Under valued single family

1 Reply

I am in the process of buying under valued property in an area I am extremely familiar with so I have confidence in the town.  I have been buying homes that are $45.00 - $50.00/ sq ft.  Most homes built post 1980.  I am renting these properties, but I am concerned they will continue to decrease in value, because of little economic growth within this area.   Population is 25,000 so its not a super small area, but I am buying properties that are $60,000.00 - $100,000.00 and renting them from $900.00 - $1,200.00.  I am curious if anyone has bought in a situation like this and should I continue buying all the deals I can and growing a rental portfolio or be skeptical. 

@Jordan Maroules There are a lot of folks that do really well in a small town. A lot of it is going to depend on your risk tolerance, and what your goals are. If you plan to stay in the town forever, maybe you don't mind riding the wave of values going up and down as you are only concerned about cash flow and have no plans to sell. Luckily the overall economy in NC is strong which is a plus. I would do more research on the drivers of the local economy. How quickly could the population of 25,000 collapse down to 15,000 or say 10,000? What are the major employers? Is there a major factor that employees 5,000 plus people? If so, if that plant were to shut down, that's 5,000 people no longer working, they would most likely have to move somewhere else for work.

Personally, I started 1 1/2 diversifying to different MSA just for better protection against local economies struggling.

Good luck!

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