additionally, it is possible that the stigma could have a negative effect on the surrounding neighborhood, reducing the value of other properties in the area.

Bottom Line

It all boils down to a personal choice: those who are unafraid of the potential risks of a stigmatized property may reap great rewards, while those more risk-averse may opt to steer clear. It is important to do your research and weigh the pros and cons before making a decision.


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