The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1906-09-29
, IMPROVED AND UNIMPROyED.
; While Building Brings Income I
: 1t Is the Land After All That {
Increases In Value. 9

!" {" . o 3 o . O o 8 . 8 9 9 o o o o
Grand Forks real estate dealers
often wonder why banks and note
buyers make difference when buy
ing real estate notes on improved and
unimprOved property. even when the
makers of the notes are equally good
on the same person, and where an
equal proportion of the cost price
has been paid in cash. When asked
why this is done, the buyers almost
always give the same reason, viz:
that the improved property produces
an income, while the vacant property
does not.
Is this reason good one? We think
not. 1t is true that the improved
property produces an income, but
this income does not go to the buyer
of the notes on the property; on the
contrary, it is always used by the
owner OF the property as fast as it
is collected, often to the neglect of
keeping the property in proper re-
pair, or the payment of the taxes and
insurance. If the improvements
should burn down. the note holder
is protected by the insurance policy,
and if the premium has not been paid
or the company is in default,he must
finally look to the value of the ground
alone; or If they are destroyed by
storms, against which not one house
in hundred is insured. then again
the land is looked to as the sole Sc
curity Houses do not increase in
value. On the contrary, from the day
house is finished there is certain
deterioration the breaking of glass,
V@nvy T.
door, etc.
1t is the land alone which increases
in value. Now, in buying notes on
vacant property, the investor in these
deferred notes. knowing that vacant
land in cities and their suburbs gen.
eral produces no income. look to it's
situation, the price paid for 1.-THE SOL
vency and character of the signer of
the notes and his ability and prompt
ness in paying the amount paid in cash
ETC., with the result that he is much
more careful about his investments.
Good paper on vacant property is
as promptly met as good paper on
improved prOperty-perhaps more so
if there is Il observation-disclosures the
debtor knows that he must meet his
notes from other sources than the lots.
or land securing the notes, and con-
sequently he makes his arrangements,
accordingly. In a growing city real
estate is constantly enhancing in
value, and it depends largely upon
the location of the vacant property
how much or how rapidly the proper
ty secured by the notes will advance
in value. From any well-posted real
estate agents the intending investor
can learn the reasonable cash value of
the vacant property In question. The
remaining question to be decided BY
the investor then is. is the maker of
the notes a prudent buyer, and will
he be able to take up his notes when
due? This Is an important considera-
ton. because he may not be able to
meet his notes when due, and legal
proceedings may be necessary to COL
lect them. This is equally true, how
ever. of improved property.
II the notes given fer the deferred
payments on the vacant property are
signed by solvent parties, who are
also prompt payers land some rich
men are not prompt in meeting their
obllsation) and the property is full
worth In cash the amount of the notes
at public auction. wherein does the
banker or the dealer in notes run any
risk that he does not run in buying
notes on improved property?
The position is often assumed, but
it Is Illogical. A gentleman who has
dealt In notes of all kinds, and who
has had years Of experience, says
that he has had far less trouble with
notes on vacant property than with
notes given for improved property;
that the buyer of the vacant property
understands that he is to meet his