There’s a lot to be said for buying ‘ugly’ properties. If you know that the area or street is well respected, buying an unattractive property and renovating it is a good idea – certainly better than investing in the nicest looking properties if you want to make money. There is likely to be a ceiling price for the area and whatever you might do to ‘improve’ an already very up together property, may have little effect on its end valuation. 

But what if the ‘ugly’ property is actually a bit of a ‘rose between the thorns’ – as was the case with a lot in Stoke that I filmed at recently. To explain, this ugly ducking was a terraced house sandwiched between two commercial properties. Understandably, the house ‘seemed cheap’ compared to other similar homes in the area and there’s a good reason why.

Residential property that is surrounded by commercial buildings – even if the area is predominately residential  - is going to have issues. So before, snapping up what seems to be a bargain property, any buyer should consider the following:

1. You would need to understand what business is carried out in the commercial properties. The importance of visiting the property during varying times of day and week cannot be understated. Whilst there may be restrictions on the nature of business that can be operated from the commercial units, given their proximity to homes, there may be increased traffic, noise pollution and smells generated as a result of the business activities. Some enquiries into the business itself may help you to understand:
   1. Whether or not deliveries are made and if so, how often and when. Large lorries arriving during the early hours could be really annoying.
   2. If the business actually trades from the premises i.e. they have customers coming there. If so, this will have an impact on traffic volumes, car parking,  security and general disturbance.
   3. Does the business have any manufacturing processes going on? If so, does this generate any particular noises or smells?
   4. What are the operating hours of the business? Some businesses run through the night and even if there are no particular smells or noises generated, at the very least you’d have lights on in the buildings which may bother you.
2. The resale market is likely to be limited. Having your home next to a commercial property (however unobtrusive it might be) is not going to appeal to everyone and so houses of this type will always trade at a price below comparables that have residential neighbours.
3. Similarly, if you are buying to rent, the other plus points of the property will have to outweigh the downside of the commercial neighbours. Students for example, may not be so concerned with the fact that the views from the back are onto an industrial unit – but only if the property itself serves them well in terms of transport links, proximity to the university, standard of accommodation and facilities such as internet access. 
4. Importantly, in the age of tighter lending criteria, mortgage companies may take a very dim view indeed on a house which is surrounded by commercial properties – to the point that they may deem the home a commercial unit itself and therefore refuse to offer a mortgage at all. This will have an affect of the resale market and price of the property.
5. If you plan to modify or extend the property, you may find that planners take a more relaxed view towards alterations than if you are in a purely residential street. However, you should balance the cost of extending the property with the likely increase in value. Properties like this will have a ceiling price because of the unusual position.