BiggerPockets

I was wondering what was everyone thoughts about rental properties in dilapidated areas was. Is it worth having all the numbers work out, i.e. 2% rule and house bought @ 70% of value etc., vs. the appreciation of the home and possible resale of the home, i.e. no one will buy the home because of the area it's in.

I know that having cash flow is the most important thing with rentals but I'd like to hear everyones thoughts. Thanks

Cash flow is KING with rentals. However, even though the numbers look good on a piece of paper, it is VERY difficult to make money in a warzone. If bullets fly, I won't buy!

Mike

I know its definitely apart of the game dealing with tenants, but I just located some properties, in bad areas, that if I can get the asking price down I can make cash flow.

BTW I'm using the info from MikeOH book and info learned here regarding rental properties so a big heads up to him and this board because I will never look at a rental property the way I did before, thank you all.

I agree with you to an extent but the potential numbers keep calling me, I will let everyone knows once the RE agent contacts me.

If you're going to buy in a bad neighborhood, be prepared! You're going to deal with drug-dealers, drug users, plenty of evictions and a TON of headaches. My little experiment in a bad neighborhood has been kicking my ass for the past few months and I'm just hoping to bail out ASAP! (See my post on donating property to charity).

If you've got the constitution for it and don't mind the hassles (take a middle income property and increase the problems 100-fold), then I say go for it. If you want to hear some war stories, I've got plenty for you.

In a bad neighborhood, some extra attention is required.

1) You must do very comprehensive checks on tenants. I have not heard of people doing this, but I think it would be great to run checks on current tenants before making the deal. Don't take the seller's word for it!

2) You must have very specific rules for tenants. When I started out, my rules were not so comprehensive, and quickly became more so. Trash pickup is a particular concern.

3) You must make more frequent visits.

4) You must have clearly defined eviction policies and move on a dime to begin the eviction process.

I have an article on " The most dangerous tenant" on some article sites - check it out.

Sorry to hear about your like with bad rental hopefully it will work out.

I'm still trying to decide about this potential property, I'm going to check it out as well as other properties that are in " unfavorable areas" over the weekend. Hopefully I can get a better reading of things.

Hey PropertyMaster could your PM the link for your articles. Thanks everyone

On a variety of web sites under my real name, Brendan O'Brien. The most popular article site is probably ezinearticles.com.

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Still waiting for the RE agent to call me, so looks like I have to go on offense and try to track the listing agent down.

Not to change subjects but I think its great when you call an RE agent and you get no response what so ever, and I know RE agents get a million calls and have to weed through the junk but come on not even one call back or email!

This was the EXACT comment i was going to make! If you can find a property manager you trust, and who is already working in those areas, lower income might be a good way to go. Hand them off to an expert where management IS their business, and save yourself the headache. That way you can focus more on the deals and less on the day to day.