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Updated over 10 years ago, 06/12/2014
Cashflow vs Location
So I am looking at purchasing my first rental and although the numbers look great compared to everything else I've been seeing, I'm a little concerned about the location. My wife and I have been looking for a rental since January and have made offers, been through inspections and backed out ultimately due to our market just being too pricey. We started looking into other markets and found properties about 45 min away that will meet the 50% rule.
I went and looked at multiplexes last week and this was the only one that really appeals to me numbers wise.
It's a four-plex with 3 of the units being 2/1's and one unit is an efficiency with a kitchen, living room and bathroom. The first 3 units have been rented to the same tenants for 5ish years at $300/mo and they pay all utilities. The efficiency isn't currently rented but could be for $150ish/mo.
My purchase price would be $30,000 with 20% down at 3.25% on a 30 year amortization.
My main concern is the neighborhood. The city itself has a very low crime rate, but this may be one of the rougher neighborhoods. I am assuming this of course as the police department wouldn't give me any info. I did meet the tenants and the current owner when I viewed the property and they all seemed like nice people. Maybe I am just being too cautious. Any thoughts?