I am new in terms of posting to the website, but I have been listening to the podcast for a while and I've been doing my education and research. My wife and I are both medical professionals and we make a decent income but we would really like to get into real estate investing within the next couple years, primarily buy and hold multi family properties. We live in eastern Massachusetts and the pricing for multifamily homes or single-family homes are pretty high in comparison to the rental income except in some of the more urban and higher crime areas.
My question is I'd like to get some opinions on whether it's a good idea or not to invest in rental properties that on Trulia for example are in the yellow for crime. I'm also not quite sure if the property values in the higher crime areas will rise at the same level as the surrounding towns.
In these areas the numbers do you work and some are around the 2% rule, just estimating...
Looking forward to hearing your thoughts !
Erik, there are certain pros and cons of investing in higher crime neighborhoods. For buy and hold I personally have never considered it. Mainly because of the higher turnover, higher vacancy, more hands-on property managing experience you typically hear about. For that kind of investment I just wouldn't risk it. Unless of course there's a big redevelopment initiative in place and you can get ahead of the redevelopment.
Now those neighborhoods can be good for flipping because there tend to be more value add opportunities. I'm working on a few such examples. But we're very focused on the specific neighborhood and solid comps.
Hope there are a few nuggets in there. Good luck!
@Erik Pfundstein Well, hello neighbor! The crime maps are one of the more useful things on Trulia. The home values not so much.
There are some places where you can still get deals on the south shore - Plymouth is one of them.
Not 2% deals, but 1%+. As you probably know, north Plymouth - near Forest Ave is a tough area. In fact I hear that if you're looking for almost any kind of drugs, that's the place to go!
Downtown Plymouth has some good areas as does West Plymouth. Further south is good for seasonal rentals (and I have on at White Horse Beach on the market now!)
Other towns to look at include Marshfield (but watch those crime maps - there are hot spots), Pembroke, Kingston, Halifax, Middleboro, WEST Brockton (roughly defined as zip code 02301). Further south and west, Taunton, Fall River and New Bedford - again, watch the crime maps.
Let me know what your parameters are and I'll see what I can do to help.
Thank you all for the info! This forum thing isnt all that bad!
You probably won't see much appreciation. If investing in these towns try to invest on the outskirts of town
When we were starting out a few years ago, I bought two houses next door to one another from a landlord looking to get out of the business. They're in a C+ part of OKC, and were leased to decent Section 8 tenants. Then the one across the street became available and I bought it. Now we own 6 houses on that street, plus a vacant lot next to one of them that could be used for new construction or to move a house onto. They all rent @ 2%+ what I paid for them and we've got them all in great shape.
Now looking to offer for sale as a package deal and move on to the next challenge. But just speaking for myself, it's been a great learning experience, and a crash course in effective property management!
I agree with driving the neighborhood at different times. I'd ask a local property manager if I hired your company to manage my properties which neighborhood should I purchase my investment properties in.
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