Buying a former grow-op

General rule: never buy a stigmatized house. But there are reasons when it makes sense to consider these less-than-desirable properties.

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by Romana King
March 14th, 2012

Online only.

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The listing looked good. A detached three-bedroom in one of Toronto’s older west-end, working class neighbourhoods. It was a solidly built home, with plenty of parking, and great access to stores and transit. But, buried deep within an attached report document (known as a Schedule, in realtor speak) was a single line:
“Former grow op. Remediation and air quality reports available.”

We were shocked. The family home—complete with portraits and memorabilia—just didn’t give the impression of a tawdry drug lab.

Even worse, many buyers are so thrown that even professional remediation and remodeling can’t dispel the stigma.

But does that mean you should avoid any houses formerly used for illegal purposes?

No.

But to take advantage of a former grow op home sale, you need to really consider how this fact will fit into your purchasing strategy.

Financing: The first hurdle to consider is whether or not you can get financing for a former grow op home. Many lenders are quite shy about providing a mortgage for a home that hasn’t been professionally remediated. That’s because grow ops can do significant damage to the structure, electrical and heating and ventilation components of a home—and this can dramatically decrease the value of the home. For that reason, consider homes that have already been professional renovated and inspected and make sure you ask, and get, paperwork that back up these claims.

Long term goal: Next, consider how long you’ll be living in the home. If you don’t plan on staying in the home for an extended period of time (say 15 to 20 years) you may want to look for something else. That’s because, by law, you must disclose the fact that the home was a former grow up. If you buy now at a discount, you will be on the other end when it comes time to sell.

However, one way to avoid the stigma discount is to allow time to wash away the appearance of any dangers. That doesn’t mean you can omit the fact that a home was a former grow op, but to a buyer finding out that a home was a grow op 20 years ago, vs. two years ago, will go a long way to mitigating the impact of a stigma on your sale price.

Love the area, take the loss: Finally, the only other reason to consider a former grow op home is because you absolutely love, but can’t afford, to buy into the area. The fact that the home was a former grow op will reduce the price. Just remember that when you go to sell, the same will apply to your sale price.

15 comments on “Buying a former grow-op

  1. One also must consider insurance coverage, you may pay higher premiums for a former grow-op if your insurer will even cover you.

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  2. I have bought and sold a former grow op and would never do it again. The stigma is a challenge and will exclude 95% of the buyers and only 1% of the remaining buyers will even seriously consider it. Even with professional remediation. Insurance is a hassle, as per Janet's comment, about two to three times the standard rate. Run from it unless you plan to live in it until you die.

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    • Did you manage to sell it though? And how was that compared to what you bought it for?

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  3. many other possible problems including health (mold), fire risk, etc, attendances by former drug customers ,…

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  4. Really nice article. I like it. Thank you for sharing.

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  5. My biggest concern would be former customers coming to the house, or someone targeting it for a home invasion robbery thinking it was still a drug house and had money/drugs/weapons inside.

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  6. Beenthere didthat, thanks for sharing your experience. When my husband and I moved from Ontario to BC, we saw a couple of former grow op houses. Our agent and the vendor's agent assured us (of course) that unlike in Ontario, former grow ops were not the kiss of death in BC, were a great value, and the neighbours will love us. We passed–we didn't have enough local real estate knowledge to assess the risk/benefit and suspected they saw us as the out of town rubes.

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  7. i just bought a house that now just found out was used to grow drugs the estate agent never told me home buyers report never said anything i new it needed some diy work but did not know the full damage to property any advice

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  8. I've never purchased any properties so far in my life but looking forward to have one. This post mentioned information will be helpful for me to consider best house among various choices. Thanks.

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  9. Very interesting breakdown, indeed. It’s nice to have such information available in one location and some ideas for new and different directions to take to help one stand out.

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  10. We looked at buying a house. Fell in love with it and once we fell in love with it the Realtor casually mentioned it was a grow op. He said he only had 40 – 50 seedlings in the house then he would move them to the yard so it's not a big deal. BS it is a big deal! I call 10 insurance companies (major ones) not one of them would insure it. I also spoke to a broker who also had no luck finding anyone to insure it. So we offered the guy the value of the land. He laughed at us. But we would have to take the house down and rebuild basically. He still believes he will get full value for the house and his dumb realtor is encouraging him.

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  11. There no requirement of license, but the majority of such type of care keeps licenses certificates in social or nursing work fields and they also obtain graduate degrees in their particular fields.

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  12. I'm very happy to read this. This is the kind of info that desires to be given and not the accidental misinformation that is at the other blogs. realise your distributing this best doc.

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  13. This is very wrong. Have bought two former grow homes for the purpose of renovation and resell. No issues at all! Bought one for 272k. One for 234k.
    Sold one for 474k. one for 428k. Both had about 80-90k in work done and needed to pass massive inspections. Made about 190k in three months. What is wrong with that? No issues getting insurance at all! These are not current grow homes! Been renovated and passed inspections. Not like there was a murder or death in the house. Not haunted. And your realtor would have HAD to tell you that your house was a former grow home. If he did not you can quawsh the sale of the house! Will take some legal time ,but you are able to do so! Everything in the house must be done according to health inspections, which means alot of work…No kidding! But you will NOT find mold,fire hazards……in a renovated grow house…Kinda silly if you think so. This is a GREAT way to make some extra money or get a great deal on a home that you want to renovate how YOU want. Why this is such a big deal in ontatrio i have no idea. Alberta and BC…..This is just fine! People are being led to believe this so that the other persons can grab that house and make some money. Makes no sense other wise! Been there and done that, and will do it again and again when opportunity knocks!

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