Would you just buy a property for a rental ROI?

Question

Should i buy properties with no equity just rental income. I usually get grand slams with a mixture of both but looking at a nice house in a really crappy neighborhood. It would cashflow and is huge and big has potential Purchase would be $16,000 buying as is. 5 bedroom 2.5 baths sold as is needs work and cleaned out. thinking $10-15k repairs to make it rent.

Cara Lonsdale · Answer

Be prepared to get D and F Tenants if you are looking at D and F properties.

Hope for long term Tenants because you will need to rehab the property after many of these kinds of turnovers. Expect broken cabinet doors/hinges, holes in walls, broken window treatments, stained carpets, and walls that need complete repaint.

Sometimes the appeal of cash flowing properties like these are quickly squashed because of rehab expenses involved. So, be careful and make sure you triple your repair budget/rehab expense.

Don't get me wrong, if done right, these can be cash cows! However, just make sure you prepare properly.

Jeremy Taggart · Answer

@Joshua D. Crappy neighborhoods are usually just cash flow plays with little equity. Can be very profitable but have to be willing to deal with the probable headaches and be cut out for managing in those neighborhoods, unless you are hiring property management of course. Idk if I would base a portfolio on them, but adding one or two to the mix might not be a bad idea if you are up for it!!

Would you just buy a property for a rental ROI?

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