I am looking into getting my first multifamily or low rise apartment complex. Because of my location, I have a variety of options, from smaller multifamily places in a city with low crime, larger 6-10 unit low rises in higher crime areas, or bigger 10-20 unit low rises in small towns. Which is the best option for a beginner? Is it worth getting something more risky and pawning it off on a rental company?
@Forrest Williams High crime areas is no good for anyone, unless you want to kid shot.
In saying that, some people with experience don't mined working in lower demographic areas, BUT the returns are often not as good as they look on paper.
I would do a research on the markets with the lower crime areas to see what levels of returns you can get there.
If you cant get good returns then start moving out to the sub markets, but make sure you do your market research first. also in downtown their could be some better parts then others etc.
Without knowing your market it is hard to give specific advise. perhaps go to your local Forum / Market here on BP and ask for advise about the locations.
Choosing a market is the next thing you need to do after establishing your Goals, Buying criteria and figuring out what you can afford to buy.
Personally, I would avoid high crime areas. The local market is the most important filter on what type of asset you should purchase. You are ultimately trying to attract solid renters. Better areas tend to attract a better renter base. That said, I know people who have made good money in really bad locations, but I would argue they took on a much higher risk.
Forrest: You have quite the predicament. Consider that two of the most important factors in the success of a real estate investment is location and property management. You won’t regret the smaller asset in a good location so long as you have a good management option.
Depending on your aspirations, you might consider investing alongside a professional on a much larger asset. The learning will be invaluable, and the return potential might be better than buying a personal asset.