Los Angeles daily herald., 1886-12-12


don, according to the 81. James Ga
sette, we get the following:
During four days of last week sales
were held at the Auction Mart, under
the direction of the Court OF Chancery,
of 260 leasehold houses, producing
about $500 per annum, situated at
Bethnal Green and Hackney road.
These were divided into 100 lots, and
were sold for e51 ,S42. Improved
leasehold ground rents, amounting
to ellis per annum, realized el7,-
925. A freehold house on High
street, Shoreditch, let at gl20 per
annum, sold for e2950; and free
hold ground rent OF e20, secured on
houses at Kingsland, realized $3.50.
There was a large attendance on each
day, and the competition for many
OF the properties was very keen. The
tenants were in many instances the
purchasers. The total amount real
lied was 973,567.
To get at comparison it is neces'
sary to compute on what term pur'
chase these sales were made. That
is how many years will it take for the
rents to pay the investment back
Divide 81, ,s42 by $500 gives fraction
over g. treating the next lot in the
same way gives dividend OF l6; the
next results in little over 244. The
rate of interest in London is about
three per cent. At that rate it takes
331s years for money to earn itself in
interest. With us the price of money
is about ten per cent, or it will take
a dollar ten years to earn a dollar in
interest. By this rule, our property
should sell at less than one-third the
price OF London realty. The rule
here should be five to eight years
purchase price. That will be found
TO be above the rule generally in prac-
tice here. In buying improved prop
erty the purchaser will seek for what
will pay ten to twelve per cent.
That is an eight to ten year pur-
chase. 1t will appear then that there
is a very wide margin in favor OF Los
Angeles property. In other words,
there is room for it to double in price
or fall off 80 per cent. in rents to re-
duce it to the English level OF price.
For another comparison, take st.
Paul, Minnesota. The choicest busi-
ness property there is worth about
$4,000 front foot, and the best resi-
dence lots sell at 500 foot and up
wards to probably $150. In tfis city
very nice residence lots are to be had
in choice locations for $1,000 to $500.
These lots are fifty to sixty feet front,
and therefore range at $40 to $50 a
foot front. There is, perhaps, no
residence property without prospect
OF coming to be available for busi-
ness purposes held at about $50 per
foot. The rates of interest in the
two cities is about the same, there be-
ing a little margin in our favor.
Here is limit of increase for our
property of so to 100 per cent.
As to distance from the center OF
population, residence property in st.
Paul extends back to a distance OF
fully three miles. The property sell
ing at 800 per foot and upwards is
on the two-mile circle and beyond.
1t is only twenty-five years since We
remember st. Paul as a city OF 10000
people, with a railroad just secured
to her.
Los Angeles is growing with at
least twice the pace st. Paul can
boast at her very best. She has now
four or five times the population of
the hyperborean city of the early six
ties-quite as many inhabitants as
the Minnesota town had into the sew
enties. In another decade the semi
tropic metropolis is more than likely
to outstrip her northern sister. Places
which now seem far removed from
the postoffice, plaza and courthouse
will then appear near by comparison.