Philadelphia, PA · Member since 2017 · 23 posts · 1 vote
I'm new to BP just trying to get into the flow of things. I know Buying and managing rental properties in bad neighborhoods can be a lucrative niche. Has anyone come up with a good system that has helped them master this niche. Every interested in getting into this market.
The strategy following thorough screening is to manage like they are children. You have to stay on tp of them every day and never ever give an inch. You make the rules, you inforce the rules, if you can not do that with zero compassion you are in the wrong business.
Tenants in lower class neighbourhoods hone their skills to take advantage of every possible system and landlords are just another system in their sights.
If you get good tenants obviously treat them cordially but never ever let down your guard, that is what they are waiting for you to do. And if you do you will find every tenant hates their landlord on principal.
Bottom line is if you leave your feelings at home where they belong it is hard work but well worth the money.
I'm new to BP just trying to get into the flow of things. I know Buying and managing rental properties in bad neighborhoods can be a lucrative niche. Has anyone come up with a good system that has helped them master this niche. Every interested in getting into this market.
The term Bad neighborhood is subjective. Are you talking about class C or war zone? When I think Bad neighborhood I think war zone. I would not buy in a bad neighborhood. Class C is different. For that you must do like any property and properly screen and do background checks. I think larger deposits help. Get larger than just 1 month rent. This encourages people to leave your place in good condition in hopes of getting back their deposit. Also make sure they make at least 3x the rent.
Once they become your tenant strongly enforce on time payments, late fees and file evictions when they are 2 weeks behind.
Be firm and fair but do not be taken advantage of.
@Keyoddie Walthall the key is selecting the right tenant and treating them well. Good tenants live in "bad neighborhoods," which usually comes down to prices, not crime. I have met some of the nicest people in the world who live in low rent areas of town. They don't make a lot of money and/or they have made bad choices with money, but it doesn't make them bad people.
We operate in this niche (class C, not war zone). It has very high cash flow, but also very high headache factor. It works best to self manage them, so take that into consideration, but also to who you can pass them off to to manage when you need to. We are preparing to move and it's a struggle to find PM.
I have a friend who does this in the west side of Chicago, which is a borderline warzone. He buys foreclosures, renovates, and section 8’s all of them. No late rent payments to worry about and is retiring about 20 years early because of his niche. Not sure I have the stomach for it myself, but he does very well with it.
The strategy following thorough screening is to manage like they are children. You have to stay on tp of them every day and never ever give an inch. You make the rules, you inforce the rules, if you can not do that with zero compassion you are in the wrong business.
Tenants in lower class neighbourhoods hone their skills to take advantage of every possible system and landlords are just another system in their sights.
If you get good tenants obviously treat them cordially but never ever let down your guard, that is what they are waiting for you to do. And if you do you will find every tenant hates their landlord on principal.
Bottom line is if you leave your feelings at home where they belong it is hard work but well worth the money.
There’s plenty of money to be made in the hood. I’ve done very well on rough streets, but that money is hard earned and comes with a lot of blood, sweat and tears.
I’ve done better, had more fun, and bled a whole lot less in B neighborhoods.