Posted by Rob FL on January 19, 1999 at 18:42:37:
Here are some of my guidelines for neighborhoods for rental properties:
Low crime area
average to above-average schools
neighborhood is getting better not getting worse
more owners-occupied than rental houses
Here are some guidelines for houses:
concrete block not wood frame
immediate surrounding houses must be in good condition
Priced below what new homes are selling for (your competition)
Just some ideas anyway.
The Right Property - Posted by Darin Auvil
Posted by Darin Auvil on January 19, 1999 at 18:16:24:
In many of the Q&A’s posted, there are several references to the “right property”. What is the right property? Im from Tacoma WA. and just getting started in REI. I need to focus on that “right property”, but without the elusive description… I don’t know where to really start…or what to look for.
I don’t want to mess around looking at properties I shouldn’t be looking at. Time is money…
Carleton Sheets refers to “Bread and Butter Properties”, but he never really goes into a description of what a property may look like, or maybe the age or condition …or whatever. Odviously a dump is just that and a costly thing to renovate, thus cutting into your return (maybe)…To expensive on the other hand does not allow for flexibility as far as say, meeting a 1% minimum rental return with postitive cash flow (depends). I may be answering my own question by stabbing somewhere in the middle between dump and Castle, but is there something more definative.
Re: The Right Property - Posted by Tim Conde
Posted by Tim Conde on January 22, 1999 at 24:53:08:
The “right” property for me is one that makes money, and looks like it will continue to do so in the future. True, I look for local employers, local shopping, walk-to schools, etc. but the bottom-line is my ability to rent the property, and have it make money.
If you perform a detailed analysis of the costs of ownership, the potential rents, along with a subjective analysis of the area, I think you will be able to determine the “right” properties for you.
True, Carlton Sheets talks glowingly about bread and butter properties (vaguely defined as a 3BD/2BA house), but I don’t necessarily follow that. You would do better to determine what there is a need for in your market, and address that need. Example: I build duplexes in an area with a large cultural bias toward a large family consisting of several generations. My answer to that was to design and build 4 bedroom duplexes. I have a five year waiting list for units. In other areas, I couldn’t give a 4 bedroom unit away and I know it.
Tim