Quality tenant pool

2 Replies

When buying real estate, does it worth it to spend more capital to buy at a higher end middle class area? Would it yield better tenant pool? I live in Houston Tx and I am thinking about buying rental in Katy or heights area or somewhere in good school district. Thank you for your input.

Agnes,

Good and bad tenants can be found in any neighborhood.  A higher end or middle class neighbor may yield better tenants % wise overall but screening is still very important.   Also, typically in those neighborhoods you give up some cash flow.   It all depends on your risk appetite and investment strategy.

@Agnes Lai I am no expert in this but my formula is school district, neighborhood, no flood plain and close to where I live, after narrowing the search to the criteria obviously numbers should make sense. Good neighborhood and school should typically attract better tenants, I think since they care about living in the nicer area with better schools, also should keep in mind that doesn't mean that anyone showed up as tenant is going to be a good one even if they are willing to pay higher rents, which means you have to do your due diligence. I can tell a story of a tenant as our neighbor in class "A" community that basically trashed the house and left thousands of dollars worth of damage behind which the landlord had to fix, neighbors almost had monthly complaints to HOA or landlord about them.

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