Townhome vs SF in B- neighborhood?

Question

Hi BP!

Looking for any advice as we’re looking to make our first rental purchase. We’re targeting Smyrna, GA just outside of Atlanta and looking at either a SFR at a higher price point and less monthly cash flow vs a townhome where we can buy for much less, add value through a facelift, and see better monthly cash flow.

What are your thoughts on investing in a townhome for a long-term buy and hold strategy? We’re classifying the neighborhood as a B-.

Thanks all!

Price Pearson · Answer

@Rebecca Cardona

Generally speaking, townhomes are slow to appreciate in the Smyrna area.  Not to say they are bad investment, just letting you know.  Perhaps that is ok with your REI strategy.  Also, be mindful to the HOA fees, as they generally will suck up some of your potential profits.

Account Closed · Answer

@Rebecca Cardona, I have 3 units side by side and the one thing I dislike the most is if one of the residents is dirty and attracts rodents or bugs, it impact all units. So, you might have the cleanliest resident but if neighbors are not then their problems become yours.

Sometimes regardless of the cleanliness,  rodents/squirrels move into (attic/walls) one of the units and the wildlife control will need to treat all adjacent for a complete treatment.