VERY low income rentals

[Kyle Richter]

I've gotten some really good advice here and am looking for some more....I've tried the middle class rentals, and all though there is no problem finding tenants in my area, 50% rule is out. but the rent covers the cost of the properties plus a little for myself and I have the equity to look forward to....there's just not much cash flow. On the other hand I see a lot of low value properties in an area close to mine for sale....and compairing the houses listed for rent to the houses listed for sale...there seems to be some good possiblities for cash flow there...Slum Lord I guess would sum it up the best....Is there something I'm missing about doing this...I'm seeing houses selling for $50k and houses rented on the same street for $900 a month.

[Michael Rossi]

In most places, the middle class do not rent - they own. Therefore, trying to rent middle class properties will not result in positive cash flow - quite the contrary.

If you want to be in (make money in) the rental property business, then you've got to own the properties that tenants rent - in other words, lower-middle class (blue collar) and lower class rentals. That's the rental business.

Don't confuse operating lower class rentals with being a slumlord. I have a substantial portfolio of low income rentals (as well as lower-middle class rentals) and I am certainly not a slumlord. All of my properties are safe and clean and we don't tolerate ANY illegal activity on our property. Two of our locations (5 buildings) are even covered by elaborate surveillance camera systems. Not even close to being slums.

Mike