When does it make since to invest in a war zone or does it ever make since?
It makes sense if you are willing to put up with headaches, providing the bare bones to your tenants because you know the place will get ruined, and have lots of time to spend chasing rent (or maybe you want to get Section 8 income).
I feel the same way just was wondering if anyone had any success with war zones.
One man's warzone is another person's stable or even up and coming (usually urban) neighborhood. The term is subjective. Here in NJ, if you spent all your life in upscale Short Hills and came down to University Heights section of Newark, you might think you're in a warzone. But for me or someone else who really knew the area (including Investors from all over the country who know better), they may not see it as such at all. So it depends on what you consider a 'warzone' @Jerry M. .
The real question is what return the investor wants annually and what do they want to have to go through to achieve it??
If you told me I would get an extra 2 to 3% annually dealing with the BS of war zone tenants I would say have at it and I do not want it.
If I can get close to the returns I want annually without dealing with all of that then that's what I am going for.
War zone properties tend to be cheap so appeal to newer investors with dreams of high yield to get started. They want to snowball that small capital into large capital. They are willing to deal with big problems and nightmares to get there. Many investors with time in that have large money do not want to deal with that anymore.
I am sure there are some larger investors that love that space still. It's all what flavor of real estate appeals to you.
To me a war zone is broaded up homes, bars over windows, really high crime rates, folks walking around when they should be working and gang related activities. Ect
from my experience I don't see a big purchase price difference from a working class area to a war zone. The biggest difference I see is war zone rents a very very low while in working class area you can still get a good monthly rent coming in
I totally agree with @Ibrahim Hughes some investors consider war zones as high crime, low income areas I consider those same areas gold mines!! I must admit these so called "war zones" are not for the faint at heart because you will run into problems that's a guarantee, but you also run into problems in the suburbs. If you were raised, attended grade school/college, and have family and friends in these areas where you invest it makes it a lot easier to mange and become very successful Real Estate Investor..
I always get a laugh how we brand an area a war zone!!! I never realized I grew in "IRAQ" LOL!!!
During the last 9 years I have not always been successful in these areas nor in the great suburbs no one has but, always remember-"Failure is simply the opportunity to begin again, this time more intelligently"
My current rentals are in low income(working class) areas not the burbs. To be honest I will not invest where I don't feel safe working on my investment properties. I know like everyone else does there are areas like that out there.
They are full of gold...
And rarely do we ever buy a house we would live in anyway so we should not place our personal values onto anything we buy...
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