Buying Rental Properties in Poor Locations
Posted by Shawn Simpson // March 4, 2020
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They say that the
number one rule in real estate is Location, Location, Location. That said, what
if you see value in buying rental properties in poor locations. Are there
factors about poor locations that should consider before buying?
Buying Rental Properties in Poor Locations
Resale:
;Eventually, every property you own is subject to possible resale.
That is why you need to at least consider the resale value whenever you buy a
property. You don’t need to be in real estate to know that people want to live
in good locations. They will generally pay a premium for a nicer neighborhood
and subsequently not pay as much for a weak market. When it is time to sell,
you may be looking at a limited buyer pool.Tenants:
Rentals in
poor locations generally come with poor tenants. Any landlord who has ever
dealt with a bad tenant before knows just how much of a challenge this can be.
Your life will be filled with continually chasing rent, responding to phone
calls and texts, and resolving disputes. Bad tenants will slowly reduce the
useful life of the property and become a constant bother. It is because of this
that many investors shy away from these properties because they don’t want the
burden of poor tenants. Rent Increases:
;Remember
when you are buying real estate, the value of an object is created by supply
and demand. With properties in weak markets, you may not be as able to increase
the rent when you want to even if the market is on the upswing. Poor markets
are not a desirable place to live, and you are at the mercy of your demand. Evictions:
;Dealing with an eviction is one of the worst things a
landlord could go through. Tenants with limited income have little margin for
error in the event of an unexpected financial expense. If the sudden increase
is significant enough, it may impact your rent. All the while you are trying to
get the eviction dealt with, you need to find a new tenant, which takes time
and money and is difficult with a tenant in place. The chances of an eviction
increase the worse the market.
If
you see value in buying rental properties in poor locations, these are some of the potential issues you
may face. I don’t want to generalize and say you’ll find them in every
property, but the potential is there.
Styl
Properties, Inc. is
here to help homeowners out of any distressed situation.
As
investors, we are in business to make a modest profit on any deal. However, we
can help homeowners out of just about any situation, no matter what!
There are no fees, upfront costs, commissions, or anything else.
We offer the simple truth about your home and how we can help you sell it
fast.
Give
us a ring. We would love to help you understand the process and to answer all
of your questions. You can reach us at 402 999.0577.