First time investment conundrum

[Justin Knox]

I'm close to purchasing my first investment property. I'm torn between three enticing listings. Listing A is in a Grade C-D neighborhood priced at 124k with rental comps around 1250-1350. The neighborhood is close to many new developments because of the proximity to the downtown city area. Listing B is a suburban townhome listed for 195k with rental comps around 1400-1500. Grade B area with consistent rental tenants. Listing C is also a suburban townhome listed for 129k with rental comps around 1200-1350. The offer for this can be lowered. Listing B has the highest property tax, followed by C and then A. Need some advice on determining the most important factor in comparing listings that are all promising. Thanks for your time.

[Bryce Jamison]

It's very hard to give you a fully thought out accurate answer without knowing more specifics about each of these options so here are some broad thoughts on your situation. Based on your post it seems like your considering cash flow, but you may be not be accurately factoring in the increased risk, headache, & effort as you go down the neighborhood grading scale. I'm still very small scale in my REI journey, but I would never want a C or lower property just because of the extra wear and tear and hands on management it will require. Yes, you may get a few extra hundred a month in profit, but maintenance, evictions, and damage can eat that up plus you won't get nearly the long term appreciation as B and A neighborhoods.

Also, just because you have these 3 options right now doesn't mean you have to go with one them. You can look at options D-Z too and pick the best one. If you don't like the options you have try and find new ones.