These are followed by tips for making the right investment if you do decide to buy in a less desirable area.
7 Points to Consider Before Investing in Challenging Neighborhoods 1.
If your goal is fix and flip, you might be able to invest in a riskier neighborhood, provided you can get in and out quickly and you and your contractors are comfortable spending time in the neighborhood.
If you buy in a challenging neighborhood, you will likely have Section 8 in your tenant pool.
That said, the items that need fixing are usually items that we would end up fixing anyway, so it is debatable as to whether these expenses are really “extra.” Tip: Do not let a Section 8 tenant move into a property before it passes inspection.
If you can buy a property in a challenging neighborhood free and clear but would need to borrow to buy in a Class A or B neighborhood, the deal may make good sense if it meets your other requirements.
If you are building a long-term rental portfolio or focusing on a high volume of fix and flips, consider that you can buy more properties in challenging neighborhoods than if you focus on more desirable neighborhoods.
6 Tips for Those Investing in Challenging Neighborhoods 1.
Especially if you are buying in a higher crime area, make sure your improvements include security features.
Have you had a good or bad experience investing in a challenging neighborhood?