Investing in Low Income Areas

[Greg Gasiorowski]

Hello everyone,

I'm new to the forum and have been doing a lot of research in buying rental properties.

I currently live in the Philadelphia, but would like to invest in lower income areas such as Chester, Marcus Hook, or Trainer (PA). I'm very familiar with these areas since I grew up near them, but wanted an expert's opinion when it came to buying rental properties in low incomes neighborhoods.

I've heard mixed things about investing in low income neighborhoods such as the quality of tenants, the actual profit gained from renting in these areas can be low/minimal, and crime associated with these environments.

However, I see these areas as an opportunity to at least start my real estate venture. 1.) Housing in these areas is extremely cheap so I could easily afford the homes for sale within the area. 2.) The quality of tenants can determined by properly screening potential tenants. 3.) I could establish security measures for these homes such as alarm systems and upgraded windows and doors to minimize burglary and offer tenants more peace of mind.

First, I would like feedback as to what can be expected in investing in low income areas and if it is truly worth the expense.

Secondly, I would like to know how you obtained your property (I'm referring to your first property - ie how you started). I know there are many avenues in order to buy the property and, again, this is a topic where I'm hearing mixed things. I've heard some people say you could got a traditional mortgage to start off, but I've also heard that people are shying away from this method (traditional mortgages are dead?). I've also heard people taking out lines of credit from their own homes to fund their rental property, but I'm not sure if that's a smart move.

Any advice that you could provide would be greatly appreciated....

Thanks!

Greg