BiggerPockets

I think you somewhat answered your own question. If you would be uncomfortable living in such a place (so would I) then that means most quality tenants would as well. The type of tenants who don't care about living in a neighborhood like that probably won't care much about your property either.

But on the other hand, If it cash flows with the 50% rule and you also are prepared to properly screen tenants plus do not mind the "lower income" areas (not war zones) then what does it matter in the end? Their money spends as well an anyone else's money, doesn't it?

If it is against zoning laws then you can always report it and the county will do the dirty work for you in stopping their work on the cars as a business.

You wont be living there, your tenant will and if they do not mind and you have guaranteed rent payments (section 8) and damage deposits, does it really matter?

Your 'nightmare' says a lot.

If your purchase price isn't low enough that you _know_ you can find tenants at a profit, or low enough that you _know_ you can sell at a profit, then move on. It's a buyer's market out there.

Myself, I'm very selective with a neighborhood, even in low-income areas. No need not to be.

With any purchase, LOCATION is very important. Even if it hits the 50% rule or any other rule, it may need to do better than the rule as you may have to accept lower rent or have higher vacancies.

I try to buy the ugliest home on the nice street and neighbors and junk in the yards matters quite a bit in my book.

Move on Bienes. You will probably overpay for it too... I am not as selective when it comes to the neighbourhood, but I am selective with the street and the houses I buy. There are big differences from one block to another where I buy. I don't usually aim at the "ugliest" one on the block because,most of the time it means too much work for not enough return...

How much of this is hidden when you use a property manager?

Sure, you need to verify that there are rentals in that sort of area, the vacancy rates, and what the rents are.... but if the cash-flow is fine is the extra hassle all on your property manager's plate? Or does it rise up and bite you?

I'm most comfortable buying houses in nice neighborhoods but, thanks to this forum, I now know that low-income areas have better cash flow. Running the numbers myself has convinced me, too. But how much hassle comes along with it?

Robert, I haven't bought a property yet, but from what I've seen so far at the REOs I've been to, one of the big risks with low income area properties is someone stealing the AC unit, or anything else they want, during vacancy periods.

Eddie, that sounds like a good idea for the condensor, especially if you can reuse the cage for different properties. The only thing is, at the house I viewed, they stole the outside condensor unit and then broke in through the back door of the house and stole the inside unit as well.

My Aunt is in the same situation. She keeps her property in tip top shape. Her house looks like something out of Better Homes and Gardens.

Unfortunately her neighbor is a mechanic and his house looks like a body shop. Needless to say, this is a BIG problem.

Personally...After seeing all the headaches my Aunt went through with her neighbor, I would walk from the deal. The last thing I need to do is spend my time playing neighborhood cop.

I hate to think what type of tenant would be ok living next to that dirt bag!