Pros and cons to buying two rental properties in same hood

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Pros and cons to buying two rental properties in same hood

Meredith Bailey
Roswell, GA · Member since 2016 · 2 posts · 1 vote

I already own a rental property that cash flows $450/mo. There’s a nearly identical house to mine a few houses away that will cash flow about the same if purchased for asking price. I’ll need to use equity in my other house (or my residence) for the down payment. Should I go for it?

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
6y

There's nothing wrong with staying in that neighborhood as long as it's a good area. It simplifies your drive-by inspections!

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  • Derek Jones
    Investor · Bloomington, IN · Member since 2015 · 10 posts · 5 votes
    6y

    @Meredith Bailey

    I don’t see why not! To me, it’s only a plus to have properties closer together (unless the first one is already in a bad area obviously). But yes, all things considered, pros > cons. If you feel good about it, do it!

    1Reply
  • Adam Martin
    Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    I don't see why not, I focus on specific areas and having houses close together just makes checking up on things easier.  Also if they both happen to be vacant at the same time think of how much easier it will be to show them both vs. having to drive across town.  This is all assuming the area it is in is a good one and convenient for you but I'd say go for it.  

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    There's nothing wrong with staying in that neighborhood as long as it's a good area. It simplifies your drive-by inspections!

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    2Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    Using equity from your existing investment property is going to decrease your cash flow by virtue of the additional interest payments you will be making.  Run the numbers to make sure it does not take you underwater.  

    1Reply
  • Frank Hinck
    Rental Property Investor · Minneapolis, MN · Member since 2020 · 540 posts · 285 votes
    6y

    @Meredith Bailey

    Same as the other commenters- it makes it easier to manage and leveraging 1 property to buy the other is a smart way to buy if you have enough equity. Having 2 or even 5 close together isn’t a bad idea unless the whole town is propped up on 1 industry and a plant closure could knock out the whole local economy.

    1Reply
  • Meredith Bailey
    OP
    Roswell, GA · Member since 2016 · 2 posts · 1 vote
    6y

    Thanks for the feedback everyone! Turns out I wasn’t the only investor interested as it went under contract within one day, before I even had a chance to contact my realtor and lender. Looks like I’ll be paying close attention to the neighborhood I hopes that another one will be listed soon.

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