Would it be completely unwise to buy high end real estate in an undeveloped neighborhood in Oswego? (Chicago: sales, lease)

[AuDiBelle]

That sounds like a really bad investment IMO.

[pvande55]

I wouldn't do it but if you get a fantastic price you might take the jump. And who knows, maybe Oswego will gain favor someday.

[BRU67]

Originally Posted by linicx

you need flood lights on all corners of your house, 6' fence with a remote gate at the driveway, plus a local security company to install camera and electronic keypads, on all the entrance doors into the house (including the garage), and alarms loud enough to actually be heard. It can be all set up on computers so you can go to work and watch your house. I you are lucky you can do it on your cell phone too. If you want an added measure of comfort get a pair of trained Mastiff dogs, a gaggle of geese, and decorative wrought covers for windows and all doors on the ground levee. The very last thing I would want is a sliding glass patio door because of potential security issues.

Jeez. Don't forget the barbed wire fence, the 10 hand painted wooden "no trespassing" signs, and the Unibomber beard! I'm amazed at the lengths some will go through to be away from other people. Unless gasoline prices go down below $4/gallon and stay there (unlikely), the future prospects of areas like this are probably dim.

[Vlajos]

Originally Posted by whatyousay

That sounds like a really bad investment IMO.

Yep, nothing else needs to be said.

[BRU67]

Originally Posted by Vlajos

Yep, nothing else needs to be said.

I also think a movie night featuring the 2008 film "The Strangers" is in order for this couple here. That movie made me very glad that I live "right in top of" my neighbors, if you know what I'm saying. Sometimes, that's not all bad.

[nucat78]

Originally Posted by krispro6

I was estimating $18k in property taxes, but given the schools have a lot of debt (I hear?) that could definitely increase.

I have NEVER seen school taxes go down.

[krispro6]

Oh my gosh, to clarify the house is located in a subdivision about 500 yards from a county highway with another property sitting outside the development (which presumably would be targeted first) and another property further back in the development (which is even more remote) and more homes up the road. This is not isolated wilderness. We are actually currently living about 30 minutes even further out in rural IL to be close to family and a move to Oswego would be an attempt to move closer to civilization, but still be somewhat close to family. We've looked at other houses in the Oswego/Yorkville area and we just haven't found anything we like. We are also not trying to make a killing in the real estate market by buying a house in an undeveloped area in the hopes that it will soon take off and we make a bizzillion dollars because we got in early at a low price, we just want to buy a house we love and can live in, but obviously are concerned with resale potential in the event our plans change and we have to sell. As I mentioned, the benefits of this particular subdivision is that it is smaller, more intimate (maybe 60 lots versus 200+), the lots aren't huge, but big enough (3/4 acre), they are wooded versus flat prairie land, and we like the layout of the development, which is less rambling then some of the others we looked at. There have been a number of valid points about the pitfalls of buying in such a development. The developer was clearly way out of line with the market even when this development was first conceived. There is no way these lots were ever worth $300k (even in 2006) and I doubt they are worth $90k today. But I would think there has to be some price tipping point for this particular house that would make it a viable option, it can't be worth $0 or could it be?

[krispro6]

And to further clarify my above post, all the roads in this particular subdivision have been fully paved and street lights installed, therefore, there isn't too much reconfiguration that could occur, although I suppose the lots could be made skinnier to fit more in there, but I'm not sure of the parcel map process in Oswego and whether that is possible. I really see three options, which are: 1.) this development sits as is with two homes for the foreseeable future, 2.) the building covenants currently in place requiring brick exteriors, certain sized houses, etc., are completely thrown out the door and the price of the lots drop down to whatever they can be sold for and we then have the most expensive house in the development (other than the house at the top of the hill which is in the $M range), or 3.) the housing development is slowly built out in the next 10 years with nice houses in a more reasonable $550k - $750k range (versus $950k plus range as originally contemplated). We were hoping maybe the last option might occur, but I can definitely see the problems with that thinking.

[BRU67]

Too many "ifs." There is a place called Horseshoe Casino in Hammond, Indiana where you can do this with smaller dollars. If you're in a gambling mood, give it a shot. Meanwhile, if you want to make a sound long term real estate investment, well, I think the answer is pretty clear.

You'd be speculating big time, to put it gently. The remaining lots could get turned into Section 8 housing just as soon as they could get turned into pleasant, $550-750k homes housing upscale families, IMHO. Most likely though, they will just remain vacant, with no amenities built around them and the few residents there left to shoulder the school and other local tax burdens. With high gas prices, and other macroeconomic factors pushing people towards smaller houses closer to job centers, there isn't going to be the demand for large scale developments in car dependent areas.

[nikitakolata]

You've received a lot of good responses so far. I think that, at the end of the day, it comes down to a few things. How much does the exact home you live in make or break your happiness? A house is a lot more than just an investment for many of us, but it is also a huge expense and usually the most expensive thing we ever buy. Do you see yourself being happy if your found a similar house in a more established area that you could afford?

Also, are you going to be emotionally okay with things if you know that you are not making a wise financial decision with this house? If the house is more important to you than the finances, maybe you are okay with that. In that case, the house may not be a bad purchase for you. You just have to know and be comfortable with the fact that it is probably not a good financial investment going into things. Money is just money. It can make life easier, it can make things h*ll, but it is just money. A person can make tons of money and if you're a capable person you can probably find a way to make more of it if you lose big on this house. But, if losing a lot of money is going to cause you a ton of emotional distress, it is probably just not worth it.

That is how I would think about things. Weigh the pros and cons of it and consider how it will impact you emotionally as well as financially. Having a lot of money isn't all that important if you're miserable emotionally. You have to think about how you will feel about the house in various scenarios. Will you regret the purchase if a bunch of $200,000 homes are built around you?