Just How Important is Location???? - Posted by SteveA (FL)

Posted by Ben in Ohio on March 03, 2000 at 16:29:56:

My 2 cents. There is a saying in the used car business–“There’s an ass for every seat.” Maybe this will help!

Just How Important is Location??? - Posted by SteveA (FL)

Posted by SteveA (FL) on March 02, 2000 at 15:49:54:

Some investors tell me very important, but all of the courses show ad’s that read “Any Shape, Any Location.” I know of a few houses in my community that could be good prospects, but I’d want to carry a gun with me when I went there. (City Population is 19,000) Our local law enforcement just teamed up with the Feds and made 43 drug arrests of suspected dealers in the area and they are pushing the residents to take the neighborhoods back. Could be a great opportunity for me but I’m still concerned.

Is it critical, or is there really a buyer for every house?

Thanks in advance.

Re: Just How Important is Location??? - Posted by Carmen_FL

Posted by Carmen_FL on March 03, 2000 at 16:32:40:

Location is extremely important!

You must know what you want to do before you even consider certain areas. For instance, purchasing a house in a “war zone” is excellent only if you plan to rent it out - and expect to rent out to Section 8 tenants and have a major cleanup job each time they leave. The monthly cashflows, however, can be great. As mentioned earlier, though, you won’t get much appreciation, or much money up front.

You will most likely NOT sell a house in a war zone to a regular owner-occupant. You CAN make money if you buy it WAY low and sell to another investor who wants to rent it out. If someone goes through all the trouble of qualifying for a mortgage, etc. - they will certainly look for something in a safer area. Your holding time will probably be much longer, too - houses in bad areas will not attract many people from ads, MLS, etc. You’re catering to a special audience who already lives in or near this or a similar area.

That said, if the terms are right, you WILL be able to find a buyer in any area … that is, owner financed, 6% interest, no credit check, 0% down loans would go in a jiffy no matter what the area - but the problem will still be collecting afterward!

Re: Just How Important is Location??? - Posted by Paul Ness

Posted by Paul Ness on March 02, 2000 at 19:35:06:

I have found in my market, generally speaking, that rental property in poorer locations provide greater potential cash flow and lesser potential for appreciation, while property in more favorable locations may not have as good of a cash flow but have better potential for appreciation. It depends on what you want.

There probably is a buyer for almost every property (except one next to a leaking nuclear power plant). Those ads should read “Any Shape Any Location BUT MY TERMS!!!”.

Paul Ness
(from within spitting distance from Three Mile Island)